Key Takeaways to Protect Yourself from Social Media Influencer Scams –
- Know the difference between a scammer, grifter and bad business person.
- Look for qualifications and credentials before seeking financial expertise or services from a social media “financial coach” or influencer.
- Beware of influencers who hinge on spiritual or emotional tactics to persuade you to purchase their course, product or service.
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With the growing influence of Fintok and “financial coaches,” a troubling trend is emerging – social media influencer scams.
These scams come in various forms, such as Ponzi schemes and fraudulent loan applications, all strategically crafted to exploit innocent individuals and leave them in financial ruin.
To protect your finances, it’s essential to distinguish between a scammer, a grifter, a bad businessperson and a qualified financial advisor.
By being aware of the differences and knowing what to look for, you can protect yourself from falling victim to these scams and safeguard your financial well-being.
What is a Scammer?
Scammers use dishonest means to obtain money or valuables from unsuspecting victims, often through false promises, lies, and deception.
Common scams include phishing scams, pyramid schemes, fake job offers, charity scams, and more.
While you’ve likely learned about infamous, large-scale scams, such as Bernie Madoff’s investment pyramid scheme, more recent scams include –
- Social Media Influencers’ pump and pump scheme,
- Boston realtor rent deposit scam, and
- Jay Mazini wire fraud and money laundering.
Each of these scammers used social media to gain their victims’ trust before swindling them out of thousands of dollars.
There is a special term for this type of scammer…
What is a Grifter?
Grifters are a type of scammer who uses charm, persuasion, and manipulation to gain the confidence of others and swindle them out of money or valuables.
Grifters are often skilled at making themselves appear trustworthy and reliable, even though their intentions are deceitful.
One of the most famous grifters in recent history is Anna Dulvey, a Soviet Union woman who posed as a German heiress to infiltrate New York socialite circles and swindled money from people, hotels and financial institutions.
Similar to Anna Dulvey, grifters rely on their targets’ emotions, vulnerability, and lack of knowledge to achieve their goals, often targeting wealthy individuals, businesses, or others who are susceptible to being conned.
Good Salesperson, Bad Businessperson
Many of your favorite financial influencers are great salespeople.
They have catchy video hooks, great content production and know how to connect with their target audience.
Yet, many of these individuals lack the necessary qualifications and knowledge to run a quality business.
Are they scammers?
No.
These gifted salespeople are different from scammers or hustlers as they don’t seek to defraud their customers; rather, they genuinely believe in their products or services.
They just have bad systems, bad accounting, poor financial management and lack other business skills to properly deliver the products or services they are selling.
Instead of reporting these businesspeople to a government agency, you can leave them a constructive business review, never work with them again or give them grace as they build the systems they need to properly deliver their product or service.
Influencer Scams and the Black Community
While scammers have targeted people from all backgrounds, races and creeds, it is important to know that scammers have destructively attacked the Black community for decades with various schemes and tactics.
Remember the Tuskegee Experiment?
If Tuskegee wasn’t traumatic enough, during the civil rights movement of the 1960s, scammers targeted Black families with promises of affordable housing and home ownership opportunities, only to leave them with high-interest loans or even foreclosed homes.
Today, social media scammers use a range of tactics, including “mortgage elimination” scams, credit repair scams, and “get-rich-quick” schemes, to target the Black community.
Members or allies of the Black Community should hold extra caution before engaging in any business transaction with a financial influencer.
6 Ways to Protect Your Finances and Identify Social Media Influencer Scams
If you’re someone who follows Fintok influencers or financial coaches on social media, you may be at a higher risk of falling prey to influencer scams.
These influencers have already gained your trust and have tapped into your financial desires and needs.
Here are six critical ways to protect your finances from social media influencer scams:
1. Look for qualifications and credentials
Before investing your money or seeking financial advice, make sure the person or company you are dealing with is qualified and licensed to provide those services.
For instance, if an influencer advertises themselves as “the greatest investor of all time” but has –
- no work history on LinkedIn,
- no qualified investment credentials or licenses,
- no confirmation of net worth or investment portfolio,
- and no backing from other leading investors in the investment management industry…
You should absolutely question their authority on investment advice.
Even moreso, if an influencer is a licensed financial professional, their advice should align with their area of licensure.
So, tax advice should come from a tax Tax Attorney, Enrolled Agent or CPA. Real Estate advice should come from a licensed realtor or mortgage lender. Investment advice should come from a Certified Financial Analyst or Registered Investment Advisor…you get the point.
And, you can take your due diligence a step further by verifying a financial professional’s license with the issuing organization.
For example, you can verify a Certified Public Accountant’s license status by searching their name under their state’s regulatory accounting agency.
2. Ask for a reference or second opinion from a qualified source
Don’t be afraid to ask for references or seek out a second opinion before making any financial decisions.
