Investment Fraud: Why Do We Fall for Promises of High Returns?

How does investment fraud work, and why do intelligent people fall for it? Warning signs, the shame of losing your money and the ways to recover afterwards.

It all begins with an advert that pops up on social media: the face of a well-known businessman, the headline "Don't let inflation eat your savings" and a short sign-up form. The next day a polite "portfolio adviser" calls, opens an account just for you and shows you on screen how your money grows day by day. In the first weeks, being able to withdraw a small amount reinforces your trust. Then comes a bigger investment, a cash advance on your credit card, perhaps your spouse's savings. When you want to withdraw your money, however, you face endless demands for "tax" and "commission". Investment fraud shakes people deeply, not only financially but also in their trust in themselves and their own judgement. In this article we look at how this trap is set, why intelligent and careful people can fall for it, and the ways to recover afterwards.

How Does Investment Fraud Work?

Fake investment fraud is a scheme that looks like a real investment platform or advisory service but has no real investment behind it. Although the tools used vary, the process usually moves through similar steps:

• First contact: Social media adverts, images of celebrities used without permission, groups on messaging apps sharing "profit signals", or friendships that begin with a message that seems to have been sent by mistake.
• Building trust: An "adviser" who shows personal interest, a professional-looking website, live charts and constant positive feedback.
• A show of small profits: The first investment is shown on screen to be in profit, and a small amount is allowed to be withdrawn.
• Escalation: Encouragement to invest larger sums "before the opportunity is gone", and, if necessary, the suggestion to take out a loan.
• Lock-in: When the person tries to withdraw money, charges appear, the account is placed "under review", and eventually contact is cut off.

A form that has become common in recent years is the trap in which an emotional relationship and investment are intertwined. A conversation that begins on a dating app, or with a message that seems to have been sent to the wrong number, turns into weeks of warm, intimate chats. The other person seems successful, attentive and trustworthy; one day they mention their own investment success and say, "Let me teach you too." In this case the person has invested not only their money but their feelings, and when they realise the truth they grieve two separate losses at once.

The most effective aspect of this scheme is that the profit shown to the person is nothing more than an image on a screen. The person, however, perceives that figure as a real asset and becomes ready to invest more money to protect it.

Why Do We Fall for Promises of High Returns?

Among those who fall for fake investment fraud are teachers, engineers, doctors and retired bankers. This is because the trap targets not intelligence but universal tendencies of the human mind.

Watching money melt away

In periods of high inflation, seeing savings in the bank lose value creates serious anxiety. The thought "If I don't do something, my money will melt away" steers people towards options that promise faster results than traditional routes. Fraudsters know this anxiety very well and build their adverts with exactly these phrases.

The feeling that others are making money

Group members on messaging apps posting screenshots of their profits every day triggers the feeling "Everyone is making money and I'm the only one left behind." Yet a large share of these members are the fraudsters themselves or automated accounts. Social proof is one of the most powerful tools of human persuasion.

An appearance of expertise and authority

Faced with someone who introduces themselves as a "senior analyst", speaks in technical terms and explains charts for hours, a person unfamiliar with the field hesitates to ask questions. That hesitation stops doubts from being voiced.

The relationship itself

The adviser often talks not only about investing but also about the person's family, work and worries. Within weeks a kind of closeness forms. At this point, becoming suspicious means being suspicious not just of an investment but of a person, and that is much harder.

The "if I can withdraw my money, it must be real" trap

The success of the first small withdrawal is perceived as passing the most important test in the person's mind. Every investment that follows rests on that first experience. When the money gets locked, another mental trap kicks in: the sunk cost. With the thought "I've put in so much; if I stop now I'll lose it all", the person agrees to pay the "tax" or the "commission". Each payment is made in the hope of rescuing the previous one.

In investment fraud, the first thing lost is not money but the courage to voice doubt; the money usually goes after that.

Let's say a civil servant in his thirties wants to protect the money he has saved for his wedding from inflation. He clicks on an advert, talks for weeks with the adviser who calls him, and manages to withdraw a small profit from his first investment. This success convinces him; he invests all his savings and a cash advance from his credit card. He sees a large figure on the screen, but when he wants to withdraw it, first a "transaction fee" and then a "tax" is demanded. After every payment a new obstacle appears. On the day he can no longer reach the adviser, he is carrying not only the loss of his money but also a secret he does not know how to tell his fiancée and his family.

Warning Signs of Investment Fraud

Even one of the signs below is reason enough to be careful:

• A promise of risk-free, fixed returns far above the market,
• Phrases that rush you, such as "If you join today" or "Last places available",
• Celebrities or well-known institutions used in adverts without permission,
• Being asked to send money to a personal account, a crypto wallet or an account abroad,
• Being asked to install remote-access software on your computer or phone,
• Being encouraged to take out a loan or invest all your savings,
• Being asked to pay in advance in order to withdraw money,
• Being advised not to talk to your family about the investment, to "tell no one".

In Turkey, capital market activities require authorisation, and the website of the Capital Markets Board (SPK) announces authorised institutions as well as sites that have had access blocked. Checking these lists before investing money and consulting someone close to you whom you trust is a simple but effective protection.

After Losing Your Money: Shame, Family and Recovery

The heaviest feeling after investment fraud is usually shame. The person has not only lost money; they have also seen that a decision they made trusting their own mind turned out to be wrong. What is more, they have often acted without their family's knowledge or despite their family's objections. This adds guilt and relational tension to the shame.

Practical steps first

The first things to do are to call your bank and report the transactions, keep all correspondence and receipts, and file a complaint with the Chief Public Prosecutor's Office or the police. During this period, also be careful about people posing as lawyers or firms who say "We'll get your money back"; people who have been defrauded can be targeted a second time.

