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Protect Yourself from Fraud - Celebrity Endorsement Scams

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celebrity endorsements have existed since the silent movies

Celebrities have been used to promote products ever since the rise of the Hollywood star in the 1930s. From perfumes, to jewellery, fancy cars and watches to diet drinks and lingerie the rich and beautiful have always been able to help sell desirable things through clever advertising.

Nowadays celebrity is more accessible, not just reserved for the elite stars in Hollywood. Instagram ‘influencers’ (almost anyone with over 10,000 followers can call themselves one) are being paid huge sums to share photos of specific products on their 'insta feed' while anyone from reality TV guests, radio hosts and athletes can earn sizeable income from product endorsement. No matter what the product and the profile of the promoter, a familiar face is a powerful marketing tool.

Familiar and trusted faces are now being used to trick people into trusting fraudulent brands to buy products which may not exist or be not as described. Last week we covered some general tips to avoid losing money to scam through transferring funds into overseas accounts. This week we’ll dive into the details of one particular type of online scam which has seen people lose thousands of dollars this year alone.

The ACCC’s Scamwatch has reported people are increasingly being caught out by celebrity endorsement scams. Often appearing as online advertisements or promotional stories on social media or on what appears to be a trustworthy website, these scams have totalled more than $142,000 in losses in 2018.  The scams often incorporate fictitious quotes and images of the celebrity promoting products including anti aging skin care, diet pills, or investment schemes.  The ACCC has revealed its Scamwatch website has received almost 200 scam reports this year.  According to their statistics people aged 45 and older are more likely to be a victim (this age accounting for 63 per cent of losses) and women are more likely to fall for the scams than men.  Scamwatch have revealed that most people have lost somewhere between $100 to $500 with one victim losing over $50,000 thanks to a fake investment scheme endorsed by a celebrity. 

Scamwatch has reported that many of these scams work by attracting victims with a ‘free trial’ for a product, but in order to receive the free trial credit card details must be exchanged. The terms and conditions of these ‘free trials’ are very deceptive and make opting out of subscriptions or cancelling purchases very complicated and almost impossble in some cases. It is believed those behind these scams are highly organised and experienced fraudsters who are likely to have been involved in other online scams. It is recommended people think twice before signing up for any product advertised online with careful research and reading plenty of independent reviews (often a simple Google search will help to clarify the authenticity of a deal or a brand). But ultimately to be careful and sceptical about ads visible on read on social media and websites.

The ACCC has called on Google, Facebook and Instagram pull their weight in cracking down on fake ads to prevent scammers reaching potential
victims.  Here are just some of the celebrities who have had their image falsely used to promote celebrity endorsement scams according to reports made to Scamwatch: Cate Blanchett, Deborah Knight (Nine News Sydney presenter), Delta Goodrem, Dr David Sinclair (Head of Ageing Lab UNSW), Emma Thompson, Georgie Gardner (Today Show), Jessica Rowe (Studio 10), Kyle Sandilands, Lisa Wilkinson (Today Show), Meghan Markle, Nicole Kidman, Oprah, Sally Field (American actress), Sonia Kruger (The Voice, Today Extra) and Steve Baxter (Shark Tank).

If you are a victim of fraud or a scam contact your bank as soon as you can to see if you can arrange a payment reversal and to prevent any further debits coming from your accounts.

To keep in the loop people can follow @scamwatch_gov on Twitter and subscribe to Scamwatch radar alerts to stay up to date with the latest
scams targeting the community.

Alison Gallagher is a freelance writer, resourcefulness expert and entrepreneur. She has been featured in various publications including Stellar Magazine, Australian Health and Fitness Magazine, and Cleo Magazine. Alison is particularly passionate about sharing practical tips on how to live simply, sustainably and seasonally.