The Washington, D.C., Department of Insurance, Securities and Banking is advising consumers to be mindful of con artists who lurk in the virtual shadows in online social networking sites.
People should make sure they know who they are doing business with when considering investments pitched through “friends,” “followers,” or “fans” on social networking sites, regulators said on Oct. 19.
“Just because someone has ‘friended’ you online does not mean that person is your friend when it comes to investing,” Department Commissioner William White warned.
“The person behind the profile may be deliberately mimicking your likes and interests to lure you into a scam.”
Con artists have been using “affinity fraud” schemes for years. They target victims through traditional offline social networks, such as community service groups, professional associations or faith-based organizations.
Scammers infiltrate groups of individuals connected through common interests, hobbies, lifestyles, professions or faith to establish strong bonds through face-to-face contact and sharing of personal interests before launching their schemes.
These affinity fraud schemes are increasingly moving into social networking.
Con Artists Move Into Social Networking
Regulators said the rising popularity of websites such as Facebook, Twitter and other online social networks and communities has made it easier for con artists to quickly establish trust and credibility. “Crooks peddling scams increasingly are logging on to find investors and their money,” the commissioner said.
Online social networking sites enable scammers to gain access to potential victims through their online profiles, which may contain sensitive personal information such as their dates or places of birth, phone numbers, home addresses, religious and political views, employment histories, and even personal photographs.
“A con artist can take advantage of how easily people share background and personal information online by using this information to make a highly targeted pitch to ‘friends’ within that social group,” according to the commissioner.