New York State Attorney General Janet Leesha issued a warning to investors on Monday (April 6) to alert New Yorkers to be cautious of investment scams spreading on platforms under Meta, including Facebook, Instagram, and WhatsApp. The Attorney General’s Office pointed out that scammers are increasingly using deceptive advertisements and deepfake technology to lure investors into high-risk scams, swindling victims of their life savings.
In her statement, Leesha stated that scammers are using social media to impersonate famous figures from the financial world or celebrities to steal hard-earned savings from New Yorkers. She noted that from fraudulent investment platforms, deepfake endorsements by celebrities, to fraudulent cryptocurrency projects, these scams are becoming increasingly sophisticated. Therefore, she urged the public to maintain a high level of skepticism towards investment advertisements on social media because “if an investment sounds too good to be true, it’s likely a scam.”
Common investment scams seen on Meta platforms include “pump and dump” schemes, confidence scams that lure investments after gaining trust, and fake cryptocurrency investment schemes. These scams typically attract victims in what appears to be a professional and trustworthy manner before gradually extracting more funds.
In “pump and dump” schemes, scammers often start by posting ads on Facebook or Instagram, using unauthorized photos or names of well-known financial personalities, claiming to provide “insider groups” or “guaranteed high returns” investment advice.
After users click on such ads, scammers often request to continue the conversation on encrypted communication platforms like WhatsApp or Telegram to evade oversight. Subsequently, victims are pulled into group chats, receive so-called expert advice and false testimonials, and are convinced to buy certain low-priced stocks or cryptocurrencies. With the scammers’ promotion, the prices of these assets briefly rise before the scammers sell high and leave victims to incur losses from the subsequent price drop.
Another type of confidence scam involves enticing investors to leave contact information through ads or fake news articles. Subsequently, scammers will reach out to victims, build long-term trust relationships, claim they can teach trading, or even arrange “personal advisors” for daily contact, guiding victims into seemingly professional but actually forged investment websites or applications.
These scams often lead victims to initially invest small amounts of money and witness substantial “profits” within a short period on the platform, even allowing withdrawal of a small portion to create an illusion of a reliable platform. As victims gradually trust more, they might invest large sums, with some even borrowing money from family and friends for investment. When victims attempt to withdraw profits, scammers claim further payments are needed for commissions, taxes, or other fees, and victims often find it impossible to recover their funds even if they comply.
The Attorney General’s Office specifically warns that investment advertisements on social media should be viewed as high-risk signals. Legitimate brokerages and investment advisors, especially individual advisors, typically do not publicly share specific investment recommendations on social platforms.
Authorities list several “red flags” that should raise alertness, including claims of “zero risk” or “guaranteed returns,” urging immediate investment by stating “missed opportunities,” using AI-generated celebrity images or videos for endorsements, requesting transfers through cryptocurrency ATMs or private digital wallets, shifting conversations from Facebook to WhatsApp or Telegram, and even asking victims to collect funds for others and convert them into cryptocurrencies.
To protect oneself, the Attorney General’s Office advises the public to conduct independent verification before investing and not easily believe advertisements or salespersons’ claims. Investors can use the “BrokerCheck” tool from the Financial Industry Regulatory Authority (FINRA) to verify if the other party is a registered professional (but also beware of scammers impersonating real practitioners); furthermore, they should search for company or agent names with keywords like “scam” or “complaint” to check reviews and carefully verify if email addresses come from legitimate company domains.
The notice also reminds individuals to be wary of deepfake videos. If a video seems slightly unnatural or if the audio is out of sync with the mouth movements, it may be forged content. If a celebrity discusses investment in a video, individuals should search for the original video because scammers often repurpose old interviews. Prominent figures typically do not endorse or provide specific investment advice for dubious cryptocurrency trading platforms online.
Moreover, the Attorney General’s Office also urges people to safeguard personal information by setting the friends’ list, photos, and posts on Facebook, Instagram, and WhatsApp accounts to private. If a friend suddenly messages to recommend an “excellent investment opportunity,” individuals should verify the account via phone or text to prevent account hijacking. Individuals should not provide login information, social security numbers, or financial details to people known only online, and should not let strangers remotely operate their computers or phones.
Lastly, the Attorney General’s Office warns that many scams involving cryptocurrency transactions are often irretrievable once completed. If individuals suspect they have been scammed, they should save communication logs and transaction records, report to the Attorney General’s Office, and seek assistance by calling 1-800-771-7755.