People under 25 are particularly likely to fall for Instagram forex scams promising lavish payouts via forex trading or other investment schemes. The phenomenon has become so widespread that even the FCA saw fit to sound the alarm on the issue.
Until not so long ago, people over 55 were considered to be most vulnerable to various scams perpetrated online. It makes perfect sense: a generation who didn’t grow up online would be expected to perhaps be more vulnerable to things such as forex Instagram scams.
This is apparently a thing of the past. Those in the over-55 age group are now less likely to fall for the tricks of online scammers. Young adults, however, are now frequently targeted by shady online operators.
These days, younger people seem to be the most likely to fall for get-rich-quick schemes, and police have stated that a large number of students, in particular, are now reporting that they have been the target of Instagram scams, along with other social media scams. These scams usually take the form of account-hacking or investment scams, so let’s take a look at why these scams work, how to avoid them, and who to report them to.
Why are so many people falling Instagram scams?
Many of these scams are fairly obvious, and some involve impersonating celebrities in order to use personal information. However, it’s still common to fall victim to them. In a way, it’s not surprising that young people are vulnerable to online scams. When it comes to forex trading scams, Instagram is the perfect platform, allowing scammers to appeal to a certain target audience, eliciting greed and possibly envy, and then hammering home the pitch.
The scammers start out by setting up Instagram accounts. They feature pictures of attractive young adults posing in front of expensive mansions and cars, travelling to exotic places, and generally enjoying a luxury lifestyle. The message is clear: this could be you! With the rise of influencer culture, many scammers create profiles that centre on a specific person (who may not even be real), elevating them to influencer status, and often glorifying ‘hustle culture’.
The ‘hustle’ these accounts sell tends to be forex trading or investing in cryptocurrency. In addition to the actual pictures of the people involved, the accounts post pictures about forex trading and Bitcoin, such as screenshots of their ‘deals’ showing ridiculously high trading profits. Unsurprisingly, the screenshots are also fake.
How does the scam work?
With forex scams, Instagram works well as images can be used to get the attention of potential victims, and it’s par for the course to follow influencers and other public figures they have never actually met. Having followed the bogus account, people are then approached through Instagram Chat, Facebook Messenger or WhatsApp by the scammers. Many engage in conversation, perhaps flattered or just curious to find out more about that cool, rich person the scammers have invented. The conversation is quickly steered towards finances and lo and behold: the Instagram rich kids are more than willing to share the tips and tricks that allowed them to build their wealth and to help others become as cool as they are.
How is Bitcoin involved?
Bitcoin and other cryptocurrencies are sometimes favoured by scammers as they are anonymous and payments are not easy to recover. The victim is usually talked into creating a Bitcoin account and transferring money to the scammer in Bitcoin. These transfers cannot be charged back and the funds obtained by the scammers can be laundered extremely easily in the crypto-sphere.
If this initial transfer involved a credit card, for example, it might be possible to bring credit card companies in to dispute the payment, but this way, there’s not much that victims can really do when the whole thing turns out to be a scam.
Once their ‘investment’ reaches its intended destination (the scammer’s pockets), victims are kept in the loop regarding the ‘profits’ earned on their behalf. There are, of course, no profits, and when they ask for them, the scammer will refuse. They will perhaps pressure the victim to send more money, or disappear altogether.
It is sometimes possible for investigators to ‘follow the money’ with cryptocurrencies as all the transactions are publicly available, but this is not as easy as it is with a card payment or normal bank transfer.
The ‘trading’ angle
Scammers allegedly create an account with an online FX/CFD provider (binary options were heavily used in the past). They offer to manage this account for you, trading on your behalf, and then send Photoshopped screenshots showcasing the profits they have made for you.
The ‘deals’ are usually agreed upon for one to two weeks. After this, the time comes for the scammer to return the money and the profits accrued. To do that though, they will require another payment (usually 10% of the total) for fees/taxes. Those who do send money again are swindled yet again. Those who do not (they don’t have the funds, or they begin suspecting the scam) are considered to have willingly given up the funds to the scammer.
Nowhere along the scamming chain are there any papers signed, any terms and conditions presented, or any guarantees offered, other than the ‘word’ of the scammer.
