The FSMA is receiving increasing numbers of reports of dubious WhatsApp groups, in which fraudsters share so-called exclusive investment tips or promote fraudulent trading apps.
How does the fraud work?
- Consumers find advertisements on social media (often Facebook or Instagram) for WhatsApp groups where, it is claimed, exclusive analyses of financial markets and profitable investment tips are shared. These advertisements are often published via pages that fraudulently use the name and logo of well-known banks and news services. These are cases of identity theft.
- Consumers who click on the advertisement are added to WhatsApp groups. These groups are managed by people who pose as prominent economists or CEOs of investment firms. These are also cases of identity theft.
- In these WhatsApp groups, consumers are encouraged to participate in lotteries. This is most likely a way to obtain consumers’ personal data. In addition, consumers are urged to purchase specific American listed shares. The aim appears to be to manipulate those share prices. This is also known as a 'pump and dump' operation. Lastly, these WhatsApp groups also promote fake applications for trading in cryptocurrencies.
Which entities are involved in this scam?
The FSMA notes that the fraudsters who manage the WhatsApp groups often pretend to be economists, people from the academic or business world, and well-known figures. For example, the FSMA has received reports of identity theft involving the following people:
- Colmant Bruno
- De Bondt Jan
- De Bondt Werner
- Guenter Thomas
- Hendelman Sean
- Lynch Peter
- Mckay Randy
- Noels Geert
- Praet Peter
- Rutsaert Nicolas
In addition, the fraudsters also claim that they work for authorized (often foreign) financial service providers, in particular:
- Bolero (KBC Bank NV)
- Loomis Sayles (Netherlands) B.V.
- SFM UK Management LLP
- Universa Investments LP
- Williams Jones Wealth Management LLC
Watch out! These are cases of identity theft. The WhatsApp groups have, in fact, no connection whatsoever with authorized institutions.
Consumers also reported that they were referred to a company called Nanolite Foundation, which uses the website nanolite-foundationnlf.com.
The managers of the WhatsApp groups also try to persuade consumers to download fake applications, such as:
- BLRKX
- GS FLUX
- LSCINV
- NLF INT
- SFM VALOR
- SXMKT
- UNIVLP
The FSMA has added these companies to the list of companies that are operating unlawfully in Belgium. Please note, the list is not exhaustive. In order to determine whether or not a company is authorized to offer financial products and services, please visit the ‘Check your provider’ page. If you have any doubts, feel free to contact the FSMA.
I’ve fallen victim. What should I do?
- If you are a member of such a WhatsApp group, the FSMA advises you to leave it as soon as possible. Also block the telephone number of the WhatsApp group administrator and break off all contact. Do not follow the investment tips and do not download any applications promoted in these WhatsApp groups. Not only are the investments made through these applications completely false, but malware may also be installed through them.
- Do not transfer any (more) money and contact your bank. Inform your bank immediately if you have transferred money.
- Report the fraud to the competent authorities. Contact the FSMA and file a complaint with the police.
- Document all exchanges of information and transactions. Gather all evidence of your exchanges of information with the platform, including emails, messages, account statements and screen shots of the transactions. These items will, of course, be very valuable when you report the fraud.
- Beware of so-called ‘recovery rooms’: fraudsters contact victims of a scam in the past and offer to help them, for a fee, to recover their lost money. Often these constitute yet another attempt at fraud.
For more recommendations on how to avoid investment fraud, please consult the ‘How to recognize and avoid fraud’ page on the FSMA website. Please watch the awareness-raising videos as well (available in French and Dutch only).