Social media have led to a sharp rise in consumer troubles due to being invited to buy financial products and services by people claiming to be celebrities or to be connected with them
Social media have led to a sharp rise in consumer troubles due to being invited to invest money by people claiming to be celebrities or to be connected with them. Tempted into investing by invitations making claims like "An investment seminar by Celebrity X," "Celebrity Y will teach you investment know-how," and "Make money through friends of Celebrity Z," people are going ahead and transferring their money, only to fall victim to problems like "I was told I couldn't withdraw my money unless I paid an extra fee" and "The other party became impossible to contact."
People are consulting consumer affairs centers and the like nationwide for advice over problems like these, and the number of cases has skyrocketed, with 9.6 times more than in FY 2022 (Figure). The average purchased amount is also going up. Advertising on social media has prompted a surge in invitations to join investment groups, and a characteristic of them is that once you transfer your money, it is very difficult to recover any losses. In order to prevent similar troubles, we will share some examples of actual consultations, and alert consumers to the dangers.
Figure. Changes in number of consultations on PIO-NET1 regarding "consumer troubles due to being invited via social media to buy financial products and services by people claiming to be celebrities or to be connected with them,"2 and in average contract purchase amount
This is a graph of the changes in number of consultations regarding "troubles due to being invited via social media to buy financial products and services by people claiming to be celebrities or to be connected with them," and in average contract purchase amount, from FY 2021 to April 30, FY 2024. Following it, there is some text explaining the details.
The numbers of consultations by fiscal year are as follows: 52 in FY 2021, 170 in FY 2022, 1,629 in FY 2023, and 84 in FY 2024 up to April 30.
The average contract purchase amounts by year are as follows: 4.36 million yen in FY 2021, 2.34 million yen in FY 2022, and 6.87 million yen in FY 2023.
- 1 Inquiries referred to NCAC are not included. The numbers of consultations, etc. stated in this document are the numbers registered on PIO-NET up to April 30, 2024 (n = 1,935).
- 2 The data on financial products and services brought about by social media considered in this document have been compiled by looking at consultations about ones offered by people who claim to be or otherwise impersonate celebrities, or suggest they are connected with them. Also, the scope is not just limited to celebrities, but also includes consultations involving claims to be famous commentators, academics, investors, or analysts, or to be their assistants, apprentices, relatives, or other people related to them.
Examples of consultations
After attending an investment consultation session by a famous economics commentator, I received a stream of recommendations to invest from people claiming to be assistants of his, and transferred a total of 15 million yen as a result. However, now, I can't withdraw my money.
Just as I was thinking about getting into investing using assets I inherited from my mother, an ad appeared on social media for an investment consultation session organized by a famous economics commentator, including a testimonial where someone had had a million yen turn into 100 million. Interested, I registered an account with the message app. Then, I received a message from someone claiming to be the famous economics commentator's assistant, and saying that some overseas shares were going to have a short-term rise in value. Thinking I could trust a tip if it was from the famous economics commentator, I transferred a million yen. Not long after, I got a message saying that a million yen would only yield a small profit, so I should transfer a million more. So, I transferred the extra, to a different bank account.
A week later, I got a message saying there were more profitable investments I could be making, so I should send a message to the economics commentator. As a result, I made transfers of 7.5 million and 0.5 million yen to different bank accounts. Another two weeks later, I was told about yet another short-term investment opportunity, and made two transfers of 2.5 million yen-so, 5 million yen in total-to a new designated account.
Later on, when I checked to see how my investments were doing, I found I'd made a profit of 60 million yen, so I said I wanted to withdraw my money. The reply I got was that I wouldn't be able to unless I paid a withdrawal fee of 9 million yen, plus 13 million yen in taxes to the overseas stock markets operating the investments.
(Received in January 2024 from a woman in her 60s)
In addition, we have also received consultations like the following:
- They claimed that a famous investor was going to share his know-how, but not only was that person not even involved, but the investment amount was just decided for me without my say so, and I even got charged a penalty for breach of contract.
- I started doing forex trading after it was recommended to me by a famous investor's niece who said she knew an investor who never lost and had also made money by investing through them herself. However, not long after, she became impossible to contact.
Advice for consumers
- If you receive any invitations like this on social media, first of all, be suspicious.
- If you are told to transfer your investment money to an account that is in an individual person's name, then it is a scam. Do not transfer any money.
- You should refrain from transferring money for investments lightly, because it will be difficult to recover any losses.
- If you have any trouble or concerns, consult your local consumer affairs center.