There are legitimate brokers that offer account management, and many scammers pretend to work for these brokers, or set up their own ‘trading companies’ with legitimate-looking websites, but there is nothing legitimate about the way that they operate.
The safest forex brokers
The best way to avoid scams is to always trade with a regulated broker. We have listed below the safest forex brokers for you to trade with:
| Broker | Features | Min Deposit | EURUSD Spread | ||
|---|---|---|---|---|---|
 Your capital is at risk US Clients: No Regulated : Yes | – Regulated by FSCA, IFSC and FSC | $200 | ECN 0.1, Standard 1.6 | Sign Up Open Demo Account Read FXTM Review | |
| Your capital is at risk US Clients: No Regulated : Yes | – Flexible leverage up to 500:1 | $200 | From 0.1 | Sign Up Open Demo Account Read BlackBull Review | |
| Your capital is at risk US Clients: No Regulated : Yes | – 40% New Member Bonus | $100 | Fixed | Sign Up Europe* CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Open Demo Account Read AvaTrade Review | |
| * 82% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you can afford to take the high risk of losing your money US Clients: No Regulated : Yes |
| 100GBP/AUD/EUR/USD | variable | Sign Up * 82% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you can afford to take the high risk of losing your money Open Demo Account Read Plus500 Review | |
| Between 74-89 % of retail investor accounts lose money when trading CFDs US Clients: No Regulated : Yes |
| $200 | NDD 0.09 / Standard 0.69 | Sign Up Between 74-89 % of retail investor accounts lose money when trading CFDs Open Demo Account Read Pepperstone Review | |
| 76% of CFD traders lose money US Clients: No Regulated : Yes |
| $50 (varying by Country) | from 1 | Sign Up 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. Open Demo Account Read eToro Review | |
| Your capital is at risk US Clients: No Regulated : Yes |
| $5 | From 0.0 pips | Sign Up Open Demo Account Read XM Group Review | |
| Your capital is at risk US Clients: No Regulated : Yes | – CySEC, FCA, FSCA, SCB Regulated | $100 | Sign Up Open Demo Account Read FxPro Review | ||
| | |||||
How big is this industry?
According to the FCA, while scammers will usually settle for just about any sum they can squeeze out of their victims, the illicit funds generated by the activity are upwards of $100,000 a day.
University students are placed under an enormous amount of financial stress these days. Many of them begin their studies being entirely unsure of whether they will ever finish them, and most worry about finishing them in debt.
These circ*mstances make these young people not only desperate for cash, but also much more willing to listen to those offering get-rich-quick solutions.
Students are not the only demographic vulnerable to such scams though. Anyone seeking financial opportunities can be at risk, and many young people fall into that category.
It has been estimated that one in 10 people fell for some kind of scam just during the COVID-19 pandemic. While this number is not particularly large, it is big enough to make the activity a profitable and worthwhile one for fraudsters.
How to Avoid Instagram Scams
First, simply accept that if something looks too good to be true, it almost certainly is. Someone offering you 300% to 400% returns on your investment within a couple of weeks (or even months) just cannot be real.
Always check the registry of your local financial regulator (such as the FCA, CySEC or FSCA) to see whether the entity offering you the ‘deal’ is indeed an authorised one. This goes for individuals as well as firms. Needless to say, scammers are not registered with these regulators.
Many financial authorities have offender lists set up, so check those to see if the scammer’s name or website is on there.
Be proactive. Carry out independent researchand seek advice before making any investment decision. Some national financial authorities have hotlines set up through which would-be scam victims can seek assistance before any monetary loss occurs.
Finally, make sure to report the scammer if you are scammed, or even if you are the victim of an attempted scam, to help others who may also fall for the dubious deals peddled by these online swindlers.
Conclusion
Although they have been all the rage for some time now, Instagram scams are relatively easy to spot and, ultimately, to avoid.
Just bear in mind that if it looks too good to be true, it definitely is.
Check the credentials of any brokeryou invest with carefully, and never consider handing anyone any money for investment purposes without having papers signed, background checks conducted, terms and conditions understood and guarantees provided.
Do you know of any social media accounts like the above mentioned? Please post a comment about them to help others avoid being scammed. Thank you.
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