How To Help a Relative Recognise Investment and Crypto Scams
Practical guidance for helping a family member identify and avoid fake investment platforms, crypto fraud, and high-return scam schemes.
Last reviewed: 1 June 2026
Investment and crypto scams are some of the most financially devastating scams families face. They often involve months of relationship-building before any money is requested, making them hard to recognise from inside. Helping a relative understand the consistent patterns — without dismissing their interest in investing — is one of the most protective conversations you can have.
How investment scams are structured
Most investment and crypto scams follow a recognisable arc, and understanding the shape of it makes each stage easier to spot as it happens rather than only in hindsight. Contact typically begins through social media, a dating app, or an unsolicited message, followed by relationship-building where the scammer appears knowledgeable, successful, and generous with their time. Early on, a small initial investment is often shown to 'succeed,' sometimes with a real small withdrawal allowed, which builds confidence and encourages larger amounts. As the sums grow, withdrawal becomes difficult or requires paying additional 'fees' or 'taxes' first, and the scammer becomes harder to reach the moment real doubt or a serious withdrawal request appears.
- An unsolicited approach via social media, messaging app, or dating site
- An impressive-looking platform or app showing strong 'returns' on a small first investment
- Encouragement to invest more, sometimes over many weeks
- Withdrawal requests are delayed, taxed, or blocked — and new fees are required to release funds
Red flags to share with your relative
Share warning signs as a connected story rather than a checklist, since a narrative is far easier to remember under pressure. For example: 'someone gets contacted out of the blue about an amazing opportunity, they're shown impressive but unverifiable returns, they're encouraged to invest quickly before missing out, and when they finally try to withdraw a large sum, something always gets in the way.' Point out that a platform which happily accepts deposits but suddenly requires a fee to release a withdrawal is one of the clearest signs of fraud there is. Teaching the pattern this way means a relative can recognise it partway through, not just after reading a warning list in advance.
- Guaranteed returns: no legitimate investment can guarantee profit
- Unsolicited approach: a genuine investment firm does not cold-contact by DM or WhatsApp
- Pressure to invest quickly before a 'window closes'
- Difficulty withdrawing — any platform that delays or blocks withdrawals is not legitimate
- Not registered with the FCA, SEC, or relevant regulator
How to raise it without causing offence
Someone already involved in a scam has usually invested real belief, hope, and often money, so a blunt 'this is a scam' can trigger defensiveness rather than reflection, especially if it feels like judgement on their intelligence. Frame the conversation around the method rather than their decision-making — 'this is a known pattern professional criminals use, and it's caught extremely switched-on people, it's not about you being naive' — and ask questions rather than issuing verdicts: 'have you ever managed to withdraw money, or only put it in?' Bring independent evidence, such as an official fraud-warning list or a regulator's alert about a similar platform, so the concern doesn't rest solely on your opinion against theirs.
- Use a news story or example as a starting point rather than questioning their specific contact
- Ask questions: 'How did you first hear about this?' and 'Have you been able to withdraw any profits yet?'
- Offer to help them check the company on the FCA or SEC register together
- If already involved, move slowly — rushing may cause them to dig in deeper
Conversation script
“I've been reading about investment scams that start on social media and end up costing people thousands — some of them look really professional. Have you ever come across anything like that?”
“Would you be up for checking together whether this platform is registered with the FCA? It takes two minutes and would be good to know either way.”
“I'm not saying it's definitely wrong — I just want to make sure we've checked the obvious things first.”
Frequently asked questions
What is a pig-butchering scam?
Pig butchering (sha zhu pan) is an investment scam where the scammer first builds a trusting relationship — often romantic — over weeks or months, then introduces an investment opportunity on a fake platform. Victims are 'fattened up' with apparent early returns before the platform disappears with their full investment.
How do I check if an investment company is regulated?
In the UK, check the FCA register at register.fca.org.uk. In the US, check FINRA BrokerCheck at brokercheck.finra.org or the SEC EDGAR database. If the company does not appear, or appears with warnings, treat it as high risk.