Consumer advice center warns of investment fraud in WhatsApp groups

Fraudsters are trying to get their hands on potential victims' money in WhatsApp groups. The North Rhine-Westphalia consumer advice center is currently warning against this. This is investment fraud.

In its warning, the consumer advice center states that it has received numerous reports from victims. According to these reports, they were lured into supposedly lucrative investments via WhatsApp groups. In the chats, they are asked to purchase certain cryptocurrencies or trade them on online trading platforms, or to buy certain financial products. The victims lose much or all of the money invested instead of reaping the promised profits.

Misuse of well-known brand names

The fraudsters misuse well-known brand names in WhatsApp groups, such as those of well-known financial companies, stock market and financial experts, celebrities or politicians. The perpetrators use this to lure victims into the WhatsApp groups, explains the consumer advice center. They are lured in with attractive stories: a celebrity has had great success with a certain investment model, for example, or a supposed stock market expert explains why a certain share should be bought now. The misused names have nothing to do with the WhatsApp group and the offers advertised there. Those affected are usually not even able to understand who is actually behind the WhatsApp groups and making the dubious recommendations.

The scammers use other psychological tricks. For example, they suggest grouping members that they belong to an exclusive group with only a limited number of members. They could consider themselves lucky to have been selected. If the members follow the instructions of the alleged experts, they can expect high profits. According to the findings of the consumer advice center, the groups are supervised by an assistant, and there is a regular exchange over days and weeks. They answer questions and present the supposed investment model in more detail, and there are even training courses and workshops on the subject.

Specific scams

The scams use different vehicles to take the victims' money. For example, dubious trading platforms on which victims are sometimes even shown small profits at first, so that they transfer larger sums – which are then not invested but end up with the fraudsters. Another variant encourages victims to invest money in a stablecoin on a reputable crypto exchange – and then transfer it to a wallet belonging to the fraudsters, which also means the money is lost.

A third scam entices interested parties to buy pre-IPO shares that are not listed on any stock exchange. Victims are asked to transfer money to IBANs, usually abroad, and receive a supposed certificate of share purchase. In most cases, however, these shares do not exist at all. The last scam cited by the consumer advice center is the purchase of shares via the victim's own broker. The shares allegedly offer high potential returns. These are often penny stocks that the scammers have previously bought themselves and then advertise in the WhatsApp group to cause a kind of "price explosion", after which they sell the shares again. The victims are unable to sell their shares in time and incur considerable losses as a result.

For their protection, consumers should be wary of unsolicited contact from strangers. High promises of returns are a warning signal, adds the consumer advice center. Those affected should not make transfers to unknown bank details and IBANs, even if the other party claims that everything is in the victim's name. The same applies to cryptocurrencies, which should not be transferred to unknown crypto wallets. Anyone who falls victim to such a scam should report it to the police. The German Federal Financial Supervisory Authority (BaFin) warns against specific WhatsApp groups and fraudulent websites.

At the beginning of the month, WhatsApp introduced a warning for group chat invitations. This is intended to help expose and prevent such scams.

(dmk)