We’ve written before about the increase in investment scams that are being reported to the authorities during lockdown, especially those that have their roots in Social media. Taking one particular platform as an example, Action Fraud, the UK’s Police National Reporting Centre for fraud and online crime, have been a huge increase in cases related to Instagram, with monthly financial losses attributed to scams that originate on the popular network hitting almost £200,000 a month.
The presence of genuine influencers, people who have built a reputation for their knowledge and expertise on a specific topic, on social media has led to a significant rise in copycat individuals, who will use the same approach and tactics to give the impression that they are “in favour” of particular brands and so garner authenticity for what they are promoting, either directly or indirectly.
Influencers make regular posts about that topic on their preferred social media channels and generate large followings of enthusiastic, engaged people who are influenced by the products or services the are talking about. Consequently, brands benefit because the influencers are trendsetters and reach audiences in ways that they often can’t.
For a platform such as Instagram it is all about the image, or images. A picture can tell a thousand words and because of the amount of time the current millennials, now becoming the latest generation with disposable income, spend on Social Media, most big brands will have a strategy not only for how to build their audience online but also how to use influencers.
Sometimes the line is blurred between who is a real influencer and whether they are officially endorsing a product. That is one of the reasons behind the increase in reported fraud – savvy social media users become too trusting over time.
One particular case, reported last week by the BBC underlines the issues that the Social Media platforms face, where a 24 year old lost the best part of £17,000 having been approached by someone he followed on Instagram, offering him an investment opportunity.
“I was following this guy on Instagram and he always posts with his car, a rose gold Maserati, saying that he’s rich and self-made and really young, he’s only 21,” the victim said. The approach was to invest in a similar foreign exchange trading scheme that had made him so much money. He started off with a £1,000 investment and initially made some money before investing significantly more and slowly seeing it disappear, unable to withdraw his funds as part of the scam.
New investment schemes including those featuring digital currencies such as Bitcoin and Ethereum have become very popular because of the significant gains that can be made in a short-term. However, the risk of high losses also exists in such volatile markets. Nevertheless, the issue in this case wasn’t the unpredictability of the financial assets but the scheme it was invested in.
Despite the fact the instigator of the investment offer potentially owning such a unique car, he has disappeared and so has the victims case.
“There’s no place for fraudulent or inauthentic behaviour on Instagram. We have a safety and security team of 35,000 people working to keep our platforms safe and we block millions of inauthentic accounts every day,” a Facebook company spokesperson said.
The warning is clear from Facebook. “People are sucked in and want to believe it and want that lifestyle, especially these days, with young people struggling to get jobs. You definitely see more people looking at different and newer ways to make more money. We have a safety and security team of 35,000 people working to keep our platforms safe and we block millions of inauthentic accounts every day.”
Now more than ever it is important we keep our wits about us when we are using Social Media. It is far too easy for fraudsters to create a believable persona with pictures of glamorous lifestyles in luxurious destinations that can be used to hoodwink others. Always take any offers with a pinch of salt and do your own research, remembering if it looks too good to be true, it probably is.