Telling your family

This conversation can be very difficult. If the loss affects the family's shared savings or future plans, your spouse's anger and hurt will be understandable. Having the conversation without going on the defensive, explaining clearly what happened and accepting your responsibility is the first step in repairing the relationship. Accepting responsibility does not mean tearing yourself apart; it means saying, "I made this decision, I was deceived, and now I want to talk about what I'll do to recover."

Facing the debt

If loans and card debts are involved, gathering the debts into a single list, discussing restructuring options with the banks and, if needed, getting support from a financial adviser makes the anxiety manageable. For more on the psychological burden of debt, you can read our article on debt stress.

Late-night thoughts

In the weeks after the loss, many people wake at night and recalculate the figures, replaying the conversations with the adviser in their mind over and over. Rather than trying to suppress these thoughts, keeping a piece of paper by the bed, writing down whatever comes to mind and telling yourself "I'll think about this tomorrow in daylight" can reduce the mind's spinning in the same loop all night.

Being fair to yourself

The thought "I can't be this stupid" comes often. Yet the scheme that targeted you was designed by professional teams precisely to persuade people who think the way you do. For a more detailed framework on the shame that being defrauded generally creates, our article I was scammed and I feel ashamed may also help.

What Can You Do If Someone Close to You Still Believes?

Sometimes the problem is that someone close to you keeps putting money into a fake investment and will not listen to your warnings. In this situation, saying directly "You're being scammed" often backfires; the person goes on the defensive and grows even closer to their adviser.

Instead, asking curious questions can be more effective: "Have you been able to look at this company's licence?", "Have you tried withdrawing all of the money?", "Do you know the adviser's real name and the company's address?" These questions make room for the person to notice their own doubts. Trying once to withdraw all the money often makes the truth visible.

During this process, protecting your own financial security is also your right. If there are joint accounts, talking to the bank, requiring two people's approval for spending from shared savings or keeping your own share in a separate account are steps that limit the damage without breaking the relationship. Explaining this not as a punishment but as an effort to protect the family's future reduces the chance that your loved one will become defensive.

It is important to approach your loved one's anger and denial with patience and not to leave them alone. The moment they accept the truth will be a very fragile one, and having someone beside them at that moment who supports rather than blames makes recovery easier.

When Should You Seek Professional Support?

It is natural to feel sadness, anger and anxiety after a large financial loss. However, getting support is helpful in the following situations:

• If not even an hour goes by without you thinking about what happened, and this has been going on for weeks,
• If your sleep, appetite or performance at work has been seriously disrupted,
• If trust and communication within the family have reached breaking point,
• If you are turning to new risky investments or gambling to make up for the loss,
• If you are experiencing intense hopelessness, worthlessness or thoughts such as "My family would be better off without me".

Large losses can lead some people to thoughts of ending their life. If you have such thoughts, do not stay alone; share them with someone close to you and, in an emergency, call 112 (emergency services) straight away. For marked depressive symptoms, an assessment by a psychiatrist is also important.

How Is Recovery After Investment Fraud Addressed in Therapy?

The first step in therapy is for the shame to become something that can be talked about. In a cognitive behavioural therapy approach, thoughts that emerge after the event, such as "I can't do anything right" or "I've ruined my family's future", are addressed and re-evaluated within the circumstances of the event. When the person's worries and needs at the time and the persuasion methods the fraudsters used are examined together, the logic behind the decision becomes more understandable.

Grieving the loss is also an important part of therapy: the money lost, the plans postponed, the trust shaken. For tension and trust problems within the family, sessions involving the spouse can be arranged when needed. If the urge to win back the loss is pushing the person towards gambling or new risky transactions, working with that urge also becomes a priority.

Over time, the focus of therapy shifts towards the person being able to trust their financial decisions again. Some people freeze after the event at even the smallest expense, while others take new risks in a rush to make up the loss quickly. At either extreme, the aim is to reach a balanced attitude in which decisions can be made without haste, based on information and with advice when needed.

This process can be carried out face to face or online as part of individual therapy.

Frequently Asked Questions

Can money lost in investment fraud be recovered?

This depends on the circumstances of the case and the legal process; it may not be possible in every case. Acting quickly, contacting your bank and the competent authorities and keeping records are important. You should, however, be careful about people who promise to recover the money in return for a fee.

The profit was visible on the screen, so how can it be fake?

On fake platforms, the balance shown on screen does not represent a real asset but a figure the fraudsters can change as they wish. The first small withdrawals are also payments deliberately allowed in order to win trust.

My spouse put our savings into a fake investment. How should I treat them?

It is entirely natural for you to feel angry and hurt. While expressing your feelings, keeping in mind that your spouse was also deceived and is probably feeling deep shame prevents the conversation from turning into a fight. Making financial decisions together for a while and, if needed, getting support as a couple helps repair trust.

I'm afraid of ever investing again. Is that normal?

Yes, being cautious after an experience like this is understandable. Over time, you can make financial decisions again through authorised institutions, without sudden decisions and by consulting people you trust. If the fear is significantly restricting your life, it helps to talk about it with a professional.

• #investment
• #fraud
• #shame
• #debt
• #family

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Eda Erkan Alapala

Klinik Psikolog. İstanbul Kent Üniversitesi Klinik Psikoloji Tezli Yüksek Lisans mezunu; bilişsel davranışçı terapi, çocuk merkezli oyun terapisi ve çocuk-ergen psikoterapisi alanlarında eğitimlerini tamamlamıştır.

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