The FSMA warns the public of an increasing number of fraudulent advertisements on social media platforms like Facebook and Instagram, which lure the public to WhatsApp groups that claim to offer exclusive investment tips.
How does the fraud work?
An advertisement on social media invites you to participate free of charge in a WhatsApp group where, it is claimed, exclusive and highly profitable investment tips are shared.
In order to gain consumers’ confidence, such advertisements are shared via social media profiles that pose as well-known financial institutions, news services or celebrities. This is a typical example of cloned firm fraud. In some cases, you are asked to fill in a form first, with information about your investment experience, financial situation or areas of interest.
Typical characteristics of these attempts at fraud
- Promises of unrealistically high returns without any risk.
- Investing in a fictitious initial public offering (IPO) of a large company or in shares that are said to be sure soon to increase in value.
- The offer is available (free) only for a short time or is limited to an exclusive group.
- You are put under pressure with messages such as: ‘If you leave now, you will miss out on this unique opportunity forever.’
- Communication takes place outside of official channels, via WhatsApp, Telegram or private messages.
What are the risks?
Although access to these WhatsApp groups appears at first to be free, the aim is to swindle people out of their money or get them to invest in worthless shares. In addition, the personal data they gather may be misused to commit identity fraud or for further scams.
What can you do?
- Always check in the FSMA register that the provider holds an authorization.
- Never trust blindly in the logo or name of a well-known financial institution when it’s used in an online advertisement. Always check the official website.
- Report any suspect advertisements, forms or profiles to the platform (like Meta).
- Never respond to such invitations via WhatsApp, Telegram or other unofficial channels, especially if you are required to provide your personal data in order to do so.
I’ve fallen victim. What should I do?
- Stop making any transactions and break off all contact; do not deposit any more money and don’t provide any additional personal or financial information. Break off all contact with the fraudsters. They may try to manipulate you in order to take even more money from you.
- Contact your bank: inform your bank immediately if you have made any payments to the fraudulent platform.
- Report the fraud to the competent authorities: contact the FSMA and file a report with the police.
- Document all exchanges of data and transactions: gather all evidence of your exchanges of data with the platform, including emails, messages, account statements and screenshots of the transactions. These items will, of course, be very valuable when you report the fraud.
- Beware of ‘recovery rooms’: fraudsters contact victims of a previous scam 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 our awareness-raising videos as well (available in French and Dutch only).