‘Celebrity’ endorsements used to scam seniors
Criminals on social media are pretending to be television stars and other public figures to entice people into fake investments.
The good news is Australians are losing less money to scammers. The bad news is the losses are still ridiculously high, with some scammers impersonating celebrities and creating fake news stories and videos on social media.
The National Anti-Scams Centre has reported a 43% drop in financial losses linked to scams and reports to Scamwatch dropped 14% in the last three months of 2023 compared to the previous three months.
But people are still being fleeced. Australians lodged 67,116 reports with Scamwatch just in the final quarter of 2023, recording losses of $82.1 million with the average reported loss being $1,224.
Do this before investing
These simple checks with the Australian Securities and Investments Commission (ASIC) can help reduce the risk of investment scams:
Check ASIC’s Investor alert list to help keep you informed about investments that could be fraudulent, a scam, or are unlicensed.
Go to ASIC’s Check before you invest page to find out if the company or person is licensed or authorised to offer the investment.
Be sure to check ASIC’s professional register to see if the licensee is authorised to provide services to retail clients. Sometimes licensees are impersonated, so check you are dealing with the correct entity by independently verifying contact details on the Australian Financial Complaints Authoritiy’s financial firms directory. Does the website domain and contact details match those on the list?
For more information about how to spot an investment scam, visit the Moneysmart website.
Social media platforms such as X (formerly Twitter) and Facebook are becoming scammers’ new hunting ground.
Of that $82.1 million stolen funds, $15.9 million was linked to scams that started on digital platforms.
Fake stories about celebrities and other public figures are being used to endorse and link to online investment trading scams.
Some scams involve “deepfake” videos, where artificial intelligence (AI) is used to make the person onscreen look and sound like a genuine celeb.
These are used alongside pretend news articles that make false claims about online trading platforms using AI and other emerging technologies such as quantum computing to generate high returns for investors.
The Australian Competition and Consumer Commission (ACCC) reports the case of an Australian man who lost $80,000 in cryptocurrency after seeing a deepfake Elon Musk video interview on social media.
Believing the video to be genuine, he clicked a link and registered his details through an online form.
He was provided with an “account manager” and an online dashboard where he could see his investment supposedly making huge returns. But when he tried to withdraw the money, he was locked out of his account.
The most prolific online investment trading platform scam appears under the brand “Quantum AI”. Others include “Immediate Edge”, “Immediate Connect”, “Immediate X3”, and “Quantum Trade Wave”.
Scammers entice victims through social media advertisements, deepfake videos on video sharing platforms, and fake online news articles about celebrities and other well-known people claiming to have made substantial money from online trading.
This fake clickbait will link to a scam website where victims are prompted to enter their personal details.
Scammers ask for a small investment of about $250 via credit card to provide access to the trading platform.
Scammers will often ask the new investor to download a third-party trading platform via the relevant app store or provide the investor with login details for an online dashboard.
After showing “profits” through a dedicated online dashboard, scammers persuade their victims to invest more. Sometimes the scammers will allow their victims to make a small withdrawal early in the scam to build trust.
When the victim eventually tries to withdraw their funds, scammers will ask for withdrawal fees or cite tax implications to obtain more money. Some victims have reported being locked out of their account altogether.
Related reading: ACCC, Choice, Anti-Scam Centre Update
