Sir Richard Branson has warned that criminals are using his name to dupe people into buying fake investments. The billionaire businessman said such scams could be “terrifyingly deceptive” after being contacted by victims who were led to believe he was involved and had discovered their investments were worthless or nonexistent.
Branson made the comments as City of London police warned about the growing problem of criminals using the reputation of famous people such as the Virgin founder to give investments credibility. This brand of fraud sees criminals pose as binary options traders on social networks such as Facebook and Twitter, often using the promise of unrealistically high returns on “investments” to lure potential victims.
The City of London police, the lead police force for fraud, said there had been a large increase in cases of binary options fraud, with the number of reports tripling in the last financial year and losses increasing from £2m to £13m during the same period.
Branson, who is worth £4.9bn, according to the latest Sunday Times rich list, said: “I am determined to prevent anyone being confused into giving money or their personal information away on a false pretence. These scams can be terrifyingly deceptive, and I would urge everyone to look out for these stories and report them as soon as you see them.”
Some countries have banned the trading of binary options, which are not currently regulated by the Financial Conduct Authority (FCA), so investments in them are not protected by the UK’s financial services complaints and compensation scheme.
Police said signs of potential fraud might be occurring included an offer of a higher-than-average return on an investment, a refusal to credit customer accounts, the severance of contact with the customer, and the manipulation of software to distort prices and payouts. Members of the public should also consider that “if it seems too good to be true, then it probably is”.
According to figures from Action Fraud, the national fraud and cybercrime reporting centre, there were 664 reports of binary options fraud during the financial year 2015/16. This rocketed to 1,474 reports in 2016/17.
Det Supt Glenn Maleary said: “Action Fraud and the City of London police have seen an increase in binary options fraud in the last two years. Opportunist fraudsters have taken advantage of an unregulated market and done everything they can to defraud unsuspecting investors.
“Anyone who invests in binary options should be vigilant about who they are trading with and should follow our protection advice to ensure that they don’t fall victim to what is becoming a commonplace investment scam.”