£75m a year is lost to investment fraud on social media
Reports of investment scams on social media platforms have skyrocketed in the past three years, according to police data.
Instagram and Facebook users reported the most scams in 2022, while TikTok and LinkedIn were associated with the highest losses per victim.
This data was obtained through a Freedom of Information request to Action Fraud by the comparison site Good Money Guide.
Which? has repeatedly warned about investment and other scams on social media, revealing that the five websites or apps most likely to be cited by fraud victims are Facebook, Google, WhatsApp, Instagram and Yahoo Search.
Read on to find out how much victims lost on popular social media platforms and for our top tips on avoiding investment scams.
Sign up for scam alerts
Our emails will alert you to scams doing the rounds, and provide practical advice to keep you one step ahead of fraudsters.
Sign up for scam alerts
Social media sites and investment scams
Action Fraud's data shows that the number of reported investment scams relating to social media platforms has trebled since 2019, and total losses have risen from £13m to £75m.
Instagram users reported the most investment scams in 2022 (1,857) followed by Facebook (1,193). These two Meta-owned brands were also the worst social media platforms in terms of total losses from 2019 to 2021. For losses per report, the worst sites in 2022 were TikTok (£138,472) and LinkedIn (£77,428).
Victims aged 20-29 and 30-39 were most likely to report investment scams relating to social media, accounting for 32% and 25% of reports respectively.
Investment fraud on social media in 2022
| Platform | Losses | Reports | Average loss/report |
|---|---|---|---|
| TikTok | £6.92m | 50 | £138,472 |
| £8.43m | 109 | £77,428 | |
| YouTube | £10.04m | 231 | £43,502 |
| £32.61m | 1,193 | £27,333 | |
| £3.65m | 157 | £23,233 | |
| £13.05m | 1,857 | £7,026 | |
| TOTAL | £74.7m | 3,597 | £20,772 |
Note: Good Money Guide submitted a Freedom of Information request to the National Fraud Intelligence Bureau regarding scam reports related to social media platforms that mention ‘trading’, ‘investing’, ‘stocks’, ‘crypto’, or ‘broker’.
Underreporting of fraud
If you live in Scotland you can report a scam directly to the police by calling 101.
People in England, Northern Ireland and Wales can file reports to Action Fraud, the national fraud and cybercrime reporting centre which collects reports on behalf of the police. But Which? has previously found that too few victims are submitting reports.
Only a quarter of 1,008 fraud victims we surveyed in June 2022 said they had contacted Action Fraud, suggesting true fraud figures are much higher.
Richard Berry, founder of the Good Money Guide, says: 'It’s time that the platforms took a long hard look at the material they’re allowing online, as too often they are being used as a hunting ground by scammers preying on the unwary.
'Criminals often go to great lengths to make their scams look credible, sometimes even "cloning" legitimate investment platforms. These will typically look almost identical to the real thing, apart from a small difference in the URL.
'Needless to say, when unsuspecting investors deposit funds on one of these fake websites, they never see them again.'
Social media sites must tackle fraud
After two years of Which? campaigning, the Online Safety Bill became law in October 2023, marking a major step towards a safer internet for UK consumers.
Under this new legislation, platforms such as Facebook, Google and Instagram will be legally obligated to remove harmful content, which includes scams.
Which? is calling on Ofcom to develop codes of practice that will hold platforms to a high standard and be prepared to take strong enforcement action, including fines, if they break the law.
- Find out more: new online safety laws to tackle fraud
How to avoid investment scams
Scammers often target victims on social media using fake ads, bogus celebrity endorsements, and by sending direct messages about ‘get rich quick’ schemes. They may set up convincing websites and social media profiles featuring dodgy reviews and slick brochures to appear legitimate.
If you see an ad for an investment online or receive an unsolicited offer directly, follow our five tips to avoid being scammed.
- Ignore unexpected offers. Opportunities that appear out of the blue, whether via a cold call, online ad or through the post, are likely to be either very high-risk or an outright scam. Even if you initiated the contact yourself, don't assume you're dealing with a legitimate firm.
- Check the FCA warning list. This can be found at www.fca.org.uk/scamsmart/warning-list. It's where the regulator records details of firms it knows are operating without permission or running scams. Even if a firm isn't on the list, this doesn't mean it's not a scam.
- Check the Financial Services Register. This can be found at www.fca.org.uk/register. It will help you to see if you're dealing with a genuine, authorised firm. Access the register via the FCA's website, rather than via an email link or the website of a firm you've been dealing with. Check the firm's permissions match the service you're being offered and only use the contact details listed on the register, not the ones you're given. If there are no contact details on the register or the firm claims they're out of date, call the FCA on 0800 111 6768.
- Consider getting independent financial advice or guidance. A financial adviser can recommend specific investments to you based on your situation and goals. They must be regulated by the FCA. For more general information about your investment options, you can use free guidance services, such as the Money Advice Service.
- Be careful with your personal data. Avoid entering contact details on unknown sites, particularly those advertising on search engines and social media, as you risk being targeted by scammers.
