What is Investment Fraud via Social Media?
Social media gives us plentiful opportunities to connect with others and share content worldwide with ease. Fraudsters use these same social perks to promote fraudulent investment opportunities. Social media provides them with access to personal information to target potential investors and even create the illusion of a shared common interest.
How Does Investment Fraud via Social Media Work?
Using social media, fraudsters can contact many different people at a relatively low cost – they can create fake accounts, email addresses, and link their posts to a website, videos, or photos that make the investment look legitimate.
The potential of anonymity on social media can also make it difficult to identify or find fraudsters using this medium to promote a scheme.
If a scheme catches on in social media, people who think the investment is legitimate may encourage others in their network to invest. This can result in affinity fraud where friends, family members, and colleagues invest in and then promote an unsuitable or fraudulent investment. If the investment fails or is fraudulent, money is lost, and personal relationships are affected.
Watch out for one or more of these characteristics of investment fraud via social media:
- unsolicited offers to invest
- offers of independent, unbiased recommendations
- claims of guaranteed high returns with no risk