Investment scams and romance scams

What are investment scams and romance scams?

In an investment scamInvestment scamA scam that promises big, safe returns on an investment, often in crypto, while the scammers simply take the money paid in., scammers exploit people's trust to lure them into investing in shares or crypto on false pretences, as the Icelandic police describe it. The money is never invested. It goes straight to the scammers.

In a romance scamRomance scamA scam where someone builds an online romance, often over months, to get the victim to send money or crypto., someone builds a romantic or friendly relationship with you in order to steal money or personal information. Unlike most online fraud, the scammer is willing to spend a long time winning your trust before asking for anything.

The police point out that investment scams are sometimes part of romance scams. Once the trust is there, the "partner" or "friend" offers investment advice or claims to know about a money-making opportunity. In English this combination is sometimes called "pig butchering". According to 112.is, Iceland's emergency services website, anyone can fall victim to a romance scam, but most victims are men in their fifties and sixties.

How do these scams unfold?

1. First contact

It often starts on social media or a dating app such as Facebook or Tinder. Sometimes it is a message that seems to have reached the wrong number, or an ad featuring a celebrity that leads to a sign-up form. After you sign up, an "adviser" calls.

2. Building trust

Over the next few weeks you chat every day. The conversations are warm, you are shown a lot of interest, and you seem to have a great deal in common. In a romance scam, declarations of love come fast, and soon you are asked to move the conversation off the platform to text, email or a messaging app. There are always plans to meet, but something always gets in the way.

In an investment scam, the "adviser" is patient and friendly, uses professional language and sends documents that look official.

3. The opportunity

One day, almost in passing, the person mentions making good money from crypto. They offer to teach you and suggest starting small. Often they walk you through buying crypto at a real crypto exchangeCrypto exchangeA company or platform where you buy, sell and swap crypto, for example with krónur. and then sending it to a wallet addressWallet addressA string of letters and numbers you give out to receive crypto, much like a bank account number. on the "investment site". Sometimes they ask you to install a remote access program such as AnyDesk so they can "help".

4. The fake profits

On the website or app, your balance grows, sometimes by tens of percent in a few weeks. You may even be allowed to withdraw a small amount, so you trust the system. Then you are encouraged to put in more, perhaps by taking out a loan or selling something. But the figures on the screen are just numbers the scammers control.

5. The fees

When you try to withdraw the large amount, something always stands in the way. First there is a tax to pay, then a commission, then a fee for an "anti-money laundering check" or an account upgrade. Each payment leads to a new demand. In the end the site disappears and the contact stops.

6. The aftermath

Shortly afterwards, someone often gets in touch offering to recover the money for a fee. The police specifically warn about this: online services that offer to recover money are a known scam.

Why do smart people fall for it?

These scams are not about intelligence or education. They work for other reasons:

• Professionalism. The scammers are well organised, and according to the police, the websites people are sent to look very credible.
• Slow-built trust. By the time money comes up, you feel you know the person well.
• Small steps. The first amount is small, and each step seems reasonable compared with the last.
• The fake profits. A growing balance looks like proof that everything is fine.
• Sunk costs. "I just need to pay this one fee and I'll get everything back."
• Isolation. You are told not to tell anyone, because your family "wouldn't understand".
• Emotions. According to 112.is, scammers target people who are lonely, isolated or longing for new contact.
• Photos prove nothing. Anyone can use photos of someone else, and with AI it is possible to create pictures of people who don't exist.

Shame is the scammers' final weapon. It keeps people from talking about what happened, which buys the scammers more time.

The warning signs

• Someone you have never met talks about money, investments or crypto.
• Promises of large, safe profits.
• You are told to keep the relationship or the investment secret.
• A request for remote access to your computer or online bank.
• Payments must go to different bank accounts. The police say this means it is certainly a scam.
• You have to pay a fee to withdraw.
• The investment site can't be found on any register of licensed providers. See How to check if a crypto provider is licensed.

How can you help a relative or friend?

It is painful to watch someone you care about get caught in a scam. A calm, non-judgemental conversation achieves the most.

• Ask rather than tell. "How did you meet?" "Have you tried withdrawing everything?" "What happens if you refuse to pay the fee?" Questions let the person see the inconsistencies for themselves.
• Expect resistance. Many people defend the scammer, who has built a strong bond. Anger is a natural reaction. Stay in touch, because isolation is the scammer's tool.
• Check the facts together. Look the investment site up on the Central Bank of Iceland's register. Search for the person's name and photos online, as 112.is suggests, to see whether the pictures are used elsewhere.
• Show official warnings. It can be easier to hear it from the police than from family. The police page on investment scams on Ísland.is↗ describes these scams well.
• Help with the next steps. Go to the bank together and report it to the police.
• Warn about recovery scams. People who have lost money often get "offers" to help them get it back.
• Remind them there is nothing to be ashamed of. Professional support is also available: the police's romance scam page points to Bjarkarhlíð, a support centre in Reykjavík.

What to do if money has been sent

1. Stop paying. No payment will bring the money back.
2. Contact your bank straight away. Bank staff know these cases. A payment to a foreign account can take a few days, so speed matters. Crypto payments, on the other hand, are almost impossible to get back, because transactionsTransactionA record of crypto moving from one wallet address to another, signed with the sender's private key and stored permanently on the blockchain. on a BlockchainBlockchainA public ledger where transactions are grouped into blocks, each linked to the one before, so past records can't be altered without it showing. can't be reversed.
3. Report it to the police. Use the police reporting portal on Ísland.is↗ or go to any police station. In the report, you can give the police permission to look into the case with your bank.
4. Stop replying, but keep the conversation. The police advise that it is best to simply stop replying, rather than block the scammer straight away, so you can hand the full conversation to the police. Take screenshots of chats, profiles and transactions.
5. Contact the police if you are threatened. Some scammers try extortion, for example by threatening to share pictures.
6. Tell the crypto exchange if you bought the crypto there before sending it on.

Where to report

• The police: Report a cybercrime on Ísland.is↗. There is one form for fraud and another for attempted fraud. In an emergency, call 112.
• Your bank: immediately, if you have paid anything.
• The social network or dating app: report the profile so it can't reach more people.
• The crypto exchange: if crypto was bought and sent on.

Closing thoughts

Investment scams and romance scams rest on trust that the scammer earns over a long time. They are well organised, and they often catch sensible, honest people.

The best protection is to talk about it. If someone you have never met starts talking about money, pause and discuss it with the people around you. If money has already gone, contact your bank and the police straight away.