This week, Michael Hewson, the host of the Good Money Guide Podcast, was cloned, and a fake AI video advert was published on Facebook and Instagram that directed users to a scam WhatsApp group. This has been reported to Meta via the usual channels, but as I write this three days later, it has still not been taken down, and the Sponsored post has now been viewed 29,000 times, up from 2,000 views when we first reported it as a scam. 18 comments have been added and deleted, presumably by the scammers.
Facebook has a long history of not removing fake posts, as in the past, it has taken Meta 1,024 days to remove a post we reported as a scam.
So, having dealt first-hand with how WhatsApp scams work, in this guide, I’ll explain what they are and how to avoid them.
What are WhatsApp scams?
Financial scams on WhatsApp usually start via a video posted on social media. This could be a clone of a real person or real people telling lies. Below is an example of a fake AI-cloned video. Examples of real people telling lies include young men driving supercars claiming to offer free trading advice where you can copy their trades. You can see an example of these here. You can see the real video of Michael hosting the Good Money Guide Podcast here.
Responding to this Michael Hewson said: As someone who has been in the industry as long as I have you get used to copycat accounts on social media, however this is on a whole new level. Here we have social media companies actively taking money from fraudsters and promoting posts that are clearly fake, and have been reported as such. In my opinion this amounts to enabling fraud and needs to stop. Meta needs to be held to account for taking money without doing proper diligence on these types of posts.
These videos are then promoted on social networks using interest-based targeting. It is very easy to target an audience using the Meta Ads manager to serve your post to people who watch videos about trading, investing and getting rich quick schemes.
Scammers can even use Meta’s Automated Ads tools to give personalised ads based on investing, trading, the stock market and money that get better over time.
These ads are so highly targeted because the social networks know exactly what content people engage with, and once you express an interest in legitimate information on investing, you will be added to an advertising audience of someone who may buy a financial product.
They are so effective because they are giving people what they want.
Just before a scammer submits an ad to be published, they are asked to categorise it if it is a financial product, but this is not mandatory. Scammers can just skip this step.
Ads are then set as “In Review” where Meta approves the advert.
I think this, makes Meta culpable and liable for profiting from scammers’ fake adverts. They should be fined by the FCA and OFCOM and held to the same standards as broadcasters.
Ironically, whilst testing this process, the advert we submitted was rejected, and our Meta ad account was automatically restricted. Stating: We’ve restricted your account as a safety measure because some of your activity looks like it doesn’t follow our rules. This goes against our Advertising Standards on account integrity.
But, with WhatsApp it is an encrypted network, and all you need is a phone number which can be untraceable if the sim card is bought with cash.
How do WhatsApp investing scams work?
Once a user joins the WhatsApp group, a few different things can happen.
- They will cold call you using high-pressure sales tactics to try and simply get you to send them money or cryptocurrency.
- They will try to give you some free software that they claim is an investment or trading platform, but it is actually malware that can take over your phone, which they will use to access your banking apps and email to steal passwords and personal data.
- They will offer you free trading signals that, if you follow, can make you money. Scammers make money here by referring you to a disreputable trading platform that pays them a fee for each client they introduce. This fee is usually quite high because the trading platform knows you will lose money on the signals and simply does not hedge your trades in the underlying market, essentially acting as a bookie.
How to avoid WhatsApp trading scams?
The first thing to do is obviously be very sceptical of anything you see on social media. Even if it seems to come from an official channel, everything can be copied and cloned. Even the FCA Register has been cloned by scammers, which is supposed to be a list of all the legitamate regulated firms in the UK.
The second thing to do is if something looks too good to be true, it probably is. Get-rich schemes do not work. Also, anyone with a legitimate trading strategy will not be offering it for free on social media.
@good_money_guide Are trading educators fake? #investing #trading #sellingsignals #tradingeducation ♬ Sunrise – Official Sound Studio
The third thing to do is never click on external links from social media apps or networks. If you are curious about a scam or an offer, always do an independent search for the name of the person or firm offering it. This is important for two reasons. If you click on a link, the social network algorithm will note that content is of interest to you and serve you more fake ads. It will get to a point when your entire feed is scam adverts. In the space of three minutes after clicking on Michael Hewson’s fake AI cloned video, I was fed adverts leading to scam WhatsApp groups from Cathie Wood, CEO of Ark Invest, Karen Finerman from CNBC and Jeremy Grantham from GMO.
The second reason this is important is that websites can contain malware and viruses that can automatically download to your computer if you do not have sufficient protection. Scammers often point adverts to safe websites to pass initial ad screening, then add automatic redirects to a more sinister URL.
The fourth thing to do, and probably the most important thing to do, is to report fake posts as scams. Our research has shown that only 20% of those who think an advert is fake on social media report it. If as many people as possible report fake ads, there is less chance of other people not being ripped off and the networks removing them quickly.
For more information, I have written extensively on different types of social media scams in the past, including obtaining official statistics from the police that show the extent of how much people in the UK have been financially scammed on social media. You can find these guides below:
- UK Investors Lose £75 Million To Financial Scams On Social Media
- Telegram crypto scams
- TikTok trading scams
- Instagram trading scams
- Copy trading scams
- CFD scams
Richard is the founder of the Good Money Guide (formerly Good Broker Guide), one of the original investment comparison sites established in 2015. With a career spanning two decades as a broker, he brings extensive expertise and knowledge to the financial landscape.
Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
Richard’s contributions and expertise have been recognized by respected publications such as The Sunday Times, BusinessInsider, Yahoo Finance, BusinessNews.org.uk, Master Investor, Wealth Briefing, iNews, and The FT, among many others.
Under Richard’s leadership, the Good Money Guide has evolved into a valuable destination for comprehensive information and expert guidance, specialising in trading, investment, and currency exchange. His commitment to delivering high-quality insights has solidified the Good Money Guide’s standing as a well-respected resource for both customers and industry colleagues.
You can contact Richard at richard@goodmoneyguide.com
