Beware: Understanding today’s most common financial scams

In an increasingly digital and fast-paced world, financial scams have become more sophisticated, widespread, and damaging than ever before.

From phishing emails and fake investment opportunities to identity theft and elaborate Ponzi schemes, scammers are constantly finding new ways to exploit vulnerabilities and prey on unsuspecting victims.

And with the rise of online trading platforms, cryptocurrencies, and decentralized finance, financial scams have evolved, becoming more sophisticated, deceptive, and damaging. Whether it’s a bogus forex platform, a fake crypto investment, a romance-based scam or a cloned financial firm, the danger is real—and growing.

So if you are an individual trying to protect your savings or a business safeguarding assets, understanding the tactics behind these scams is the first step toward staying safe.

The Malta Financial Services Authority (MFSA) has seen an increase in financial scams reported. This publication is intended to give a snapshot of the most popular scams, tips on how to detect red flags and avoid getting scammed.

1. Forex Trading Scams

Foreign exchange (forex) markets are legitimate and globally traded, but that hasn’t stopped fraudsters from exploiting the sector. Many forex scams lure victims with promises of “guaranteed profits”, “secret trading algorithms”, or “no-risk investing”.

Scammers may request higher deposits and after receiving funds from the consumer, all contact with the consumer might stop.

Consumers should be aware that scammers may make unauthorised use of the details of MFSA licensed entities, in order to mislead the public.

Asking for additional fees or charges in order to withdraw profits, may be a red flag as this tactic is used by the scammer in an attempt to gain more funds from the scammed client.

Common Tactics:

Fake brokers claiming to be regulated

Pyramid schemes disguised as trading “schools” or mentorship programs

Manipulated trading platforms that show fake profits and then block withdrawals

Red Flags:

Unrealistic returns (e.g., “Make 30% a month!”)

Pressure to “act now”

Lack of transparency about licensing or regulation

2. Cryptocurrency Scams

The cryptocurrency space is rife with both innovation and fraud. The anonymity and decentralization that make crypto attractive also make it a haven for scammers.

The most common scams are unregulated/fake crypto exchange platforms and fraudulent Initial Coin Offerings (“ICO”). Fake ICOs involve the issuing and selling of a fake coin or token or crowdfunding for the issuing of such coin, which has no underlying value. Consumers are advised to research such investments and refrain from products which they do not understand or cannot guarantee its legitimacy.

Fake cryptocurrency exchanges may attract consumers with their advertised high rates of return or guaranteed gains. However, such exchanges may entice and pressure consumers to invest large sums of money or have hidden fees.

Additionally, scammers may mislead consumers with what appear to be profits made from their investment in order to pressure the consumer to pay withdrawal fees, which consumers may be fooled into paying, especially after investing a large sum of money.

Common Types:

Rug pulls: Developers hype a crypto project, raise funds, then disappear

Pump and dump: Influencers pump a coin’s price, then sell their shares, crashing the value

Phishing scams: Fake websites or emails steal private keys or seed phrases

Ponzi schemes: Promises of high returns funded by new investors, not actual profits

Red Flags:

Guaranteed returns in crypto

Poorly written whitepapers or no verifiable team behind the project

Being asked to send crypto to receive more in return

3. Clone Firms

Clone scams involve fraudsters impersonating legitimate firms—copying their names, websites, registration numbers, and even employee names to convince victims they are dealing with a genuine, regulated company.

Clone entities can come in many forms, the most common being clone websites. Such websites may clone the full content of the legitimate entity’s website or may only make use of information which may provide consumers with the illusion that they are licensed and regulated.

Consumers are advised to proceed with caution, remain alert and ask questions about the identity of the entity to ensure the safety of their funds.

Prior to investing, consult the MFSA Financial Services Register and conduct some internet searches for further information on the entity in question. By searching the name of the company followed by the word “scam” or “fake” may result in reviews or alerts regarding such entity.

How They Work:

Scammers direct people to convincing fake websites and offer investment opportunities under the guise of a real firm. Victims may even verify the name with a regulator, unaware they are dealing with a clone.

Red Flags:

Slight differences in website URLs or contact emails (e.g., .com instead of .org)

Cold calls or unsolicited messages

Being told not to contact the firm directly—“we’re the special VIP desk”

4. Romance Investment Scams

Also known as “pig butchering” scams, these involve building emotional relationships online—often through dating apps—and slowly introducing investment “opportunities.”

Typical Pattern:

A scammer forms a romantic connection with the victim

They claim to be making a fortune in forex or crypto and offer to help the victim “invest”

After initial returns, victims are pressured to invest more, then ultimately lose access to their funds

5. Advance Fee Fraud

This classic scam promises large payouts in return for a small upfront payment. Though the forms vary—lottery wins, inheritances, government contracts—the premise remains the same: pay now to unlock more money later.

Warning Signs:

You’re asked to pay fees or taxes before receiving any money

Emails full of grammatical errors and urgency

Too good to be true “opportunities” from strangers

6. Social Media Investment Scams

Social platforms like Instagram, TikTok, and WhatsApp have become fertile ground for scam artists. They often present a lavish lifestyle funded by day trading or crypto success to attract victims.

What to Watch For:

“Traders” promising daily profits for managed accounts

Influencers posting fake screenshots of withdrawals and profits

Being added to WhatsApp groups pushing “signals” or “trading bots”

How to Protect Yourself

• Verify the regulator: Always check if a company or platform is licensed by the MFSA.
• Take your time to research the entity or individual, a legitimate entity will not pressure you to invest.
• Carefully read any documentation, contracts or terms and conditions for potential red flags (spelling mistakes, inconsistencies, signs of tampering).
• Do not share personal details such as ID card number, address, bank or card details, passwords to personal accounts and other identifiable information.
• Do not invest in products you do not understand.
• Be aware of suspicious emails from service providers which include links or requests for personal information.
• Do not respond to financial offers made over telephone, social media, or mail.
• Do not invest unless you have identified the company or individual with whom you are undertaking a business transaction.

Final Thoughts

Financial scams are constantly evolving, adapting to trends and exploiting technological gaps.

Education and skepticism are your best defenses. If an opportunity sounds too good to be true—it almost certainly is.

If you suspect you’ve been targeted or defrauded, report it immediately to the MFSA. Acting fast can help prevent further losses and protect others from falling victim.