Social media became a new digital platform where people were lured into many scams, and most of the scams included investment frauds or social media investment scams. As most social media frauds lure people and make them invest in something worthless, con artists have a proper target audience, and for investment scams, they target an older age group.
In the past two decades, social media has evolved and revolutionized the way people connect. Social media helps people connect with loved ones, learn about new things, learn new languages, or get new jobs. It has opened a new door of opportunities, but it also has many disadvantages, as it has allowed many scammers to take advantage of the technology and find new ways to loot people.
Scammers have increased their activity on social media to dupe people by impersonating any company or personality. Nowadays, social media is all about influencers, and people are defrauded in the name of famous influencers. Social media helps scammers reach a wider audience. And people are falling victim for variety of scams and losing their funds.
As it is not easy to eradicate scammers completely from social media and immediately stop them, social media platforms are enhancing their security and screening processes to decrease the number of scams on social media. But awareness of social media investment scams can help people avoid and report such scams.
Social media investment scams
Social media investment scams occurred due to heavy advertising and people getting engaged in these scams and following the con artists’ instructions. The scammers have a greater advantage because it is quite difficult to track any scammer on social media because they can open multiple accounts, impersonate some celebrities, or create a fake profile and publish their campaign until someone reports it.
Social media is the easiest, cheapest, and quickest way to reach a larger audience at once. That’s the reason for the increase in the rate of social media investment scams. Social media is vast and has multiple platforms, with Facebook leading the scamming market as people in the older age group tend to use Facebook more. We often hear about Facebook investment scams, and people who are retired or have savings for their future are looted.
Many people think they are smart and can’t be defrauded or scammed, but it’s all a myth. Scammers get in contact with their victims easily and build a strong connection. Let’s understand how social media investors are scammed.
How are social media investors scammed?
In social media investment scams, the con artist entices people by promising them high and quick returns by investing in their project or where they advise. They make people fall for their trap by using multiple tactics. If the investor gets alerted about the scam, they try to use high-pressure sales tactics so investors don’t have much time to think.
With such tactics, the con artist makes the investor make hasty investment decisions. After the investment is made, the scammer becomes unresponsive and disappears. Attract investors with fake posts, testimonials, or endorsements. To get more attention, they make fake profiles of famous influencers or celebrities.
What are social media investment frauds examples?
The list of social media frauds is endless, as scammers come up with new scams every now and then. You may have heard of many investment scams on social media that have much in common with the scams happening in the real world.
Pyramid schemes and Ponzi schemes are some of the most common scams practiced on social media. People lose millions of dollars in such scams. With high marketing and increasing their reach in a short period of time, people not familiar with social media are vulnerable to such scam attacks as they easily believe such schemes.
There are many other scams going on on social media, and many people are not aware of such scams as con artists target older adults as they have more savings. Let’s see more of these common investment scams.
Types of social media investment scams
Apart from the common social media investment scams, most of us are aware of scams that are spreading like wildfire on social media but are not in the limelight. Let’s take a look at some of the different types of social media investment scams.
Stock market manipulations
Stock market manipulations were practiced before digitization was implemented in the world, and the 1990s were famous for share market scammers. After the digital world was introduced, con artists had the advantage of reaching a larger audience with minimal effort.
Con artists spread rumors and fake news on social media with paid promotion or by making fake accounts. You can also see paid posts in the form of memes, spreading news all over the platform so more people can invest in particular stocks. They try to manipulate stocks both negatively and positively.
Along with scalping and touting, which are two other scams perpetrated by con artists, pump and dump is one of the oldest and most widespread stock trading scams ever.
After stock market fraudsters, we have scammers who practice affinity fraud to target people who follow specific groups, like religious groups or ethnic communities. As these scams happen in groups, maybe not many outsiders are aware of them. In affinity fraud, a fraudster pretends to be a member of a group and convinces the leader of the group about the scheme.
They try to involve every individual in the group in the scheme or get the funds from the group. As everything is happening inside the group, the relationships are exploited, and until everyone becomes aware of the scam, the fraudsters flee with the funds.
Romance scams are one of the most reported scams, after investment scams. In romance scams, con artists generally target people of old age, widows, or people who are alone. They show love and affection and pretend to be falling for them. Con artists try to build a relationship and gain their trust to get all the personal information.
As scammers dupe people on social media, they try to avoid meeting physically or attending any video calls, as they dupe people of both genders. By gaining their trust, scammers try to ask for some money as they are stuck in an emergency situation or try to convince the victim to invest. As the fraudster makes some good money, they become unresponsive and disappear from all the social media platforms.
Crypto investment scams are quite famous on social media. The crypto industry is only a decade old, and because of its decentralized nature, it is quite vulnerable to scams. As scammers try to promote their platform so people can make more money, there will be little to no risk.
Schemes like this are direct indications of fraud; there is no such way in the crypto industry where people can invest and get higher returns with little to no risk. To promote their schemes, scammers heavily market on social media, making people fancy their chances for once.
Impersonation scams are one of the biggest ongoing scams on social media. Scammers impersonate a firm or some individual who is popular on the social media platform and try to promote their schemes or ask for money.
Scammers generally pretend to be a brokerage firm, direct investors to a phony website, and make them invest in their scheme. To safeguard yourself from such schemes, always verify the details or avoid getting involved in them.
How to avoid scams on social media
To avoid scams on social media, you have to be vigilant and always avoid honey trap scams. These little things can help you stay away from all the scams. Mentioned below are the steps to avoid social media scams.
- Avoid unsolicited messages.
- Never share your personal details with anyone.
- Always use strong passwords.
- Look out for phishing scams.
- Use a strong password.
- Verify the source.
- Always update the software.
Frequently asked questions
Are there any government agencies or organizations that specialize in investigating cases of defrauding investors?
Yes, law enforcement and fund recovery agencies help users investigate their cases and recover their funds.
You should immediately report the crime to the local police or law enforcement; they will help you investigate your case and track down the criminal.
It is tough to identify fake laws that sound real, but you can check the source and verify the information, and you can consult with a legal advisor to cross-check the laws.
To conclude this article, social media is an excellent technology where people can connect with each other in no time, but fraudsters have the same advantage of exploiting the technology. Keep an eye out for such scams and try to avoid participating in them, especially on social media, where they are more likely to occur.