Instagram posts promoting fraudulent “get rich quick” investment schemes have suckered in hundreds of users of the photo and video sharing app, who have lost nearly £9,000 each on average, UK authorities have warned.
Action Fraud, the UK’s fraud reporting centre, said on Monday that more than £3m had been lost in 356 separate incidents since October last year. Most of the victims were young people aged between 20 and 30.
Criminals are using Instagram posts to promote “an increased number” of investment schemes, Action Fraud said, luring users with the promise of high returns within hours.
Typically, the scammers request an initial £600 “investment”, which victims send via bank transfer to the fraudster’s account.
“Fraudsters are then sending screenshots of thousands in profit crediting [the user’s] accounts, which they claim can be released for a fee,” Action Fraud said. “Victims have requested to withdraw their funds while they’re still in profit, and at this stage the fraudsters are stopping contact with the victim and closing the Instagram account.”
Inspector Paul Carroll of Action Fraud said: “Opportunistic fraudsters are taking advantage of unsuspecting victims who are going about their day-to-day lives on social media.”
He encouraged social media users never to respond to requests to send money from people who they do not know and to check the credentials of any financial company on the Financial Conduct Authority’s (FCA) website.
Instagram did not respond to a request to comment.
Action Fraud’s report comes just weeks after the FCA warned that investment scams were moving online and growing “increasingly sophisticated”.
“Fraudsters are now contacting potential victims through emails, professional-looking websites and social media channels, such as Facebook and Instagram,” the FCA said, adding that the shift online meant younger investors were more likely to fall victim.
Last year, the FCA found under-25s were six times more likely than the over-55s to trust an investment offer they received via social media.
“With Instagram being one of the most popular apps, it’s no wonder people become immersed in this online life and its absorbing nature blurring the line between reality and the virtual world,” said Jake Moore, cyber security specialist at ESET, an IT security company.
“People can be very tempted to believe such requests especially if peers or friends have already invested. Social proof is a highly regarded persuasion technique used by fraudsters whereby the more followers and traction an account can achieve, the more believable it can be. Sadly though, it usually takes someone from the outside to realise it’s a con.”
Bank transfer fraud cost UK victims £145m in the first six months of 2018, only £31m of which was returned. This month, trade body UK Finance announced a delay in the roll-out of confirmation of payee — a scheme which will check names on bank transfers to reduce money being sent to fraudulent accounts.
More information about the scam and details of how to report cyber crime can be found on the Action Fraud website, actionfraud.police.uk