'Finfluencers' Warning Issued: Online scam advisory
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Oct. 24—The Oregon Division of Financial Regulation (DFR) is warning investors to steer clear of online scams promising impossible to achieve rates of return to make up for recent market- and crypto-related losses, specifically as "finfluencers" become more prominent across social media channels.
The division has learned of several online scams that are couched as "education" and "guidance" to investors in what are actually steering schemes. These schemes make numerous misrepresentations about the investment and its rate of return through TikTok and Discord, making it difficult to later track down these misrepresentations and the individuals involved. The investment offerings are often targeted at people who have recently lost money on investments in cryptocurrency or stocks.
"Scammers are enticing investors with promises to make up for past losses," DFR Administrator TK Keen said. "Unfortunately, this has corresponded with the rise of finfluencers who may not be regulated by the state as financial professionals and may have undisclosed conflicts of interest."
According to the North American Securities Administrators Association (NASAA), a finfluencer is a person who, by virtue of their popular or cultural status, has the capability to influence the financial decision-making process of others through promotions or recommendations on social media.
They may seek to influence potential investors by publishing posts or videos to their social media accounts, often stylized to be entertaining so that the post or video will be shared with other potential investors.
As has been widely reported, cryptocurrencies continue to recede from previous record highs and some cryptocurrencies have completely failed. The volatility of these types of investments can make them risky choices for investors.
"The fundamentals of investing have not changed," Keen said. "Do your homework, make sure you understand the investment and its risks, and do not be swayed by those promising unrealistic returns, no matter their status on social media."
Consumers who have questions about these schemes can call the division's advocates at 866-814-9710 (toll-free).
