Fake Celebrity Endorsement Scams Cost Investors Millions Every Year

Fraudulently using the image of a celebrity to endorse a financial investment or cryptocurrency opportunity is a type of Impersonation Scam. The scammers will have done their research and know who is trending on social media and who would appear to be a credible ambassador for their scheme. The scheme might be unregulated, high-risk, or even non-existent, but by adding a trustworthy face and name to their online advertising, unsuspecting investors get drawn in and are more willing to part with their money. At best, they steal your personal information, at worst, they take your money.

This behaviour, known as social engineering, is a common theme among all types of Authorised Push Payment Fraud (APP Fraud). If you have no reason to be suspicious that an investment opportunity might be fake, you are more likely to transfer money without diligent research.

With APP Fraud, a key feature is that would-be investors are asked to transfer money to a particular bank account or cryptocurrency ‘wallet’. Most banks these days ask security questions about the purpose of that payment, who it is to and what it is for. They will ask if you have been contacted out of the blue to make the payment and if you’re comfortable to make the payment. Such questions are designed to make you stop and think and, if necessary, to abandon the payment and do more research.

Remember that, if an investment sounds too good to be true, it probably is!

Unfortunately, many people believe they are investing in a genuine opportunity and never suspect that it might be a scam. Only after they have transferred the money, been asked repeatedly for more, or even been locked out of their online investment account do they begin to suspect that all is not as it should be. By then, the scammers have usually moved funds to another bank account, often overseas, making it difficult or impossible to trace.

If you are in the awful position of discovering you have been scammed, it is important to seek help. Don’t feel ashamed or embarrassed, from helping lots of scam victims, we can assure you that you are not alone – contact your bank, the police and Action Fraud immediately. Your bank will conduct an investigation, and there may be a criminal conviction, although this takes time and might not be possible, there is also no guarantee that you will get your money back even if there is a criminal investigation.

If you feel your bank did not do enough to protect you and your money, are unhappy with their investigation, or disagree with the bank’s findings, then a complaint can be made to the Financial Ombudsman Service (FOS). FOS was established as an independent body investigating disputes between financial institutions and customers. They have the power to award refunds and compensation.

The Financial Ombudsman Service has investigated many cases of APP Fraud and bank negligence. Banks are financial experts and should know much more about scams and how to spot them than their customers. They are responsible for keeping your money safe, stopping or delaying suspicious payments, and asking more questions about the purpose of new, unusual or frequent payments. They should also keep ahead of the latest scams.

FOS has issued many decisions against banks after they failed to protect their customers from scams and lost money and many people have been reimbursed either fully or in part.

Sarah Spruce, Legal Director and Head of the Fraud and Scams team at TLW Solicitors, says:

“Money Saving Expert’s Top 20 list makes for disturbing reading. Many people on the list are loved by millions, something the scammers are tapping into when they create their online adverts. I can’t stress enough the importance of carrying out your own detailed investment research or getting help from an investment expert.

“Most published data on the amount lost to fraud and scams will likely be underestimated. People are embarrassed to admit a scammer duped them, so they won’t report their financial loss to their bank, the police or Action Fraud. Even the people we talk to daily who have reported their loss feel ashamed, but they want to get back what is rightfully theirs. We help them navigate the claims process.”