How to Detect Fake Investment websites in 2021

Investment fraud is a multi-billion dollar industry. People are being tricked into investing in fake investment websites that promise extraordinary returns only to part ways with their hard earned monies.

The effects of the covid-19 pandemic have had a huge impact on society. This is even as the aftermath of the pandemic world over bites harder as a result of loss of loved ones and breadwinners, los of jobs, high inflation rate, etc, many people are plunged into starving, poverty, and depression.

Coupled with the harsh effects of the pandemic and other factors, a lot of persons are taking to alternatives ways of earning a living. This has plunged many who sought online investment channels into the cold hands of fake investment operators.

The U.S. Securities and Exchange Commission (SEC) states that there are a number of red flags to watch out for in other to identify fake or scam investment websites, which include the following:

1. Promises of high rates of return, typically above 20%
2. Claims of “guaranteed” returns or no loss
3. Unsolicited offers by email or social media
4. Requests to wire money or use a money transfer service to invest with the company
5. Use of capital letters in the name

Nigeria was not left out in these influx of fake investment websites despite the crackdown on the operators by the Economic and Financial Crimes Commission (EFCC).

Many of these scam schemes fronted as “Forex trading company”, cryptocurrency trading company, Agricultural Investment Company, etc.

In April 2020, The Security and Exchange Commission of Nigeria (SEC), released a circular warning stakeholders and the investing public against the activities of some unlawful/unlicensed market operators and promoters of other fraudulent schemes. In the circular, SEC listed out twelve fraudulent schemes that were afloat at that time in Nigeria.

Notable Persons Arrested For Floating Fake Investment Websites/Companies.

The Economic and Financial crimes Commission has through its clampdown on fraudulent Investment schemes arrested the following individuals;

• In November 2020, the EFCC declared Omotade-Sparks Amos Sewanu of InksNation wanted for an alleged fraud worth N32 million while floating a digital currency called “Pinkoin”. He was subsequently arrested six months later in Sokoto.
• In May 2021, the EFCC arrested Amos Olaniyan for allegedly defrauding people of over N128m through an investment scheme. He floated a fraudulent investment website, DHIL Nigeria Limited popularly known as Crime Alert Security Network Investment where he promised to pay investors 30% return on their investment.
• May 2021, the Special Fraud Unit (SFU) of the Nigerian Police in Lagos, arrested 21-year-old Brisk Capital LTD, Dominic Ngene Joshua. Joshua was alleged to have defrauded people to the tune of N2B under his fake investment company
• In June 2021,The EFCC arrested a couple Emmanuel and Victoria Jaiyeoba, who together with their son, Adewale Daniel (now at large), floated a fraudulent investment scheme Wales Kingdom Capital Limited and defrauding people of over N935m.
• In June 2021, the EFCC arrested three men -Benson Kufre John, Joseph Iraboh Eseosa, and Sunday Marcus for duping unsuspecting people of over N3.5billion through fake investment company Annexation Business Concept.

How to identify a fake investment website/company

Below are proven ways to detect fake investment websites/companies as compiled by Ichie ICT Solutions;

1. Check Accreditation by SEC
2. Check website status on scamadviser
3. Compare user count claim with website traffic on alexa tranffic rank
4. Check for reviews on TrustPilot and Public Forums
5. Check search engine indexing
6. Check if Applications are hosted on official repositories.
7. Check for brand knockoffs

Check SEC Accreditation

Every country has its capital market regulator in the Security and Exchange Commission (SEC). SEC is an independent federal government regulatory agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation.

Steps to check the SEC accreditation status varies between countries, for the sake of this article, we focus on how to check the SEC status of a company in Nigeria. For a company to engage in financial investments and other activities relating to exchange of security instruments, such company must be registered with and licensed by SEC to carry out such operation.

TO verify the status any investment company, follow the steps below;

1. Visit the official web portal of SEC Nigeria used to check the records of licensed companies; https://sec.gov.ng/cmos/
2. Type in the companies full name in the search bar.
3. If it doesn’t return any record, then the company is not accredited by SEC .

