Three Tell-Tale Signs To Spot a Get-Rich-Quick Social Media Scam
Maybe it’s a sign of the current economic times, but the number of get-rich-quick schemes out there has seemingly spiraled out of control. Even if you’re not looking for financial advice, it’s almost impossible to avoid all the get-rich-quick scams on social media.
In a recent survey, 31% of respondents said they followed financial tips seen on social media, and 55% of them said they ended up losing money as a result.
Back in the old days, we used to call them scammers, scam artists, and snake oil salesmen. Now we just call them “influencers.” Of course, they always tell you, “This is not financial advice. This is for entertainment purposes only. Do your own research.” But, within seconds, they are willing to tell you how you can double, triple, or quadruple your money, doing little or no work. So, with that in mind, here are 3 tell-tale signs to spot a get-rich-quick social media scam.
Unrealistic promises
Many of the get-rich-quick schemes prey on the financial naivete of young social media users. It’s easy to convince them that “the rules have changed” and that “everything your parents told you is no longer true.” So, typical schemes promise guaranteed returns, or fantastically high returns. They claim you can make money without taking any risk at all.
That’s simply not true. A fundamental principle in finance is that there is always a trade-off between risk and reward. The higher the potential reward, the higher the potential risk. Or, as they like to say on Wall Street, “There’s no such thing as a free lunch.” So be careful of anyone promising that you can make $10,000 per month, working just a few hours, without taking any risk at all. All you need to do is sign up for a free course or free training that they are all too willing to provide.
Fake trappings of wealthy influencers
Secondly, if a social media promotion features all the stereotypical trappings of a wealthy lifestyle, run away immediately. Guys in flashy sports cars, girls lounging around at exotic resorts, all promising that “this, too, can be yours, if you follow my simple advice.” Even worse is when these influencers claim to be showing you all the checks they’ve cashed, or all the account statements proving that they have a certain amount of money in their bank account.
Unfortunately, all this can be faked. It’s just a digital media version of what used to happen years ago, when it was just more obvious. Remember when people would look for ways to rent very expensive European sports cars for their high school or college reunions, in order to look like “they’ve made it” in front of their peers? Today, the problem is even worse, because a manufactured bot army can help to reinforce the clout of a fake influencer.
A sense of urgency
And, finally, if a social media scheme tells you that “this unique offer is only available for a limited time,” then it’s time to close down your laptop or power off your mobile device. This is one of the oldest tricks in the book: creating a sense of time urgency.
These influencers know that, if you spend any time at all considering the pros and cons of the new financial opportunity, that you will probably reject it. They don’t want you thinking with the rational, logical side of your brain. They want you to respond with pure emotion. They want you to experience FOMO, better known as the Fear of Missing Out. You don’t want all your friends to get rich, while you miss out, do you?
Help when help’s needed
The good news is that there are some good people out there, helping people avoid these classic mistakes. The Financial Conduct Authority (FCA), for example, provides some good advice for anyone wondering about the legitimacy of a get-rich-quick offer. Ultimately, it comes down to the type of advice that your parents or grandparents probably gave you, “If it’s too good to be true, it probably is.”