It is a fact that U.S. retail investors are increasingly turning to social media, including Facebook,YouTube,Twitter, LinkedIn and other online networks for information about investing. Whether it be for research on particular stocks, background information on a broker-dealer or investment adviser, guidance on an overall investing strategy, up-to-date news, or to simply discuss the markets with others, social media has become a key tool for U.S. investors.
While social media can provide many benefits for investors, it also presents opportunities for fraudsters. Social media, and the Internet generally, offer a number of attributes criminals find attractive. For example, social media lets fraudsters contact many different people at a relatively low cost. It is also easy to create a site, account, email, direct message, or webpage that looks and feels legitimate – and that feeling of legitimacy gives criminals a better chance to convince you to send them your money. Finally, it can be difficult to track down the true account holders that use social media. This anonymity makes it harder for fraudsters to be held accountable. Therefore, it goes without saying that investors need to use caution when using social media when considering an investment.
Here are some easy to follow tips to help you avoid online fraud: