NZ Warns of Fake Celebrity Crypto and Forex Trading Scams

The Financial Markets Authority (FMA) of New Zealand has issued a public warning against bogus celebrity endorsement adverts on social media that promote cryptocurrency and FX trading scams. The warning announced today underscores the growing danger presented by these fraudulent operations.

Multiple websites implicated in these forgeries have been identified by the FMA, which is suspicious that more are connected due to the frequent modifications to their online appearance. Repeated complaints from affected parties, including New Zealanders who have been unable to withdraw their investments and are being charged additional fees to access their assets, prompted the regulator to issue this warning.

Scam Techniques Unveiled

The FMA has outlined how these fraudsters operate. Initially, advertisements are distributed on social media sites, posing as authentic news pieces from respectable New Zealand media sources, replete with photographs of local personalities. These advertisements may not immediately seem to be about investing.

When visitors click on these advertisements, they are sent to bogus news items on impostor sites. These articles include manufactured interviews with celebrities that describe their alleged riches from utilizing a certain investing platform. The articles feature links to fake investment sites. After providing their contact information, prospective victims get a call from someone acting as a broker or financial advisor, demanding a first deposit of USD $250 or EUR 250.

To gain confidence, scammers may even urge victims to download remote access software, which allows the fraudsters to get control of their computers. To provide a sense of legality, initial “profits” may be sent to the victim's bank accounts. However, when the victims want to withdraw monies, they are informed that they must first pay a significant charge. Despite paying these costs, the victims get nothing in exchange.

Widespread use of fake celebrity endorsements

One prevalent issue is fake celebrity endorsements when con artists use pre-existing pictures or videos of celebrities to give their fraudulent schemes credibility. Artificial intelligence (AI) technology has made matters worse by enabling scam artists to create convincingly fictitious endorsements.

Such frauds often advertise high-risk derivatives and cryptocurrency trading. Facebook and other social media sites have faced legal issues for enabling these false adverts. In 2019, a Dutch court ruled against Facebook, requiring it to remove phony celebrity endorsements used to promote cryptocurrency frauds.

Earlier this year, Australia, New Zealand's neighbor, became aware of fake news pieces and deepfake movies portraying celebrities such as Elon Musk. Australian authorities have warned consumers about these frauds, especially those disguised as sponsored posts or advertisements on social media.

The FMA's Advice to the Public

Given these concerns, the FMA advises great care when seeing social media advertising featuring celebrities proposing financial possibilities. The regulator advises the public not to click on such advertisements or disclose personal information.

“If you come across these ads, do not click on them or provide them with your personal information,” the FMA said.

The FMA's notice emphasizes the significance of being vigilant and skeptical in the face of appealing but possibly fraudulent internet investment options. By being aware and alert, New Zealanders may avoid becoming victims of these complex schemes.