Washington, DC (STL.News) — The Commodity Futures Trading Commission (CFTC) yesterday issued, “There’s Nothing to Like about Scammers on Social Media,” a Customer Protection Advisory that warns customers to beware of and avoid unregistered brokers and advisers, as well as fake testimonials and so-called trading experts on social media platforms. Fraud offenders can create many online profiles or anonymous identities, and use them in a coordinated way to lure people into schemes.
“As the technology utilized by consumers has evolved over time, so too have the tools that scammers use to target potential victims,” said Erica Elliott Richardson, CFTC Director of the Office of External Affairs. “We have seen scammers use social media in their attempts to exploit individuals who are interested in trading foreign currencies, binary options, digital currencies, and precious metals. The CFTC encourages consumers to fully research all potential investments and stay informed about the latest scammer tactics in order to avoid these schemes.”
There are several red flags to look for to help identify fraudulent social media profiles. They typically flaunt wealth or brag about their huge “win” percentages. Photos of exotic vacations, sports cars, and mansions are common, as well as the inability to find verifiable facts about the person’s background, credentials, and experience. The profiles commonly appear to be new with few connections to family, friends, or colleagues. Bogus profiles are designed to build a façade of success. Posts may even feature screen shots of “winning trades” or huge account balances.
This advisory also provides overall social media safety tips investors should keep in mind when they are browsing social media for investment opportunities.