Instagram stars endorse risky investments

Celebrities who promote unregulated investment schemes have been branded “unethical” and MPs have called for their advertisements to be banned. Social media “influencers” have been promoting accounts that claim to offer training and guidance, and purport to help “hundreds of people quit their jobs and make money from home”, through investing in currencies.

This high-risk form of investing – also known as day trading – is not recommended for non-professional investors. However, advertised posts on social media site Instagram make no mention of the risks people would be exposed to.

Celebrities, with a combined 10 million social media followers on Instagram, have endorsed accounts run by @elliottrades and @tradelikebecksfx. Both are online foreign exchange ( FX) traders.

The celebrity Instagram endorsements use links to send followers into a message group – run via WhatsApp. There is no website for either account.

Fashion model Tyrone Hermitt and Love Island’s Callum Alexandré Izzard – known as Callum Weekender on Instagram – and Sherif Lanre have all endorsed @elliottrades by posting pictures of themselves looking at charts on various devices, claiming the person behind the page has been een “teaching” and “guiding” ng” them for several months. hs.

Four celebrities with h links to reality TV show w Geordie Shore – Marnie e Simpson, Sophie Kasaei, ei, Chloe Ferry and Talia Oatway – endorsed @tradelikebecksfx by sharing videos of her lavish avish lifestyle.

Chris Elmore MP, chairman hairman of the All-Party Parliamentary mentary Group on Social Media, a, said: “Barely a week passes asses without another example ple of murky practice on social ial media platforms being unearthed. thed. The issues surrounding celebrity l b it and influencer endorsers in the beauty and diet industry are well documented, but this has now spread into promoting high-risk investments.”

In September 2018 the Advertising Standards Authority ( ASA), a watchdog, launched new guidance stating that social influencers should make it clear whether they had been paid to promote a post by using the hashtag #ad.

Although all of the celebrity posts that endorsed @tradelikebecksfx included this hashtag, those that promoted @elliottrades did not, suggesting they were not paid. Also, none mentioned the risks associated with what they were promoting.

A spokesman for the ASA said: “If a British celebrity is promoting a financial product and is in a commercial relationship with, for example, a trading account, then they would have to ensure they followed our advertising rules. The post would also be subject to our general rules that require that ads do not mislead.”

The three posts flagged by Telegraph Money that did not appear to state clearly if they were advertisements will be assessed by

Celebrities who endorse high-risk trading strategies may soon be forced to stop. Above, Marnie Simpson and Callum Izzard; below, Sherif Lanre

Have you or someone you know invested with a trader through Instagram? We want to hear from you. Email the regulator to see if there was a commercial relationship rel between the traders trad and influencers.

The Th City Cit watchdog, t hd the Financial Conduct Authority (FCA), has said all communication on social media services such as Twitter, Instagram or Facebook should be “fair and not misleading”, giving balance to the risks as well as the potential rewards. However, the FCA has jurisdiction only over companies that it authorises.

Mr Elmore said: “The story is a familiar one – famous faces selling products that are unlicensed, unregulated and pose a real risk to those people lured in by the cachet of a celebrity rity endorsement.

“Like so many others, they operate rate in an online Wild d West, untouchable ble by the ASA and FCA. As the platforms themselves won’t act, the Government must, st, and these ads must ust be banned before e they cause any further misery.”

Anthony Morrow of OpenMoney, a financial advice e firm, said he was “horrified” by the posts. “It’s absolutely appalling to see reams of unregulated ‘currency trader’ accounts and endorsements popping up on social media feeds,” he added. “Not only is it completely unethical to use social media to promote products and services in this manner, but it can be incredibly dangerous not to fully explain the risks associated with any financial transaction where there is potential for loss.” As well as the potential loss of money now, a negative experience could also have a lasting effect on whether people trust legitimate, regulated investments in the future, he added. Both traders were called via the number ava available on their Instag Instagram page. The number given for @tradelikebecksfx did not answer, while @elliottrades hung up shortly after a answering. The celebrities w were contacted via th the email addresses on their Instagram pa pages. In most cases the addresses were for an agent. None N had responded to requests re for comment com by the time of publ publication.

Age UK has closed its equity release advice service following a Telegraph Money investigation that uncovered controversial links between the charity and a commercial firm.

The country’s leading charity for t the elderly and vulnerable had offered e equity release advice through its Age Co arm. This was operated by Hub Financial Solutions, which is owned by Just, one of the country’s biggest equity release mortgage providers.

In May 2019 this newspaper reported that Hub had structured its advice process so that it routinely r recommended deals from its own p parent company, Just, to consumers. Age UK received commission from every plan sold, potentially earning it thousands of pounds per sale.

Dean Buckner, an equity release expert formerly of the Bank of England, said the charity had rightly severed ties, arguing that equity release loans could quickly erode a pensioner’s wealth.

“It always seemed to me like a huge conflict of interest,” he said. “Such a relationship will always prompt the question whether a charity should be using its trusted brand to sell financial schemes, particularly when those deals could end up with the borrower penniless at a time of life when they must meet the cost of long-term care.”

Age UK said existing customers would be unaffected by the closure. It did not rule out re-entering the market with a new partner and denied its decision was linked to Money’s report.

Celebrities use online influence to promote risky currency schemes to millions. Jonathan Jones investigates

How we broke the story