Release Number 7957-19
July 3, 2019
CFTC Issues Social Media Customer Protection Advisory
Washington, DC — The Commodity Futures Trading Commission (CFTC) today issued, "There’s Nothing to Like about Scammers on Social Media," a Customer Protection Advisory that warns customers to beware of and avoid unregistered brokers and advisers, as well as fake testimonials and so-called trading experts on social media platforms. Fraud offenders can create many online profiles or anonymous identities, and use them in a coordinated way to lure people into schemes.
“As the technology utilized by consumers has evolved over time, so too have the tools that scammers use to target potential victims,” said Erica Elliott Richardson, CFTC Director of the Office of External Affairs. “We have seen scammers use social media in their attempts to exploit individuals who are interested in trading foreign currencies, binary options, digital currencies, and precious metals. The CFTC encourages consumers to fully research all potential investments and stay informed about the latest scammer tactics in order to avoid these schemes.”
There are several red flags to look for to help identify fraudulent social media profiles. They typically flaunt wealth or brag about their huge “win” percentages. Photos of exotic vacations, sports cars, and mansions are common, as well as the inability to find verifiable facts about the person’s background, credentials, and experience. The profiles commonly appear to be new with few connections to family, friends, or colleagues. Bogus profiles are designed to build a façade of success. Posts may even feature screen shots of “winning trades” or huge account balances.
This advisory also provides overall social media safety tips investors should keep in mind when they are browsing social media for investment opportunities.
See the CFTC’s Other Customer Protection Fraud Advisories
The CFTC has issued several other customer protection that provide the warning signs of fraud, covering such investments as precious metals, foreign currency commodity pools, binary options, and systems sold on the Internet, among others.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or online.
To learn more, visit CFTC.gov/ConsumerProtection/FraudAwarenessPrevention.