Scott Pape, an Australian financial educator famously known as the “Barefoot Investor,” has recently shared his unsettling encounter with fraudulent individuals who misappropriated his identity to orchestrate scams targeting his followers. Pape’s concerns came to light when he reported numerous fake Facebook groups impersonating him to deceive unsuspecting investors.
Rather than waiting for social media platforms to act against these fraudulent accounts, Pape opted to confront the scammers directly. He initiated contact with them through a phony identity to illustrate their modus operandi. This engagement began with a standard inquiry for investment assistance, leading him to a so-called “exclusive” WhatsApp group named the “DB Wealth Institute.”
Upon investigation, Pape discovered a collection of automated press releases promoting the DB Wealth Institute, boasting an array of impressive claims, including the training of over 30,000 students in financial strategies. However, troubling warnings from various U.S. regulators and oversight bodies hint at the prevalence of such bogus wealth institutes promising crypto trading instruction via messaging platforms.
In these scams, a supposed “professor” dispenses fraudulent trading signals, prompting group members to invest their money. After collecting a substantial sum, the scammers often disappear, leaving victims with significant losses. During his time in the WhatsApp group, Pape was inundated with activity, with over 200 messages daily discussing crypto trading successes, which he suspected were artificially generated.
As the assistant “Ally” urged him to increase his investment by suggesting a 100X long trade on an altcoin, Pape did so, realizing a temporary 81% profit. Yet, this success made him acutely aware of the trio of psychological manipulations at play in these scams: confidence, greed, and fear. Following the initial gains, the urgency shifted as Ally persistently sought larger investments, advising Pape to consider taking out loans for more serious financial commitments.
Recognizing the pattern from assisting other scam victims, Pape ultimately chose to withdraw, emphasizing that scammers exploit the feelings of desperation in those who realize they’ve been duped. The spike in crypto-related scams has been noted broadly, with a recent report indicating that $2.2 billion has already been lost to such schemes in 2024, marking a notable increase compared to previous years.