But, don’t just ask anyone for a second opinion.
If you are looking to work with a real estate wholesaler, ask a licensed real estate agent or mortgage lender for a second opinion.
If you are looking to apply for an advertised Tax Credit, ask an experienced and licensed tax professional before sending in your application.
Doing so can help you avoid falling victim to fraudulent schemes and prevent you from making costly mistakes.
3. Look out for sales tactics that hinge on your emotions
“For the culture”
Scammers who target specific communities know what language to use to garner that community’s trust.
For instance, scammers who target the black community might use a saying like “for the culture” in their sales communication.
Sometimes, this cultural connection can be an emotional tactic to prey on the Black American experience.
As mentioned earlier, scammers have targeted the Black community for decades.
Consequently, some members of the Black community struggle to find trustworthy financial knowledge and services.
So, when a financial service is provided “for the culture,” it is implied that, unlike other service providers who have served as financial gatekeepers, their services provide access to knowledge formerly kept from the black community .
Consumers might find themselves drawn into social media influencer scams because the sales tactic psychologically appeals to their emotional and cultural experience.
Other tactics
But, cultural terms aren’t the only tactics used to hinge on consumer emotions. Other questionable sales tactics a scammer might use to hinge on emotions include:
- Telling you how to get business funding “quick,”
- Attaching their validity to scripture or moral values,
- Attaching their product or service to generational wealth, or
- Showing off a luxury lifestyle
Before buying an influencer’s product or service, ask yourself, “What evidence or qualifications does this influencer have to support their expertise in this particular area?”
4. Pay attention to self-promotion
Pay attention to influencers who self-proclaim themselves as experts or a top authority for a financial service.
Just because the influencer has a lot of followers or celebrity collaborations, does not mean they are qualified in their area of influence.
Remember when Jay Mazini teamed up with 50 Cent to give away thousands of dollars to Burger King employees, only to get arrested for money laundering shortly after?
If Bloomberg, the AICPA, National Association of Black Accountants (NABA) or some other credible organization wants to call an influencer a financial expert or authority, then great.
The leadership of these organizations often has the technical expertise to weed out unqualified businesspeople.
But, if a businessperson is self-proclaimed or only receives accolades from within their influencer circle, it might be wise to do a bit more research before conducting any business transactions.
You might also want to study their content for any signs of maladaptive narcissism or power seeking. Influencers with these traits can pull victims into their fraudulent schemes via manipulation.
5. Protect your financial information
Protecting your financial information goes beyond having secure passwords and never sharing personal details with unverified sources.
Let’s explore how to maintain security standards while ensuring a successful and transparent business transaction.
Business Agreements are Paramount:
A legitimate transaction should involve a clear and formal business agreement that outlines the terms, costs, and payment methods.
Ensure you have a well-defined contract that protects both parties and their financial interests.
For large or long-term contracts, consider hiring an attorney to review the terms and conditions.
Beware of Under-the-Table Transactions:
Transparency is essential in any business arrangement. If you sense that transactions are being conducted “under the table” or without clear documentation, it’s a red flag.
Consider seeking legal counsel to protect your financial information and avoid potential pitfalls.
Research and Verify:
Before entering any payment site, make sure it’s trustworthy.
For instance, if the business takes payment via PayPal, you want to make sure you are sending money through PayPal.com not PayPai.com.
Did you catch the difference?
One letter can determine whether you are paying a valid site or a scammer.
Stick to Official Communication Channels:
Avoid discussing sensitive financial matters through casual communication channels or social media.
Stick to official and secure channels of communication to protect your data from prying eyes.
Trust Your Instincts:
If something feels off or if you sense pressure to divulge financial information, trust your instincts.
A legitimate business transaction should never put you in an uncomfortable or compromising position.
6. Trust God, not the Influencer
There has been a disturbing trend of spiritual influencers who use their religious beliefs to manipulate their followers. By skillfully blending persuasive storytelling with biblical references, these influencers create an illusion that the product or service they endorse aligns with their faith’s values.
Check out “How to Spot Spiritual Influencers Scams and Hustles” for helpful warnings on how to fall for these types of influencer scams.
Social Media Influencer Scams: Conclusion
If you happen to catch a scammer and have qualified evidence to confirm their fraud, contact your state’s regulatory agency to report them. Make sure to warn others to prevent future victims.
Don’t let scammers and grifters take advantage of you – by applying these six critical lessons and staying informed about the latest scams and frauds, you can keep your finances safe and secure..
Disclaimer:
The information provided on this blog is for educational and informational purposes only. While every effort has been made to ensure the accuracy and reliability of the content, we do not make any representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the information.
Please note that the financial advice and information presented on this blog are not personalized to your specific financial circumstances. It is essential to consult with a qualified professional, such as a financial advisor or accountant, before making any financial decisions or taking any actions based on the information provided here.
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