The UK’s National Cyber Security Centre (NCSC) revealed that it has taken down malicious links to celebrity endorsement investment scams. Victims have lost millions to such scams partially thanks to the hype surrounding cryptocurrencies.
NCSC Shuts Down More than 300,000 Links
The NCSC stated last Friday that it had taken down more than 300,000 links to investment scams in the past four months. Celebrity endorsement investment scams usually rely on fake online news articles containing bogus investment opportunities purportedly endorsed by local celebrities.
In the UK, celebrities such as Sir Richard Branson and Ed Sheeran have been used for these scams. Whereas in Australia, Mel Gibson and Chris Hemsworth have been exploited to dispense the fake investment advice.
The fake news articles have headlines like Mel Gibson’s Latest Investment has Experts in Awe And Big Banks Terrified or Sir Richard Branson Brings Financial Freedom for ALL – Here’s How He’s Doing It. The articles appear to be genuine news stories from trusted and reputable news providers such as the ABC or BBC. They feature real photographs but fictional testimonials from celebrities on how they have made millions by buying and selling cryptocurrency. Furthermore, these articles contain links through which the reader can sign up to the online trading platform supposedly used by the celebrity. Through the link, the reader can follow the celebrity’s fake advice and make an investment.
How Celebrity Endorsement Scams Work
Needless to say, the online trading platform does not exist. In fact, the links on the fake news stories send readers’ investments to cybercriminals. What makes this ruse attractive is that individuals can start investing with as little as £250. The cybercriminals promise huge returns on investment, which makes some potential investors suspicious. Thus, they start with a small investment to see what happens.
To encourage victims to invest more, the cybercriminals initially pay out money to victims. “You think, if it seems too good to be true it probably is – until they pay you,” said Nick Yeoman, an Australian victim. “It’s very hard not to believe when it’s money in your pocket,” he said.
Thus, victims invest more. However, once a significant amount is invested, the payments stop and the money in the account disappears. Furthermore, the victim’s contact also disappears and eventually they get a message stating it had all been a scam.
The UK’s Financial Conduct Authority (FCA) has warned the public that cybercriminals are taking advantage of the hype surrounding cryptocurrencies. And that they are using celebrity endorsement investment scams to do this. Such scams cost victims more than £197 million in 2018, with each victim losing an average of £29,000. Furthermore, reports of investment scams increased by 45% during the coronavirus lockdown, with 1,600 cases reported to the FCA in June alone.
“These figures provide a stark warning that people need to be wary of fake investments on online platforms. Celebrity endorsements are just one way criminals can promote bogus schemes online,” said Commander Clinton Blackburn of the City of London Police.
The FCA warns investors to be cautious when investing in cryptocurrency, owing to the lack of regulation in the industry. Currently, there is no compensation or protection available to consumers when things go wrong. Consequently, the legitimate cryptocurrency industry is calling for regulation to provide consumers greater protection and increased confidence.
What is Being Done
Ciaran Martin, chief executive of the NCSC, said last Friday: “We are exposing them today not only to raise public awareness but to show the criminals behind them that we know what they’re up to and are taking action to stop it.”
The NCSC is also working with celebrities whose identities have been exploited to take down celebrity endorsement investment scams. Sir Richard Branson, founder of the Virgin Group, said: “We have dealt with hundreds of instances of fake sites and fraudsters impersonating me or my team online. We are working in partnership with organisations such as NCSC to report these sites and do all we can to get them taken down as quickly as possible.”
“Sadly, the scams are not going to disappear overnight, and I would urge everyone to be vigilant and always check for official website addresses and verified social media accounts,” he added.
Don’t be a Victim
Always keep in mind that if something sounds too good to be true, then it probably is. Mark White, chief executive of scam avoidance service Reassura, says: “Scams like this are all the more shocking because of how well they are put together. Gone are the old days of sloppy fraudster spelling and grammar as well as slightly-off logos.
“The new scam sites look very authentic with sophisticated little touches such as the date updating and lots of social media comments. But however sophisticated the scam, they rarely beat the ‘if it’s too good to be true, then it’s a scam test’ which we all need to remember to avoid getting carried away and losing our money.”
If in the UK, always check a financial company’s credentials on the FCA website before investing. In Australia, individuals can check whether the investment opportunity is a scam on the Australian Competition & Consumer Commission’s (ACCC) Scamwatch website.
Victims of Celebrity Endorsement Scams
Anyone falling victim to investment scams should immediately get in contact with their financial institution and notify the local authorities.
UK victims should also report the scam through the NCSC’s Suspicious Email Reporting Service, which has already received over 1.8 million reports since its inception in April this year. In addition, UK victims can report the scam to Action Fraud online or by calling 0300 123 2040.
In Australia, scams can be reported on the Scamwatch website or by contacting the ACCC.