Trading Scam Red Flags: Fake Apps and 'Guaranteed' Returns

It often starts with a friendly message from a stranger, an ad promising financial freedom, or a text that seems to have reached the wrong number. Weeks later, you’re watching your balance grow in a sleek trading app — until you try to take your money out. Then come the “taxes,” “fees” and “penalties.”

Fake trading platforms are one of the most expensive scams aimed at older adults. This guide explains how they work and the red flags that give them away.

The scale of the problem

Investment fraud was the costliest crime reported by people 60 and older in the FBI’s 2025 Internet Crime Report: about $3.5 billion in losses from 16,926 complaints. Cryptocurrency investment fraud alone accounted for about $2.76 billion reported by people 60 and older.

Social media is a major starting point. The FTC found that investment scams caused $1.1 billion in losses that started on social media in 2025 — more than half of all money people reported losing to social media scams.

How a fake trading scam unfolds

The FBI and the FTC describe a pattern that repeats with small changes:

1. The approach. A stranger reaches out by social media, an unexpected text or a “wrong number” message. The FTC’s review of 2024 text scams describes “wrong number” texts that grow into a friendship, often with romantic undertones, before the scammer claims to be a successful investor.
2. The app. After building trust, the scammer guides you to download a trading app or open an account on a website, and to send money — often by wire to accounts you believe are investment deposits.
3. The fake profits. The FBI says victims see fictitious returns that encourage them to invest more.
4. The trap. When you try to withdraw, you’re told to pay taxes, fees or penalties first. The SEC calls this a form of advance-fee fraud. Each payment leads to another demand.

EXAMPLE — SCAM

Today 8:05 PM●●● ▮

G Grace (new contact) Text message

Congratulations, your account is now up 38% this month! You’re a natural.

To unlock withdrawals, the platform requires a one-time capital gains tax of $6,800 to be paid first. Once it clears, you can withdraw the full $64,000. Please don’t mention the platform to your bank — they don’t understand crypto and may freeze your funds.

A new twist: couriers collecting cash

In June 2026 the FBI warned that some crypto investment scammers now send couriers to collect cash at victims’ homes or in public places. When banks block suspicious transfers, scammers tell victims they must hand over cash in person to keep investing or to pay “fines” to withdraw. The FBI says the victims are usually senior citizens, and after each pickup, the fake balance on the app goes up — until the next demand.

The FBI’s advice: don’t share your home address with, or agree to meet, unknown people to deliver cash or other valuables for investments.

Trading scam red flags

The SEC’s Investor.gov lists these red flags of investment fraud:

• Unlicensed investment professionals.
• Aggressive sellers who may give exaggerated or false credentials.
• Offers that sound too good to be true.
• “Risk-free” opportunities and promises of great wealth or guaranteed returns.
• “Everyone is buying it” pitches.
• Pressure to invest right now.
• Sensational pitches that may have fake testimonials.
• Unsolicited pitches that try to get your personal information.
• Being asked to pay by credit card, gift card, or wiring money abroad or to a personal account.

For crypto trading websites specifically, the SEC and CFTC warn about promises of high guaranteed returns — for example, 20% to 50% — with little or no risk, complicated jargon, and requests for “additional costs” such as taxes before you can withdraw your “profits.” They note that fraudsters may use fake names and misleading photos, and U.S. phone numbers even when they operate abroad.

Watch out for “investment training”

Not every trading scam involves a fake app. In August 2026 the FTC warned about social media ads for investment or trading “training” that show luxury cars and trips. The FTC’s message: no one can guarantee you’ll make lots of money with little to no risk, and no one can guarantee to teach you how to trade successfully.

How to check an investment before you pay

1. Check the person and the firm. Investor.gov — the SEC’s website for individual investors — lets you check an investment professional’s background and registration. You can also contact your state securities regulator.
2. Check the CFTC’s RED List of foreign firms that appear to need, but don’t have, CFTC registration.
3. Search beyond the name. The FBI suggests searching the platform’s web address, details from its pages, and screenshots of the “app,” and looking for articles, forums or reviews that call it a scam. The FTC adds: look past the first results, which may be paid ads.
4. Take your time and get a second opinion from someone you trust who has your best interests in mind.

If you already invested

• Stop sending money — including any “tax” or “fee” to withdraw. It will not unlock your funds.
• Contact your bank or the payment service you used, right away.
• Report it to the SEC (sec.gov/tcr) or CFTC, to the FBI at IC3.gov, and to the FTC at ReportFraud.ftc.gov. Include the app or website name, web addresses, wallet addresses, phone numbers and messages.
• Beware of recovery scams. People who have lost money are often contacted by “recovery” services that charge fees. See our first-hour checklist.

Related guides: crypto ATM scams, romance scams and Facebook scams.