Red Flags: Scams, Finfluencers, and Gamified Risk

Americans reported losing $15.9 billion to fraud in 2025, and investment scams were the single largest category. Almost all of them share the same handful of tells. This lesson is the immune system for everything else you've learned.

Last verified 2026-08-02

One claim that is always false

Return and risk are inseparable. An investment offering a high return is compensating you for a chance of loss, and removing the chance of loss removes the reason anyone would pay you above the risk-free rate.

So 'guaranteed high returns with no risk' isn't unlikely or aggressive — it's structurally impossible, and it's the single most reliable tell in fraud. If such a thing existed, institutions with billions in capital and borrowing costs a fraction of yours would absorb it long before the offer reached a stranger's inbox.

The rest of the tells cluster around pressure rather than economics: urgency ('closes tonight'), exclusivity ('only a few spots'), difficulty withdrawing your own money, and pressure to recruit friends. Each exists to stop you doing the one thing that reliably defeats a scam, which is taking a day to check.

The scale, and who it actually happens to

The FTC reported $15.9 billion in total fraud losses for 2025, up from $12.5 billion the year before. Investment scams were the largest single category at $7.9 billion — close to half of every reported dollar, much of it routed through cryptocurrency.

One number in there is worth pausing on: the median individual loss to an investment scam was above $10,000. That's the middle of the distribution, not the tail. Where most fraud takes a survivable amount, this category's ordinary outcome is already life-altering, and the worst cases run far past it.

Two things follow. These are reported losses only, so the real figure is higher — people are embarrassed and often don't file. And the stereotype of the elderly, credulous victim is wrong: reported losses skew heavily toward people who consider themselves financially literate, because confidence is what the pitch is designed to engage.

The design question, including about this app

Not every harmful incentive is a scam. An app can be entirely legitimate, properly regulated, and still be built to make you trade more than is good for you — because in many business models trading volume is the revenue.

Confetti on a trade, streaks, push notifications about price moves, a scrolling list of most-traded stocks: each is a nudge toward activity, and the previous lesson established that activity is what costs the most active traders 6.5 points a year.

This applies to Compound too, and it would be dishonest to teach the lesson while exempting ourselves. This app uses streaks and points. The difference worth insisting on is what they reward: finishing a lesson rather than placing a trade. Trading here never advances your streak, deliberately — the mechanics point at learning, not at volume.