Investment scams aren’t anything new: Bad actors have long used pump-and-dump tactics to hype stocks or cryptocurrencies, preying on emotions like fear and greed. And who wouldn’t want big—or even steady—returns on their money, especially amidst tariffs and other economic turmoil?
Scammers are currently capitalizing on this with fraudulent Facebook ads to lure users into handing over large sums of money. Here’s how to spot these schemes and avoid falling victim.
According to a group of 42 state attorneys general, the current fraudulent investment campaigns also happen to have elements of impersonation scams.
The scheme begins with ads on Facebook that feature prominent investors, including ARK Investment Management’s Cathie Wood, CNBC’s Joe Kernan, and Fundstrat’s Tom Lee, along with other wealthy individuals like Warren Buffet and Elon Musk (none of whom have any actual affiliation with the ad). If you click the ad, you’ll be prompted to download or open WhatsApp to join an investment group.
This is where the pump-and-dump kicks off. “Experts” in the group advise members to purchase specific stocks, inflating the price, which they in turn sell and profit from. The AG letter to Meta detailing the scam includes reports of individuals losing anywhere from $40,000 to $100,000 or more after clicking on a fraudulent ad on Facebook.
Other investment scams originating on Facebook involve cyber criminals harvesting sensitive personal information via fraudulent investing platforms (also by spoofing celebrity endorsements).
For many people, it seems obvious that you shouldn’t get your investment advice from a Facebook ad or WhatsApp group. But fear and greed are powerful emotions, and scammers are counting on these social engineering tactics working at least some of the time.
That’s why you should be wary of any advice that promises an unrealistic rate of return in a short period of time with no risk of loss as well as endorsements from celebrities, political figures, and well-known investors (who are almost certainly not endorsing anything). It’s also just good practice not to click ads on Facebook, which are easy vectors for spreading scams and malware.
Another sign of a scam is content or communication that appears to be generated by AI. After joining a WhatsApp group, an investigator from the New York Office of the Attorney General was called by a scammer who used AI to translate her speech into English. Unfortunately, emotions can cloud our ability to identify AI-generated content if we want to believe what we’re seeing.
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Jordan Calhoun
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