Social media has become a breeding ground for scams, and some of the most popular platforms have been known to turn a blind eye and even allow scammers to advertise on their sites.

Identifying and removing scammer accounts is an uphill battle, exacerbated by the fact that social media platforms typically do not require identity verification or take an active stance against fraud. This is why it’s important to know what to look out for and how to avoid this type of scam.

What to look out for

Fake brokers often use promises of passive income despite the fact that the type of financial products and services they’re offering are very hands-on, or even refer you to a fake investment firm whose site looks fairly professional.

Sometimes all it takes to hook a victim in is a fake celebrity endorsement or a pretty face and friendly demeanor, but keep an eye out for brokers who post photos of flashy cars, stacks of cash, luxurious homes, and designer clothing.

Here’s one example of a real scammer’s profile who uses a link to Coinmama as well as the logo of a well-known company to seem trustworthy:

How to avoid this type of scam

Never

• Engage with unlicensed brokers who offer to manage your investment for you
• Give out personal information or photos of your IDs to someone you met on Instagram
• Give anyone else control of your money or access to your personal accounts

Always

• Understand how the investment works before paying
• Verify the information you’re given
• Check that the company you’re referred to is licensed to offer financial services in your jurisdiction (click here to see how).

Avoid

• Friend requests from individuals that you do not know
• Blindly trusting someone else’s opinion or success story with a particular firm/broker – even if you know them personally

What to do if you have been scammed

• Contact us right away
• Report the incident to your local authorities