What You Need To Know About Pump and Dump Scams

Paul White

We’re here to talk about what pump and dump scams are, the signs of pump and dump scams, as well as what you should do if you think you’ve been a victim of one.

What Is A Pump and Dump Scam?

Pump and dump scams are a form of fraud that involve a group of scammers artificially inflating the value of a stock, getting people to invest, then pulling their investment so they make money and leave the other investors with a near worthless share.

These are becoming increasingly common across many different investment platforms, from crypto scams to investment scams, with many people losing a lot of money. Pump and dump scams can last as little as a week, although sometimes if they want to get more out of the investment, it might be longer, and they keep you informed to ensure you remain in the investment.

Pump and dump scams are illegal, usually targeting small investments. Usually people found guilty will be faced (tends to be groups of scammers working together) with heavy fines at a minimum through this fraud, with further consequences depending on the size of the scam.

Signs Of Pump and Dump Scams

An Element Of Feeling Rushed

Often with pump and dump scams, fraudsters will frame them as being “too good to miss” and a “short time offer for people who invest quickly”. This is to ensure that the investor doesn’t have too much time to think about the investment or research it.

Questionable White Papers

If the white papers available don’t look legitimate or don’t have much information in terms of scalability or general data, then take this as a red flag. Do your research before any investment.

People Reaching Out To You

Pump and dump scammers often reach out to people with their unmissable investment opportunities, whether it’s on Reddit, social media, dating sites or anything in between! Whenever someone gets in touch with opportunities to maximise your profits and provide big returns that seem too good to be true, they likely will be.

What To Do If You Think You’re A Victim Of A Pump and Dump Scam

  1. Contact your bank – the very first thing you should do is contact your bank to see if they can stop the payment. If the payment has already gone through, you should still call your bank as soon as possible, explain what has happened and follow their advice.
  2. Report the fraud – next, you should contact Action Fraud to report what has happened to prevent it from happening again.
  3. Contact investment fraud lawyers – there are now specialist investment fraud lawyers like WRS who are dedicated to tracing and recovering funds lost through a whole host of different scams, so they may be able to help you get your money back. The sooner you get in touch the higher the chance that they will be able to help, so make this a priority after you’ve contacted your bank.
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