Online platforms and social media are being flooded with a rising number of fraudulent investment and trading schemes, warned Belgium's Financial Services and Markets Authority (FSMA).
The social platform, WhatsApp, is a hotspot for a scam involving false investment tips, the FSMA noted in a statement. The scheme starts with fake advertisements on platforms like Facebook and Instagram, which invite people to WhatsApp groups to receive "exclusive" tips for investments.
While accessing these groups is free, they are used to swindle people out of their money and get them to invest in worthless shares. The scam can also allow the fraudsters to collect personal data, which can be used in further scams or to commit identity fraud.
The fake ads used to lure people into the scheme are often shared via social media profiles that pose as well-known celebrities, financial institutions or news outlets.
"In some cases, you are asked to fill in a form first, with information about your investment experience, financial situation or areas of interest," the FSMA adds.
Dating apps, texts, & pyramid scams
Similarly, the fake trading platforms lure investors online with the promise of high earnings in a short period of time. The methods used to find their targets are extensive; while social media is often used, victims are also lured through fake ads associated with celebrities, dating apps, text messages or calls with an "expert."
Once a victim is registered with the platform, they are often convinced to make an initial investment of around €250 to "test" the platform. At this point, swindlers behind the scheme will sometimes offer to "help" the victims by taking over their digital devices remotely to make transfers on their behalf. This allows viruses and spyware to be downloaded to the device.
A person typing on a computer. Credit: Belga/Stephan Engler
The fake platforms manipulate the transactions to give a false perception that the victim has made significant profits. The victims are then pressured to invest more money via phone calls, time-limited offers, or even threats.
In some cases, victims can withdraw small amounts of money; however, this is done by the fraudsters to further manipulate them to continue investing.
Additionally, the FSMA says the scam often follows a pyramid scheme structure. "The investors are encouraged to recruit new participants. Their investment allows to pay returns to the first investors. When it becomes impossible to recruit new participants the pyramid collapses."
Credit: Belga
Eventually, the platforms in the scheme cease to exist, and with them all the money of the "investors." The financial authority noted that the websites Flash Deal Academy (flashdealacademy.com) and NeuroTradeX (neuro-tradex.com, neurotradexplatform.com) often lead consumers to fraudulent trading platforms.
What should victims do?
The FSMA recommends that victims of any of these types of scams stop making any transactions and break off all contact with the scammers. They should also contact their banks immediately to inform them of any payments made to the fraudulent services.
In addition, victims should report the fraud to the relevant social media platforms, contact the FSMA and file a report with the police. Victims are recommended to gather all evidence of their exchanges of data with the platform, including account statements, screenshots of transactions, messages, or emails.
Notably, victims should be aware of 'recovery rooms', whereby fraudsters contact victims of previous scams to offer help to recover their lost money, for a fee.
A detailed list of companies and entities that have previously been associated with fraudulent activity can be found on the FSMA website.
