After one loveMONEY reader lost £500 Instagram investment scammer, we reveal how these scams work and how to spot a fake investment offer.
Instagram users are losing hundreds of thousands of pounds each month to investment scammers, new figures show.
According to Action Fraud, 164 Instagram users lost £358,809 to investment scams as fraudsters in June 2020 alone. That’s an average loss to victims of around £2,200
These fraudsters often contact people about opportunities to make eye-watering returns in a few days for a small initial investment.
Usually, this investment is a few hundred pounds (and the fraudster claims to take a small commission), making it attractive for those new to investing as the upfront cost is small.
Once the money is sent (by bank transfer or via a cryptocurrency platform), the scammers try and get more money by claiming profits cannot be sent due to tax issues before blocking them.
As savings rates are abysmal – at the time of writing, you can get 1.6% at best by locking your money away for five years – and people are spending more time at home, there’s more exposure to investment scams.
Before I reveal how a loveMONEY reader fell for an Instagram investment scam, it’s worth remembering that investing is usually a long-term commitment –…