4. If it returns the record of the company you are searching, then the company is accredited by SEC.

5. Do well to go through the record, click on the plus icon (+) to expand the details. Be sure to confirm that their stated functions on the SEC portal corroborate their claims.

Never trust an Investment company because it is registered with the Corporate Affairs Commission of Nigeria (CAC). All the Nigerian investment websites/companies that latered turned out to be fraud are all registered with CAC and operates Current accounts in their business name.

Check Website Status on Scamadviser

Scamadviser.com is an online tool and review board that help users identify fake or fraudulent websites. Scamadviser uses an algorithm to determine if the website is legit with real reviews or a phishing website, selling fake products. 

Using data from Scamadviser, one could make decision as to whether a website is fraudulent or not. This is done by carefully analyzing all the data gotten from scam adviser. In as much Scamadviser helps us make decisions on various websites,  it is recommended that you through the data presented  yourself, and make your decisions.

Analysing data from Scam Adviser

The best to make use of Scamadviser  is to compare all dataset received during review and the claims presented on the investment websites.

1. Visit https://www.scamadviser.com
2. Enter the website url or domain name (link) in the search bar on scamadviser and press enter

Analyzing Result from Scamadviser

The first report segment on Scamadviser is the quick summary section and verdict.

1. Verdict: The area section and numbered 1 is the verdict area. This is the what the algorithm thinks about the website it just analysed from the result it got. From the screenshot attached, scammer adviser thinks that the website I just analyzed is suspiciou. Please take note that this is not enough to make an informed decision. Sometimes, it can label a website as safe/legit where as it is fake. This is why I stated earlier that we must analyse the result obtained from scamadviser and comparison with the claims on the website.
2. Trust Score: This is how many percent the website is rated by scamadviser out of 100. Less rated websites are potentially considered unsafe.
3. Customer Reviews: This section contains the average star rating website. it rated from 1 star to 5 stars. Less rating by customers means the website is potentially not safe.
4. Vote: This section contains the number times customers/users voted the website as either legit, scam or sales fake.

The second segment of the scamadviser report is the Report details section. This section gives more insight as to why the website was lated either low or high.

1. This sections states the reason for the rating
2. This section declares the positive highlights of the website. In this search I just made, the only stated positive highlight is the SLL secured.
3. The section declares the negatiove highlights of website. From the search I made just made, the negative highlights are;
4. The website’s owner is hiding his identity on WHOIS using a paid service: This is somewhat tricky. Sometimes, the owners of a legitimate website can use the WHOIS protection service to shield his identity against spammers.
   a. The website’s owner is hiding his identity on WHOIS using a paid service: This is somewhat tricky. Sometimes, the owners of a legitimate website can use the WHOIS protection service to shield his identity against spammers.
   
   b. This website has only been registered recently: This means that the website is  still very new. I will explain how this very highlight is important.
   
   c. This website is not optimized for search engines:  This may be due to missing robot.txt file, etc
   
   Disclaimer: The highlight varies from one website to another depending on the information being retrieved from the website. You may also received other highlights like “other low rated websites are hosted on this server”, “free email was used to register the website”, etc
   

Another interesting section to look at here is the KEY FACT section and subsequent Website Data Subsection.

The section is quite important and interesting. We would use th information provided here to make comparison with what is stated on the website.

1. This section tells us how old the website has been existing.
2. The second circle shows the first date the website (domain name) was registered, the last time it was renewed and when the current registration is expiring.

Using this information, I will compare what I’ve gotten from scam adviser and what they claimed on their website.

The website I just checked stated expressly on their website that they have been in existence for more than 3 years. However, from the data available publicly and as obtained from Scamadviser, the website is barely a month old. For in this case, we have established our first sense of suspicion. Why should they lie about how long they have been operating if they are not involved in one shady scheme or the other?

Verify User Count Claim

Many fake investment websites always inflate the numbers of active users on their website, This is done in a bid to appear real and earn trust from unsuspecting investors.

To verify these claims, another important online tool comes into play – ALEXA SITE INFO traffic tool. This is mainly used by webmasters to checking website traffic and other SEO opportunities.

The idea of using Alexa site info tool here is that, If a website claim to have over 3Million users, it expected that their average daily traffic should be more than 3 million or close around that figure.

