Fraudsters trading on fake celebrity endorsements stole millions of pounds from unwitting individuals last year, with one person handing over £370,000 to a cryptocurrency investment scammer.
An advertisement on social media platform Facebook featuring Holly Willoughby and Philip Schofield claimed to be a legitimate investment offer, leading the victim to transfer the record loss in multiple payments.
NatWest’s annual super league table of celebrity scams has revealed that the name of MoneySavingExpert founder Martin Lewis has also been taken to no avail, with the most prominent case featuring well-known TV presenter the last year seeing an individual hand over over £317,000 in a bogus ‘Bitcoin Evolution’ investment scam.
The bank’s study suggested that Instagram is the platform most exploited by criminals to deliver fake ads, with the number of fraudulent ads on Facebook and Snapchat following close behind.
Cryptocurrency scams are increasingly claiming endorsements from fake celebrities to gain online attention, with the seven most prominent cases all claiming to offer investment opportunities in various digital currencies.
Criminals are also exploiting crypto exchanges by offering to mine the account on behalf of unsuspecting members of the public, then using this as an opportunity to siphon off funds into their own accounts, NatWest said.
Since cryptocurrency is not protected by the UK’s Financial Services Compensation Scheme and most exchanges are not regulated by the Financial Conduct Authority, this means that victims are less able to verify whether an advertisement is legitimate.
Other celebrities whose identities are regularly used without their knowledge or consent to scam people into parting with their money include well-known business leaders such as Dragons’ Den’s Deborah Meadon, Richard Branson, as well as popular television personalities, Piers Morgan and Gordon Ramsey. .
NatWest’s Stuart Skinner said: “Fraud is on the rise in the UK, the most powerful tool we all have to defeat these criminals is knowledge. Knowing that criminals exploit the images of celebrities, we can all take steps to protect ourselves.
He urged people to take five minutes to think about the likelihood that an ad promising big profits, high rates of return, and/or offering to help you invest in cryptocurrency is a scam, adding, “If it sounds too good to be true, it usually is.
Social engineering tactics
A June report by UK Finance showed that while the banking industry prevented £1.4bn of unauthorized fraud in 2021, criminals managed to steal more than £1.3bn through authorized and unauthorized frauds last year.
Among the most “pernicious and pervasive” frauds recorded last year were bank clerk impersonation, romance scams and investments.
The report states, “Criminals’ use of social engineering tactics through deception and impersonation scams is a key driver of authorized push payment scams and the use of engineering tactics. social media to scam people has only increased during the pandemic.
“Typically, these deception and impersonation scams involve the criminal impersonating a real individual or organization and contacting the victim using a range of methods including phone, email and text. Criminals also use social media to approach victims, using advertisements for assets and investments that never materialize once payment is made.
The latest fraud figures come just days after the government scrapped the long-awaited Online Safety Bill, which was due to pass before the summer parliamentary recess.
Rumors are now swirling that key clauses could be dropped from the bill in the fall, particularly rules requiring social media, apps, websites and search platforms to filter content and limit viewing. exposing users where illegal or considered harmful.
These proposals were added to the bill in May this year after controversy over how sites such as Facebook, Instagram and Google decide what content is harmful and what is not.
Victoria Hewson, head of regulatory affairs at the free market think tank the Institute of Economic Affairs, said at the time that the bill’s delay provided “an ideal opportunity to reconsider this highly controversial legislation”.
She said: “The bill not only raises serious free speech issues, but has also become complex and unmanageable. The latest amendments have further aggravated this situation.
“The bill should be scrapped entirely or reduced to what is absolutely necessary to protect the safety of the most vulnerable.
“It should not seek to protect adults from all sorts of alleged harm at the cost of billions of pounds to businesses and the expense of free speech.”