Scam adverts still rife on Facebook and Instagram

Fraud victims lost more than £45,000 on average to ‘clone’ firm investment scams according to Action Fraud. Photo: PA

Paid-for scam advertising is thriving across social media with risky investment adverts putting UK consumers of risk of fraud.

The most common (25%) investment products advertised were property related, while one in five (22%) were for cryptoassets ⁠— both cryptocurrencies and NFTs, according to consumer group Which?

In most cases, both of these products will be unregulated. One in 10 (12%) investment products advertised were unclear ⁠— they offered high returns without clarifying how those returns would be obtained.

Which? also found a small number of adverts for binary options, a form of trading banned in the UK since 2019. The FCA has previously warned that any firm offering binary options services is probably unauthorised or a scam.

The consumer body’s analysis identified 89 adverts with three or more red flags, such as a no risk warning or a claim that returns are guaranteed, amongst others, of which 23 had five or more red flags.

Read more: Bitcoin price rises but FTX collapse still haunts solana

Potentially misleading adverts often promised massive, risk-free and speedy returns, playing on consumers’ fears of missing out on opportunities, Which? warned.

One collection of adverts highlighted how repeat offenders persistently post dodgy adverts on Meta (META) owned Facebook and Instagram.

The adverts focused on a piece of software called “Tesler” and there were multiple indications that they were probably scams.

Twenty adverts for Tesler identified by the research each raised eight separate serious risk flags. Which? also found similar adverts were scattered throughout the data it analysed.

The Financial Conduct Authority has previously issued a warning about a scam investment company using the brand name Tesler and impersonating a regulated trading company based in the UK.

The use of the name Tesler, with its similarities to automotive brand Tesla (TSLA), and other language used may be reinforcing this potentially misleading reference to attempt to draw in victims.

Read more: Car insurance cost rises 2% to £436 on average

Rocio Concha, Which? director of policy and advocacy, said: “It is extremely worrying that misleading and potentially fraudulent investment adverts are still being shown to Facebook and Instagram users, putting consumers at risk of immense financial and emotional harm.

“If a consumer group and another charity can design algorithms and uncover these adverts then tech giants should be able to create effective systems to do the same job on a bigger scale.”

When a Which? researcher clicked on a Tesler ad, they were prompted to enter their contact details. Within less than an hour, they were called by a representative and pressured to set up a trading account amid claims that its “sophisticated algorithm…plays the trade with an 87% success rate”. Together, these factors, and others, suggest that these Tesler adverts are likely to be a scam.

Which? warned that these red flags could mean consumers are led into making poor and risky investment choices or in the worst cases becoming fraud victims ⁠— who lose more than £45,000 on average to “clone” firm investment scams according to Action Fraud.

The consumer body is calling on the government to strengthen legislation so that scammers are barred from advertising in the first place.

“The government must take a crucial step in the fight against fraud by ensuring the Online Safety Bill is passed into law without further delays. Otherwise we could be waiting even longer for alternative action to tackle online fraud infiltrating the world’s biggest search engines and social media sites,” Concha added.