How to keep your money safe from WhatsApp scams and Deepfakes

All investors know that putting money in the stock market comes with risk attached. Over the long term your investments will tend to rise, but along the way they’ll go up or down. However, there is a risk many of us don’t consider very often, and that’s the possibility of falling prey to an investment scam.

Unfortunately, scamming has become a whole industry, to such an extent there are now several TV shows like the BBC’s Scam Interceptors that seek to raise awareness of scam tactics. Scammers stole £11.4 billion from UK individuals last year, according to the Global Anti-Scam Alliance, up £4 billion on the previous year. Many of us have gotten used to hanging up on cold calls, and ignoring annoying texts from weird email addresses that tell us a parcel is waiting for us. But there are two new digital strategies being used by scammers that are less well recognised, but which are definitely worth being aware of.

How to spot a WhatsApp scam

WhatsApp has become a ubiquitous messaging service of choice for many people, offering a free and convenient way to stay in touch with friends and family. But scammers are increasingly using WhatsApp to try to defraud people of their money. These fraudsters often pose as senior members of well-known companies, including AJ Bell, contacting people with what appear to be exclusive investment opportunities.

After gaining your trust, scammers typically present high-return investment options, which are either entirely fictitious or misrepresented. You may be encouraged to act quickly, using pressure tactics that leave little time to think it through or check any details of the scheme. Eventually, the fraudsters will request personal information or financial transfers, claiming it’s necessary to secure the investment.

Another trick being used is to set up WhatsApp groups that recommend stocks to buy in your own investment account. This might sound harmless enough, but these are usually low value shares in small companies that are used in so-called ‘pump and dump’ schemes. Scammers artificially inflate a stock's price through false or misleading information or by getting other investors to buy up stock via WhatsApp, then sell off the shares they own at a profit before the price crashes. This type of scam was featured in the book and film The Wolf of Wall Street, but of course back in the 80s and 90s, Jordan Belfort and his team actually had to call people up one-by-one to get them to buy in. Modern scammers can instead target large groups of people with the same strategy via social media and WhatsApp.

How to spot a WhatsApp scam

WhatsApp isn’t the only technological advancement being used by scammers to steal money and information. As artificial intelligence (AI) technology becomes more affordable and widely available, scammers have begun exploiting it to create increasingly sophisticated and convincing videos, known as deepfakes. These deepfakes present a likeness, sometimes along with the voice, of well-known or trusted individuals to entice others to buy into the scam. MoneySavingExpert reckons the face of its founder, Martin Lewis, is used by scammers more than any other celebrity.

AI tools like these are transforming the landscape of cybercrime, allowing scammers to create a flood of realistic, manipulative content. While the technology is not perfect and may still show signs of inconsistency, it’s improving rapidly. Of course, social media platforms mean this kind of content can easily and quickly be spread to hit multiple targets at once. Even if 99% of people ignore it, with enough social media views scammers can still make money from the few who fall into the net.

How to stay safe from scams

While the increasing sophistication of scam tactics is worrying, there are concrete steps you can take to protect yourself.

1. If something feels even slightly wrong, stop and double-check. The key to avoiding scams is awareness and caution. These schemes are designed to catch you off guard, push you into rash decisions, and prey on your trust. Scammers often use high pressure tactics to force you to act by some fictitious deadline. Staying informed, verifying information and taking a moment to pause can make all the difference.
2. Be suspicious of unsolicited contact or unregulated offers on social media. Scams often start with communication out of the blue offering ‘help with’ or perhaps a ‘review of’ your pensions or investments. Social media is also an increasingly lucrative hunting ground for fraudsters. If someone you don’t know contacts you about your pension or investments - or indeed your finances in general - do not engage with them. If you believe someone is trying to scam you, report them to Action Fraud to help protect other investors.
3. Be extremely wary of anyone promising large, guaranteed returns or early access to your pension. Another tell-tale sign of a scam is the promise of huge, guaranteed investment returns, often over relatively short spaces of time. These investment ‘offers’ take many weird and wonderful forms, while the rise in popularity of cryptocurrencies has also been a fertile hunting ground for financial fraudsters. In addition, anyone claiming they can facilitate early access to your pension is almost certainly a fraudster.
4. Only deal with regulated companies and individual. Often unregulated ‘introducers’ are at the heart of scams, peddling unregulated investments. Where fraud occurs, it is usually connected with the sale of an unregulated investment. The assets that you are supposedly investing in may not even exist. Even where an unregulated investment is real, if you suffer losses through mis-selling you will not qualify for Financial Services Compensation Scheme protection worth up to £85,000.
5. Conduct due diligence. Scammers’ tactics have become more sophisticated in recent years, with ‘clone’ scams - where fraudsters impersonate a real firm to con you out of your cash. You can cross-check the phone number or email address provided by someone who contacts you with the FCA register to make sure they are who they say they are.

What about AJ Bell?

AJ Bell never initiates contact via WhatsApp and does not offer financial advice or stock tips through WhatsApp or any other platform. If in doubt, you can verify any unexpected communications by using contact details found on official websites, and to consult the Financial Conduct Authority’s register to confirm a firm’s legitimacy. Suspicious messages purporting to come from AJ Bell should be reported to both AJ Bell and WhatsApp to help prevent further scams.

If you’d like to know more about how to reduce the risk of falling prey to scams, or what AJ Bell does to protect its customers, please take a look at our security centre. The FCA’s ScamSmart website is another great resource to keep up-to-date on the latest tactics being deployed by fraudsters.