A new scam targets online investors by using fake news articles and deepfake videos of celebrities and public figures, including Elon Musk, to promote fraudulent online trading platforms.
The Australian National Anti-Scam Centre (NASC) has issued a warning to consumers to be wary of these scams, especially on social media, where they often appear as sponsored posts or ads.
Scammers Use Fake Celebrity Endorsements to Lure Online Investors
According to the NASC, Australians lost more than $8 million to online trading platform scams last year, with 400 reports made to Scamwatch.
The scammers create fake news articles and deepfake videos, which are manipulated to make it seem like the person is speaking, to convince people that celebrities and well-known public figures are making huge sums of money from online trading platforms, such as Quantum AI, Immediate Edge, and Quantum Trade Wave.
The fake endorsements claim that the online trading platforms use artificial intelligence or other emerging technologies, such as quantum computing, to generate high returns for investors. However, these claims are false and the online trading platforms are not regulated or licensed by any authority.
“We are urging Australians to take their time and do their research before taking up an investment opportunity – particularly those seen on social media,” said Catriona Lowe, the Deputy Chairwoman of ACCC.
‘Quantum AI’ and ‘Immediate Edge’ are some of the most prolific online investment trading platform #scams. Find out how ASIC, as part of the National Anti-Scam Centre, is working to disrupt investment scams https://t.co/fcgysXImoR@acccgovau
— ASIC Media (@asicmedia) March 1, 2024
The scammers entice victims to sign up for the online trading platforms by asking for a small investment of around $250 via credit card. They then provide the victims with an online dashboard or a third-party app to show them their supposed profits.
The scammers then persuade the victims to invest more money, sometimes allowing them to withdraw a small amount to build trust. But when the victims try to withdraw their funds, the scammers ask for more fees or taxes, or lock them out of their accounts.
“We know of an Australian man who lost $80,000 in cryptocurrency after seeing a deepfake Elon Musk video interview on social media, clicking the link and registering his details through an online form,” Lowe added.
this deepfake scam named Quantum AI with AI generated video & audio of @elonmusk still spreading on youtube and possibly elsewhere. Please be alert and please release warnings often enough @elonmusk and prevent people from these money scams pic.twitter.com/rsInZnhdJS
— Selin Oner Kula (@slnoner) November 18, 2023
Finfluencers over Common Sense
The reliance of retail investors on financial influencers, or finfluencers, over their own market research is becoming a concern for regulators worldwide. This trend, accentuated by the rise of deepfakes, has seen authorities from various countries raising alarms.
Over a year ago, the Cyprus Securities and Exchange Commission revealed a study showing that one in three investors would trust a social media authority over someone from their close family. In France, this trust level exceeds 40%, marking the highest, while in Germany, it's the lowest, with only one in five retail investors believing advice from platforms like TikTok, YouTube, and Instagram.
The UK's Financial Conduct Authority announced in July plans to start regulating the finfluencer industry and take a stronger stance against illegal advertisements on social media, including deepfakes.
Meanwhile, this week ASIC reported that it had received a bankruptcy order against Tyson Scholz, a social media finfluencer known as "ASX Wolf." Scholz faced bankruptcy after failing to pay the regulator AU$456,296.64 as ordered by the court.
Investment Scam Fusion Cell
The NASC’s investment scam fusion cell, co-led by the ACCC and ASIC, has been working to disrupt deepfake scams by referring them to social media platforms for removal and blocking payments to them.
The NASC advises consumers to “stop, think, and protect” themselves before investing in any online trading platforms, especially those seen on social media.
“The ACCC and ASIC will continue to work together as part of the National Anti-Scam Centre's efforts to stop scammers from harming Australians,” Lowe concluded.
Consumers should check ASIC’s investor alert list and professional register to see if the online trading platform is legitimate and authorized. They should also do an internet search to see any warnings or complaints about the online trading platform or the celebrity endorsement.
Consumers who have been scammed or experienced cybercrime should immediately contact their bank and report it to Scamwatch. They can seek emotional support from Lifeline or Beyond Blue if needed.
