Affinity Federal Credit Union

By: AffinityFCU

The internet and social media have greatly expanded access to information, connectedness…and the possibility of getting scammed.

With so much going on as you scroll through your social media feeds and direct messages, it’s easy to misconstrue ploys to get your money as legitimate opportunities to make money yourself, help a worthy cause or just have a good time. The recent “Fyre Festival” fiasco,¹ in which a social media scammer got 5,000 people to pay thousands of dollars for an experience in the Bahamas involving celebrity performances and luxury accommodations, only for them to show up to limited number of tents, shows how even wealthy, supposedly savvy people can fall victim to flashy online fraud tactics.

But just because the Fyre Festival and other more elaborate scams are aimed at the rich doesn’t mean you don’t have to worry about such schemes yourself. The truth is, fraudsters work ‘round the clock to get their hands on your money, whether you’re a billionaire or simply someone trying to make ends meet. There are five tips you should know to avoid becoming the victim of a social media or internet scam.

Be suspicious of people with pictures of cash and lavishness. Many social media platforms, particularly Instagram, are known for promoting lavish “lifestyles,” typically filled with boats, mansions and piles of cash. If you enjoy following such people to see a glimpse of the high life do so. But you should start to be suspicious if these fortunate people you’re friends with or follow on social media start talking to you about business ventures or asking for money. Why, after all, would people already so fabulously wealthy need anything from you? Often, displays of cash and assorted luxury items are designed to project an image rather than a reality – sometimes benign, but occasionally aimed at stealing your money and making your own life poorer.
Ignore requests for money – they’re probably internet scams. Related to the above tip is the general advice, regardless of whether the people asking portray themselves as rich or poor, to not respond to anyone who specifically asks you for money via social media (or email or any other online platform, for that matter). These scams can come as “investment opportunities” (about which the British government specifically warned earlier this year²) that ask you to send a little money now to reap big rewards later on. Another popular scam is when you’re informed you’ve won a sweepstakes contest that you never entered, and that you need to pay to claim your prize. Having to send money to make money is usually a scam. Don’t fall for it!
Famous people probably aren’t contacting you: One inventive way for scammers to get your attention is to impersonate a celebrity. Billionaire entrepreneur Richard Branson warned recently³ on his blog not to trust…Richard Branson. Well, at least not if he shows up in your inbox on Facebook or Instagram proposing you help him with a “get-rich-quick” scheme, because it probably isn’t really him. Scammers impersonate other celebrities like Mark Zuckerberg (which is especially popular on Zuckerberg’s platform Facebook) asking for money, often saying you’ve won a contest or sweepstakes. Here’s a good rule to follow: famous people probably aren’t reaching out to you directly, and if they’re asking for any money at all (personally, rather than through appeals on their official pages), a scam is likely in the works.
Beware of “pump and dump” scams. We’ve covered the less subtle scam centered on making money as an investor, but what about when you’re solicited about buying stock in an actual company? “Pump-and-dump” scams – when brokers hype up the potential of a (usually cheaply priced) listed firm to inflate the value of stock before selling their outsized shares – predate social media and the internet itself. But in an era when people spend a good part of their time on social platforms, unscrupulous brokers have a new outlet for furthering these schemes. If someone – even a licensed broker or financial advisor – contacts you through social media about buying stock, it’s a good idea to be suspicious. Leave advice about investing to advisors who you know are working for you.
Keep personal details to a minimum. People love to post on social media about their kids, pets and other aspects of their personal lives. But this is also a great opportunity for scammers to glean valuable information. According to a recent report⁴ by Santander Bank, millennials in particular put themselves at risk by “oversharing,” with such information as pet names or dates of birth, sometimes equipping fraudsters with what they need to hack into bank accounts or apply for financial products like loans in their name. These scams are more dangerous than the others because they involve identity theft rather than directly convincing you to hand over money, so make sure you’re extra vigilant!

Social media is a great way to both stay in touch with friends and meet new people. But it could be damaging financially to be over-trusting. Keep these tips in mind and hopefully you’ll never be on the receiving end of a social media scam.

This information is for informational purposes only and is intended to provide general guidance and does not constitute legal, tax, or financial advice. Each person’s circumstances are different and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and/or legal counsel to discuss your specific needs before making any financial or other commitments regarding the matters related to your condition are made.

¹ Retrieved from https://www.cnbc.com/2019/08/18/how-fyre-festivals-organizer-scammed-investors-out-of-26-million.html

² Retrieved from https://www.actionfraud.police.uk/news/instasham-fraudulent-investments-being-advertised-on-social-media

³ Retrieved from https://www.cnbc.com/2019/07/09/richard-branson-scammers-are-pretending-to-be-me-to-steal-your-money.html

⁴Retrieved from https://www.cnbc.com/2019/07/22/millennials-at-risk-of-fraud-over-instagram-pet-pictures-santander.html