Fake celebrity endorsement scams on the rise
IT SEEMS like Australia has hit peak Royal family fever, but our passion for celebrities has the potential to do serious damage to our hip pocket.
According to the Australian Competition and Consumer Commission (ACCC), Australians are increasingly being caught out by fake celebrity endorsement scams, with complaints to the ACCC's Scamwatch website rising 400 percent this year.
More worrying, the financial losses reported by consumers who have been caught up in these sham celebrity endorsements have risen 3800 per cent so far in 2018.
You may come across these sorts of scams through online advertisements or promotional stories shared on social media. They typically feature fake quotes or doctored or out-of-context images of celebrities promoting anything from weight loss pills to investment schemes.
You'd think in these social media driven days that younger Australians would be most vulnerable. But it turns out people aged 45 and older account for 63 per cent of money lost to celebrity scams.
Most people have lost relatively small sums - between $100 and $500. But some victims have been left more than $50,000 out of pocket with investment schemes that have involved bogus celebrity endorsements.
Like most scams, the crims behind the latest round of money-spinners are highly sophisticated. The problem for ordinary Australians is that it is very difficult to pick fake ads or websites from the real thing.
I suspect most of us are aware that Prince Harry's image won't be used to flog dodgy products any time soon. That hasn't stopped scammers using other household names to ply their trade. According to Scamwatch, crooks have faked endorsements using celebrities like Cate Blanchett, Nicole Kidman and Steve Baxter of Shark Tank fame.
As the ACCC have noted, it would help if some of the world's biggest tech giants like Google, Facebook and Instagram came on board to crackdown on these fake ads. In the meantime it pays for all of us to maintain a healthy degree of skepticism.
If you are caught up in one of these scams, call your bank immediately to try and arrange a chargeback and stop any further debits to your credit card, bank account or whatever source of funds you have provided.
When it comes to any investments you may see promoted, check that the product stands on its own merit. That means having a track record of reasonable long term returns and low fees. In my book, no quality investment needs the backing of a Hollywood heavyweight to flog its benefits.
Paul Clitheroe is Chairman of InvestSMART, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.