Net closing on web scamsters
As the authorities warn against Crowd1, the role of social media in promoting pyramid schemes and shady scams is coming under increased scrutiny
Dozens of global brands have suspended advertising on Facebook in an effort to pressure the social media platform to address hate speech (see page 15) — and the boycott is expanding to other platforms, too.
Over the weekend Starbucks announced it has suspended advertising on some social media platforms amid such concerns, joining international brands such as Coca-Cola, Diageo and Unilever.
Facebook has long been criticised for its failure to moderate content, and has been accused of being instrumental in securing Donald Trump the White House four years ago.
Among social media platforms, Facebook especially stands accused of not doing enough to stop hate speech and the spread of disinformation. In addition to its failure to manage political misinformation, the platform is also accused of allowing scamsters to advertise their wares without compunction.
In the UK, Facebook has a facility that allows suspect ads to be reported to a central investigation office at the company for possible removal — but it’s not available anywhere else in the world.
Crooks are always keen to separate you and your money. Now get-rich-quick scamsters are preying on the desperate and the greedy in the midst of the most serious economic crisis in living memory. To do so, they’re using social media to promote their offerings, and there’s little sign that the global platforms carrying their messages have any intention of shutting them down.
It used to be that you had to don a balaclava and take a firearm into a bank branch to get a bag of cash. But as financial institutions have tightened security, that’s become harder to do.
Of course, if you can’t be bothered to rob a bank, you could just steal an entire bank — if the VBS Mutual Bank docket is to be believed. It seems all you need is a broad conspiracy of individuals with lots of authority and sufficient belief that they won’t be held to account, and you can help yourself to the deposits of a country’s most needy.
Alternatively, you could just get people to give you their money in the guise of "an investment". The odds of ever being held to account here are slim. After all, when the scheme fails, many of the people you caught out will be too embarrassed to admit they were swindled. Besides, building a case against perpetrators who hide their digital footprints is increasingly hard to do.
I can plot, almost to the day — following an ad appearing on Facebook — when the e-mails will arrive in my inbox asking whether I have seen the latest "investment opportunity", and asking if it’s a scam or not.
Is it a pyramid scheme, I’m asked.
The short answer: if it’s being punted on social media and has no visible means of income beyond a requirement that you, too, sign up new members, then it probably is.
Typically, these sorts of schemes require each new member to sign up half a dozen more, until everyone who is going to be taken in has been signed up and there is no fresh fodder. Then the scheme predictably collapses in on itself — but not before the person at the top has harvested enormous returns for themselves.
Last week, the Financial Sector Conduct Authority cautioned against investing in Crowd1. I won’t waste time on the details here other than to say: if it looks like a pyramid and is shaped like a pyramid, odds are it sphinx to high heaven (yes, I know, I just did that).
Dodgy ads for unsavoury services used to appear in newspaper classifieds. Today, for a fraction of the cost, they are found on social media sites. Clearly they must work, because there are plenty of them, and they keep on coming. And platform owners are doing nothing to stop them.
The UK is the only country that has forced Facebook to put a button on its pages allowing users to report ads they believe to be scams. Facebook introduced the feature, and promised to support it with a specially trained team that reviews and takes down dodgy posts. This was in response to a campaign by financial educator Martin Lewis, whose image had been used to promote fraudulent investments on the platform.
Facebook in SA has declined to comment on why the feature cannot be rolled out here — or, indeed, anywhere else in the world.
The idea that Facebook would deliberately take down paid-for advertising may sound as logical as an annual turkey convention to ratify Christmas each year, but the company is under pressure over its content policies, and is facing a growing boycott from high-profile companies.
Beside the direct reputational risk of still being seen on Facebook, the fact that a growing percentage of the ads on the site are questionable means legitimate brands realise putting their corporate colours anywhere near it makes them look bad too.
Facebook needs to act, if not to do the right thing, then to save itself from long-term harm.
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