Californians were warned Monday about the prevalence of investment scams across social media, including on Facebook, Instagram, WhatsApp and other online platforms.
Scammers are increasingly using deceptive ads and phony images to lure people into high-stakes scams in order to defraud them of their savings, authorities said. Last year, California Attorney General Rob Bonta sent a letter to Meta — owner of Facebook, Instagram, WhatsApp, Messenger and other platforms — urging the company to adopt protocols to properly tackle the problem or otherwise ban all investment ads on its platforms.
Bonta encourages anyone who may have been a victim of these types of scams to report it to oag.ca.gov/report.
“Californians, we’ve seen an uptick in investment scams across Facebook, Instagram, and WhatsApp,” Bonta said in a statement. “These scams have cost some people their life savings and typically use photos of well-known or trusted people without their permission in order to create the necessary trust to get into consumers’ pockets.
“I encourage Californians to learn about common scams and review tips to protect themselves, and I urge investors to scrutinize social media investment ads before investing,” he said.
Investment scams include “pump-and-dump schemes,” in which victims are lured into online investment groups and convinced to invest in low-priced stocks or deal in volatile cryptocurrencies; and confidence scams, where fraudsters develop trusting relationships with their victims and convince them to “invest” using fake investment platforms that drain the victims’ money.
Bonta said Californians should be very cautious before responding to any social media investment ads and making related investments. Reputable broker-dealers and investment advisors typically do not advertise their investment strategies on social media.