Not all celebrity endorsements for crypto-currency and money trading schemes are legal, warns City Watchdog!

Beware! Not all celebrity endorsements are right! Increasingly celebrities are promoting cryptocurrency and certain currency trading schemes which turn out to be scams. People get lured due to it but end up losing their hard-earned money. City Watchdog has warned people to be on the watch out and alert to prevent getting cheated.

Celebrities and the traps

The celebrities that the scamsters choose are those who have a strong fan following. This is taken to their advantage. The scamsters seize this opportunity and the popularity of the celebrities to set a wide net of potential victims.

Source: Pinterest (Celebrity financial endorsements)

A number of such bogus online trading platforms have emerged which promise high returns. But once the investor puts in the money, the fraudsters do a vanishing act. The frauding companies never return the invested funds to the person and leave them in the lurch and in tears. In 2018-2019, this loss to the victims was to the tune of £27m, the Crime reporting center Action Fraud said.

The modus operandi of the scamsters

The Financial Conduct Authority (FCA) which is the City’s Watchdog has warned people to be careful. They state that the companies asking for investment and promising high returns utilize celebrity endorsements and pictures of expensive and luxurious items such as watches and cars on social media posts to attract investors. The fraudsters then link these to professional-looking websites where they invite potential investors to invest.

Source: The Sun (Simon Aidoo tube worker defrauded)

But soon after the innocent investor transfers some funds, there may be no sign of returns and the company might disappear. The clients then realize that the firm has duped them.

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The warnings from the regulating agencies

The authorities who regulate all these activities have informed people to be careful in these dealings. Not all companies on the Internet are genuine. The fraudsters can make use of well-established brand names or celebrity names to look authentic.
Laura Suter, who is from the regulated investment platform AJ Bell says:

“If your friend recommends something to you, don’t assume that they have done all the research for you. You can check on the regulator’s register to see if the company is legitimate.”

Source: Pinterest (Action Fraud logo)

The frauds related to foreign currency or crypto-currency has tripled last year. Last year, the regulating authority reported 1834 cases of fraud. The average calculated loss per person has been around £14,600.

Pauline Smith, the director of Action Fraud has said:

“These figures are startling and provide a stark warning that people need to be wary of fake investments on online trading platforms. It is vital that people carry out the necessary checks to ensure that an investment they are considering is legitimate.”

Click to know more about Joan Lile, 82 sues Vicki Gunvalson and her insurance company for selling her an insurance policy by fraud!

Source: BBC UK