Celebrity scams: how fraudsters use famous faces

A fake celebrity endorsement ad catches out this NZ woman, but quick thinking saves her from bigger loss   

Online financial scammers use a range of techniques and tricks to snare victims into their frauds, from phony rates comparison sites to bogus social media profiles.  

One way that's becoming more common is the use of fake online news stories, usually featuring a famous person to attract attention. Posing as content from legitimate news sites, the item (actually a paid advertisement) will usually present some kind of money-making tip or trick, and include a link to what claims to be a crypto or forex trading platform. 

And that's exactly how one New Zealand woman was conned out of $420 – before realising she was caught up in a scam and pulling out before even more harm could be done.    

Jane* was recently back in New Zealand after time spent living overseas. Hunting for a new job in a tough market and thinking more seriously about investing for her retirement, a news story on Facebook caught her eye.    

"A Facebook ad caught my eye – it had an item about Jacinda Ardern and her husband Clarke Gayford, it had a byline and I think a screenshot I wonder what's that all about? And then clicked on it to read it," she said.  

She followed the link, which took her to an advertisement for a crypto trading site. She checked out the company and its website – it seemed to represent a legitimate broking firm. She joined up, depositing $420 via her credit card.    

"I read through the article – maybe I skimmed it all too quickly, I didn't really register the figures being quoted, there was no real context for them – but it did talk about the returns and how they'd made money - there were many red flags now that I think about it, but hindsight is a wonderful thing!" 

Jane later got two phone calls from the company she'd given the money to, asking personal questions about age, occupation, what kind of investing she might be interested in. Wary of giving too much information away, she refused to answer most of their queries.  

She got a later call from the company helping explain how its "fully automated" trading system worked and was told to expect weekly phone calls from them.  

After realising that these promised phone calls weren't happening, Jane started to do a bit more digging. She'd also sent the link to one of her sons – suggesting he too might be interested in crypto investing.  

"Afterwards I was checking up some more and texting with a family member about the company and we came to realise that this was a scam. Subsequently I found confirmation on your (FMA) website." 

"I contacted the bank and cancelled my card – they couldn't get any more of my money – but looking on their website and there was an option you could use to get your money back, a withdrawal facility for crypto – but the drop-down box was empty." 

Asked for any tips that might help other potential investors avoid the scams like these, Jane says she realises she hadn't read the original news article or information carefully enough, missing, in her view - some obvious red flags. 

"I should have read it more carefully, there were red flags like rates being quoted out of context – some of it was too good to be true.  

They were pretty unrealistic returns, but one of the big things is that I'm not sure any genuine investment opportunity would have the same ‘countdown' and apply pressure in the way this did."  

"The offer flashed up tactics to try and get her to invest: ‘Just 10 slots left! – 20 slots left! – it was really pressuring me to make the decision now" 

While Jane did invest her money in the belief that it was a speculative venture, with the potential to go up or down – she certainly wasn't prepared to have her money stolen and the fear of knowing that criminals have her credit card details.  

But her quick thinking when suspicions started building, checking in with family and reviewing the FMA's warnings and alerts undoubtedly saved her from even more harm and financial loss. 

ENDS  

(*name changed for privacy)