Steps To Check A Website’s Traffic Using ALEXA

1. Visit  https://www.alexa.com/siteinfo
2. Enter the url (link) of the website you want to check their traffic in the search bar and click on “Run Analysis”

If the website has enough traffic, it would return its metric else, it won’t return anything.

In this instance, a ran the analysis for a fake investment website which claimed over 5million active users. From the result it was obvious they are lying about their user count. This cast doubt on their credibility. ( see the attached screenshots below)

As you can see from the screenshot above, this website i just checked now doesn’t have a sizable traffic and as such has been ranked by alexa. However, on their website they claimed to have over 5Million users having been operating for over 3 years. This is false!

Check for reviews on TrustPilot and Public Forums

TrustPilot is a public review and opinion board that many companies use to collect feedback and opinions from their users.  There are several other review board websites but TrustPilot is the most popular.

TrustPilot moderators monitors and removes fake reviews in other to maintain sanity on the board. However, care should be taken when using it especially for unverified companies.

How to use TrustPilot

1. Visit https://www.trustpilot.com/
2. Enter the Url (link) of the website or their name in the search bar.
3. If there the company has been reviewed on TrustPilot before, the name will appear beneath.
4. Click on it and read their reviews.

Using Public Forum

Social media platforms and public forums can also come in handy when it comes to checking the credibility of a company. Public forums are more transparent for this doing this compared to social media platforms.

There are popular social media forums like Nairaland, Warrior Forum, Beermoney Forum, etc. For the sake of this article I would use The Nairaland Forum.

How to use Nairaland Forum to check  credibility of an Investment Platform

Despite the many advantages Nairaland has over many other forums, many users especially first timers find it difficult to navigate the forum. Below are easy steps to use Nairaland Forum to check if a website is fake.

Step 1. Visit google.com or open  your preferred search engine from your browser.

Step 2. Type in the name of the website you wish to check and append nairaland to it.

E.g You want to check if Frying Pan Investment is fake or real using nairaland, simply type in “Frying pan investment nairaland” or “is frying pan investment legit nairaland.com” or “frying pan investment scam nairaland”, etc.

Step 3. Go through the results, you would surely get a thread or two detailing the activities of the platform whether fraudulent or otherwise.

NB: It is preferable to use negative words when performing this search so that you get more critical posts than promotional posts by other users hawking their referral links. E.g, use “is ABC investment scam nairaland? Instead of is ABC investment legit?”

Check if applications are hosted in their official repository.

While many do not offer apps as alternative to just investing on their websites, some offer applications for Android, iOS, and in rare cases, Desktop apps.

The official repository for iOS application is the Apple Store while that of its counterpart, Android is the Google Playstore. Downloading and installing apps from other sources other than this two is considered potentially harmful and unsafe.

Because of the constant vetting of apps before being allowed unto the various repos, and the constant re-vetting of these apps, scam operators find it difficult getting their apps on the official repos as they are constantly being yanked off the platform.

To beat this, these scam operators use third party repos usually controlled by them to system. They manipulate the reviews it gets so that people would see them as credible.

Below is an example from a website I reviewed, check the attached screenshot. These apps are hosted on third party repos controlled them, awarding themselves five star rating.

Check for brand knockoff

Many of these websites use the name of an existing brand for their dubious schemes. A website I recently reviewed used the same as a well know Health brand, portraying the illusion that they are now into crypto investment. Always watch out these practices. To identify these kinds of scams, simply google their name to see if there are other companies in the same name.

So go as far as cloning the interface of the popular brand in the bid to show of as them.

Check for Search Engine indexing.

While most of these platforms are indexed by search engines, some, especially clones, prevent search engines from getting index. 

Disclaimer: that a website is indexed doesn’t mean it is legit. But when it is not indexed, it is most of the time truly suspicious.
To check if a website is indexed, simply type into your browser search bar, site:example.com (replace example .com with the actual website’s domain name.

If it returns result, then its index, else it is not indexed.

Conclusion

Aside extreme poverty, greed is also a leading factor to people losing their monies in hands of these fraudulent investment website operators. If the returns are on high side, then it is too good to be true.