Action Fraud has warned that Instagram is being used by scammers to offer fraudulent investments. It has recorded over 356 reports of fraud in a five month period (Oct 2018 – February 2019). Most of the alleged investment schemes target those aged between 20 and 30.
According to the details offered by Action Fraud, these are fairly typical scams. They are get rich quick schemes designed to appeal to those looking for extra money. They offer high returns for an initial small investment which Action Fraud says is commonly around £600. Once the victim has been hooked, they are shown how quickly their money is growing and urged to invest more while the market is hot. So far, victims have lost a total of £3,168,464 an average of £8,900 per person.
According to Inspector Paul Carroll, of Action Fraud: “Opportunistic fraudsters are taking advantage of unsuspecting victims who are going about their day-to-day lives on social media.”
Fraudsters taking advantage of bank transfers
The fraudsters get the victims to transfer their money via bank accounts rather than credit cards. One reason is that the money often appears in the fraudsters account immediately due to the faster payment scheme. Another is that customers often fall for this type of fraud as they don’t have to pass payment card details to the scammer. They see it, therefore, as more trusted.
The banks have historically taken a different view. As the customer transferred the money, the banks have treated the customer as negligent. The result is that reporting the fraud and getting money back is difficult.
However, that is changing. New rules say that where customers were clearly duped, banks should refund the money. Banks are also expected to warn customers of the risks of transfers. They must also monitor for vulnerable customers and take action to protect them. Failure to warn or protect also means that banks are expected to reimburse the customer.
One of the changes that banks need to make to protect customers is speed. The longer it takes a bank to identify and react to a fraud, the more victims there are. Delays also allow fraudsters to take the monies out of the receiving account. At the moment, banks have not committed to a definitive timescale for responding to fraud reports.
What can you do to protect yourself?
According to Carroll: “It’s vital that you follow the simple steps below to make sure you don’t fall victim to this fraud.”
- Never respond to any requests to send money, or have money transferred into your account by someone you don’t know and trust. These types of requests should always raise a red flag. If something feels wrong then it is usually right to question it.
- Don’t immediately agree to any offer that involves an advance payment or having to sign a contract on the spot. Always speak with a friend or family member first.
- Always check the credentials of any financial company on the Financial Conduct Authority’s (FCA) website: – they should be on the register. Contact the preferred company directly and reject any offers made through unsolicited communications.
- Every report matters – if you have been a victim of fraud or cybercrime, report it to Action Fraud online or by calling 0300 123 2040.
Enterprise Times: What does this mean
Fraudsters will always find a way to take money off unsuspecting victims. Most scams work because they have an element of plausibility or they appeal to those who are desperate. In the case of these Instagram scams, there is no plausibility in terms of the rewards. Instead, they rely on people desperate enough to gamble on a “sure thing.” The problem is that get rich schemes are rarely anything other than a high stakes gamble or con.
Scams on social media also work because once the scammer has hooked one person, they will use that to attack their friends. People are more likely to fall for this type of get rich quick scam if someone they know has already invested.
As Jake Moore, cyber security specialist at ESET says: “Social proof is a highly regarded persuasion technique used by fraudsters whereby the more followers and traction an account can achieve, the more believable it can be. Sadly though, it usually takes someone from the outside to realise it’s a con.”
There is also a message for businesses here. Many phishing and other attacks rely on the attackers knowing something about staff. Those members of staff who have fallen for this type of attack will be embarrassed and keen to avoid employers and work colleagues finding out. Scammers often trade the details of their victims. This opens the door for an attacker to target a business through vulnerable employees. Employers should consider including scams into their cyber security training programmes.