By PAUL O’DONOGHUE, Senior Correspondent
CONSUMERS should be wary of taking investment advice from ‘finfluencers’ who use exotic locations to sell an image of success, according to the head of financial crime at the UK’s FCA (Financial Conduct Authority).
Speaking on ‘Collared’, a new podcast from AML Intelligence launching on Monday May 18, Beth Harris warned that many fraudsters are targeting social media users.
“A lot of fraud has moved online, and there has been a big rise in finfluencers,” she said.
“So often, if you went onto social media, you would see people who are often looking like they’re in Dubai or some other nice location on a nice sunny beach, normally with a fantastic sports car behind them.
“They’re basically saying: ‘I’m a phenomenal trader, if you follow my trading advice, then you know you can get rich too’.
Risk of advice from ‘finfluencers’
“Then what people don’t realize is that then they perhaps will get trading signals sent to them, but whether or not someone loses money or makes money by trading, the person who’s promoted in the first place gets paid anyway, because they get paid per transaction.
Ms Harris said that while many ‘finfluencers’ promote responsible investing, others advertise investment schemes “that might just be an out and out fraud”.
“So they’ll say, put your money into X, and X won’t really exist. We’re definitely seeing an increase of those,” she said.
The full interview on the ‘Collared’ podcast, which will go live on Monday May 18, covers how authorities are trying to combat ‘finfluencer’ scams through increased data sharing. It also examines the phenomenon of ‘narco-states’ in the light of warnings that EU countries are now at risk of being corrupted by drug gangs.
Series One of the 12-episode podcast will feature in-depth financial crime explainers, the latest topics of the day as well as interviews and analysis with prominent executives and leaders in the sector.
The first two episodes will be available on all major audio platforms from Monday.
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