ARI BAUM, CFP®
WHAT’S THE “HOTTEST” FINANCIAL TIP OR “TRADE SECRET” YOU’VE SEEN ON SOCIAL MEDIA RECENTLY? WHAT ABOUT RETIREMENT HACKS, CRYPTO OFFERS, OR “CUTTING-EDGE” INVESTING ADVICE? IF YOU’RE A SOCIAL MEDIA USER (LIKE MOST), THE FINANCIAL “EXPERT” CHATTER IS ALMOST INESCAPABLE.
So-called “finfluencers” are on nearly every social platform. They tend to offer shortcuts and make grand promises and claims that seem too good to be true. More than ever, people are using social media to learn about money matters.
To help you spot and steer clear of the snake oil, here’s a closer look at today’s most common social media scams, their tactics, and red flags for spotting them.
- Shopping & Discount Scams
Get the best deal on our super exclusive product, but only if you buy now!
That’s the hard line many social media shopping scams proclaim. They entice eager shoppers with too-good-to-be-true offers. After taking the bait and making the purchase, the shopper gets nothing — or they’re sent a poor-quality item that doesn’t match its advertisement.
Tactics: Social media shopping scams usually rely on bait-and-switch tactics, often coupled with a sense of urgency, to get people to act fast, before putting too much thought into the purchase.
Red Flags: If there’s no way to contact the seller or the product has zero reviews, take a closer look before you buy. Legitimate sellers tend to be more transparent both in how to get a hold of them and in their product reviews. Scammers are usually more vague.
- Investment Scams
Don’t miss out on this big opportunity to double or triple your money! But you must invest now!
These money-flipping scams typically promise extraordinary returns, with fast turnaround times. You just have to send your money overseas, buy certain crypto, or buy in on some “guaranteed” investment. Once you do, your money disappears just as fast as the con artists themself.
Tactics: High-pressure sales tactics are usually behind social media investment scams. They tend to come with “proven” claims, “guarantees,” and limited-time offers that can poke at our fear of missing out (FOMO).
Red Flags: Be suspicious of any investment opportunity on social media that touts all rewards and no risks. Avoid offers that require you to send money abroad, complete a wire transfer, or buy a prepaid debit card first. Legitimate investment opportunities are almost never 100% risk-free. So, second guess any investment offers that make those claims.
- Giveaway, Sweepstakes & Lottery Scams
You’ve been selected to win a free gift card for $1,000! Just click here to claim your prize in the next 5 minutes before it disappears forever!
Giveaway scams on social media can pop up suddenly, inviting you to click, like, and share a post before you can claim your prize. After you do, you won’t get money, though. Instead, you’re more likely to get malware or viruses that can steal your personal sensitive information and your money.
Tactics: Surprise, bait and switch, and playing on a sense of urgency all come into play with sweepstakes and giveaway scams on social media.
Red Flags: If you didn’t enter a giveaway, any “prize” you’re informed that you’ve won is probably not legit. Another red flag for these scams is a lack of contact information and no “official” organization behind the prize. Genuine giveaways will have ways to contact the organization associated with the prize, with published, verifiable rules and conditions for winning.
- Job & Earnings Scams
Earn bigger bucks and be your own boss when you work with us!
Huge paydays, mind-blowing benefits, and other lofty promises tend to be the lures with job scams on social media. They promise you millions, a better life, and more time — you just have to pay for the screening process, the “starter kit,” or the initial training. After you do, your money’s gone, and the smokescreen job offer vanishes too.
Red Flags: Take a critical eye to job opportunities that hinge on payment requests. Real job offers do not require an upfront expense for screening, consideration, or placement.
How to Protect Your Finances
on & off Social Media
Social media is still somewhat elusive, especially when talking about facts and finances. This can make it a minefield for anyone who doesn’t know how to spot the scammers and avoid the cons. No matter what social media platforms you use or why you’re on them, staying up to date with the latest scams and swindling tactics can help you make smarter choices with your money. So can a financial professional.
The content is developed from sources believed to be providing accurate information. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. This information is not intended to be a substitute for specific individualized tax advice. Consult with your financial professional regarding your specific situation.
Ari Baum, CFP® is the founder and CEO of Endurance Wealth Partners, with over 26 years of experience in the Financial Services industry. He brings his in-depth experience to Conceive. Believe. Achieve. for his clients.
Securities and Advisory services offered through Prospera Financial Services Inc. Member FINRA/SIPC. Brokerage and Advisory accounts carried by Wells Fargo Clearing Services, LLC.
