“Vigilance is always required when you deal with social media”.
By: Allan R Kirby
When it comes to personal finance, one of the biggest rules I advocate is to ensure that you be very vigilant when purchasing services or products on social media. There is always a chance that the person or company you are dealing with are not as you expected. People are, in fact, scammed regularly, especially when impulse buying or buying on the recommendation of a social influencer. For some people a simple mistake can add up to hundreds of dollars and a hard lesson learned but in other cases a few hundred dollars could have a real impact on a person’s finances. However, the cold reality is that someone is always looking to take your money and will do whatever it takes. Even if it is legal, it still might be unethical.
In another article of mine, I highlighted the need to for people to be vigilant when dealing with social influencers because:
They may provide Information that can be at times very superficial and lack detail.
They may present complex investing strategies and make you assume it’s easy to do and follow.
They may have never tried or spent the time understanding the products or services they are promoting.
There are so many other scams to be aware of, not just irresponsible Social Influencers. Unfortunately, what I am seeing today is more and more people falling victim to scams on-line not just from irresponsible social influencers but from others as well. There are so many scams out there I decided to just highlight a few which include:
1. Free Giveaways and Subscription traps
2. Fake products for sale, imitating brands such as (Gucci, Nike Louis Vuitton, Coach)
3. Quick money schemes
Remember if that sale is “too good to be true,” it probably is!
Free Giveaways and subscription traps
I would say just about everyone who is on the internet has either seen or been offered a 'low-cost' subscriptions or 'free' trial of a product or service. To many, this sounds great, getting something at a cheap price. Why not, we are all looking for deals. So you go ahead provide your credit card information and quickly scan or just check the Terms and Conditions, since it is all in fine print, long and overly complicated and boring to read. Plus, it’s only for a limited time only so you need to get that product/service now or you will miss the deal. Unfortunately, you may have locked yourself into a monthly subscription or end up paying hidden fees that you did not expect, which are almost impossible to stop, since you cannot phone or talk to someone.
However, do not take it from just me, there is a litany of stories of people who have been suckered into paying for things they either did not expect to pay for or want over the long term. One of the more common scams that I have read about focuses on Health foods, anti-aging products, weight pills and pharmaceutical, which tap into people’s insecurities and push great deals that are not really that great. Remember, it’s your money and you work hard to earn it. Unfortunately you sometimes need to work hard to ensure you don’t lose it to scammers
Fake Brands
Fake Brands are nothing new, this scam has been happening long before the internet. Unfortunately, it has become much more sophisticated today, encompassing in some cases industrial level output with actual factories .Recent research from Ghost data and Better business Bureau has shown that the global market for counterfeit goods has ballooned into a trillion dollar industry with athletic shoes being the most copied.
One reason for this is that athletic shoe collecting has become a serious business and just like any other similar business, collectors will be scammed into buying fake products at high prices. One issue I see is that many people willingly buy the knock offs, but for people who are duped and lose money, this is not acceptable. Plus it takes jobs and money away from legitimate companies and puts it into the hands of criminals. Now, I am not going to discuss ethics of buying fake brands today, the point is, when looking for good quality brand names, be very vigilant online. It is simple to put up a picture of the real thing, it just does not mean that is what you will receive in the mail.
Quick rich money schemes
There are too many different investments schemes out there on social media. It would really take an entire book just to lay them all out. The fact is that quick rich schemes are nothing new, however the new medium is now online, with a large impressionable generation Z and millennials to target. I am sure you have heard from someone who said they have found a friend or site that is promising special on time knowledge to of a secret investment that guarantees a huge payout in a short period of time. The great news is you just need to put down a little money, maybe a few hundred in cash and you can earn 5 to 10 times your investment. All you need to do is to send money via transfer or Bitcoin. This is a red flag to me and I have yet to respond to any offer that I have received by email or through my social media accounts. In fact, I have received a few offers on social media via direct messaging but upon some simple research I found them to be either a scam or the highlighted returns being grossly exaggerated and unlikely to occur. The point is, investing is not as easy as people make it out to be. Even people who strike it rich do have an element of luck behind them. If investing is easy we would all be rich. So always take what people say with a grain of salt. I will always stay clear of any investment management firm or person who flashes their expensive cars, watches and clothing on social media. I am the opposite, this does not impress me because the first thing I think is, wow, is that where my money going, to pay for his stuff?
Example of a scam: 'Loom' scam
Service Members Beware
One area of concern that I have with scams is the targeting of military personal. I recently highlighted the issues that military personal have with “For Profit” Colleges. Unfortunately this is not the only issue on which military personal are being targeted specifically, because of their military discounts. This is something that I enjoy even to this day as an ex-military civilian so I can appreciate the attraction to deals, and yes I could fall prey because I am used to such deals. But I believe you should never let your guard down even when you are inundated with so many good offers. There could be hidden fees or you could lose money This such a concern that the United States military has written about it, These social media scams target the military
Military scams on Instagram
If you see unrealistic sales on social media, just simply ignore the link!
Look, I can spend a great amount of time discussing all scams that are prevalent on social media, unfortunately, there is just so many. The main point I want to make is that you should never provide information or buy products or services impulsively without doing some real research. This is why many scammers try to keep the time limits short, they are designed this way to ensure that you will not take your time to do research. If you did, you will see the issues with the deals. Additionally, scammers are borderless, they will seek out victims from the UK to Canada and the USA. It does not matter where you live, you will be a target. Always remember to really check those products and services being offered and even listen to your inner voice. If you just do not feel right about something, don’t do it, even if your friends, especially online friends are pushing you to do so. It’s better to miss out on a deal than to end up broke. Your influencers and online friends will not be there to help you out.
Some additional information:
This is a MySmallBank.com blog written by Allan Kirby, who writes and produces Personal Finance articles and videos along with My Success Magazine.