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Financial fraud through celebrity endorsement is becoming a primary concern as one in six firms on the FCA warning list of unauthorised investment brokers is still running.
A disturbing trend of fake celebrity endorsements is on the rise; with the announcement in the Metro that one in six firms which are on the warning list of questionable unauthorised investment brokers from FCA (Financial Conduct Authority) are still accessible to online consumers. Moreover, many still utilise celebrity identities, with or without permission, to endorse the firm and establish authenticity.
The fraudsters frequently use well-known sportsmen, actors, and singers to lure victims into investing. They have often used the identity of players in Manchester United FC, business persons such as Sir Richard Branson and Deborah Meadon, and financial experts such as Martin Lewis in their brazen attempts.
The practice is very dangerous to the scam’s target who has been persuaded into a fake investment scheme and to the celebrity whose name has been used in the scam. High-profile individuals should investigate the organisation which invites them.
According to Joanna Bailey, the head of the Banking and financial fraud litigation department, “the use of celebrities’ images to endorse the fraudulent brokerages often lulls the novice investor into having confidence in the investments on offer. Victims genuinely believe that if an admired sportsman or businessman supports an investment scheme, that it must be sound and the firm is legitimate” Joanna further pointed out “the investment market is complex and risky, before considering investing you should always check if the firm is FCA registered, even if the firm states that it is FCA registered if it is based in the Cayman Islands or some other off-shore location you will not be protected by the Financial Ombudsman. You should also consider whether the celebrity endorser is likely to have the necessary investment market expertise to be able to judge the scheme being promoted.”
Financial scammers are quick and extremely adaptable to exploit new trends. The scams are continuing to expand year after year and celebrities have a significant role to play in tracking down the deceiver exploiting the celebrity name.