Sometimes, it really does help to be sceptical of things that seem too good to be true? Chances are that most likely it is, especially when it comes to the use of social media apps, such as Instagram, where everything is a distorted version of reality.
In this case, young Instagram users have fallen victim to an investment scheme that popped up on the platform recently. Each of them have lost an average of £8,900 as part of the scam. These Instagram scams been big news in America for the past couple of years, but now they’re hitting the United Kingdom in a big way.
Action Fraud is the the UK’s national reporting centre for fraud, where various complaints signalled that there had been a growth in activity in recent months from fraudsters posting about what’s known as the classic “get-rich-quick” scheme.
Victims of this scam are promised high returns within 24 hours of the alleged investment, but fraudsters only demand the fees before disappearing. A total of 356 reports of losses has been recorded since October.
Those who were scammed lost a collective total of more than £3 million – yet more is expected to have been stolen as there’s a chance some victims did not even report their losses.
The scam itself involves schemes advertised via the photo-sharing app, where potential victims are encouraged to transfer £600, with the promise of almost immediate profits. Once the payment is made, they are then sent images supposedly showing their profits building up in their accounts.
The scammers then tell their victims to “invest” more, and that the money can be released for a fee, hence how the losses build up to thousands of pounds.
However, once the fee is paid, the scammers close the Instagram account, stop all contact and leave with the money, ultimately leaving their victim with nothing but a hole in their bank account.
Investment fraudsters trick their victims by using professional-looking images and sometimes promising free research reports, special discounts and “secret” stock tips.
Security company ZeroFox, that specialise in social media, previously said that it found more than two million public Instagram posts that boost these types of scams, known as “money-flipping.”
As well as these types of scams floating around, social media is also used as a hunting ground for fraudsters looking to “recruit” supposed “money mules” to help launder stolen money. Those targeted are promised they can earn money by receiving payments to their account before transferring them elsewhere, but can usually keep a set percentage of the money received. The money in question has already been stolen from an unsuspecting member of the public.
Those who become money mules could face prosecution for illegal activity, or experience not being able to open a bank account in the future due to their participation in money laundering.
Inspector Paul Carroll from Action Fraud stated: “Opportunistic fraudsters are taking advantage of unsuspecting victims who are going about their day-to-day lives on social media.”
He also urged social media users to never send money to strangers which they have encountered online, to check financial matters with family members first and to only deal with financial firms authorised by the regulator – the Financial Conduct Authority, and to report any cases of fraud to Action Fraud UK.
A spokesman for Instagram also released a statement on the issue: “Fake and fraudulent activity is not allowed on Instagram. We proactively fight against this type of content and are always improving our systems to quickly detect and remove anything that violates our Community Guidelines.”
So, if you ever find yourself contacted by these fake “get-rich-quick” schemes on Instagram or find them as sponsored posts in your feeds, simply stay away or better yet if you know it’s a scam, then report the account for fraudulent activity to Instagram or Action Fraud UK.
Story by Emily Clark
Featured Photo Credit: NBCNews