Italy’s securities regulator, Consob, issued an urgent warning about a surge in financial fraud schemes operating through WhatsApp. According to the market watchdog, scammers
impersonate prestigious firms like Morgan Stanley and BlackRock to bait and target
unsuspecting investors.

WhatsApp Emerges as New
Channel for Investment Scams

The
fraudulent operations follow a familiar pattern where unauthorized operators
promote seemingly lucrative investment opportunities through mobile messaging
platforms, specifically targeting retail investors through their smartphones.

“The
pattern is always the same: unauthorized operators promote illicit offers on
the web that are apparently very advantageous, but behind which, however, a
scam may be hidden,” Consob commented in
the newest warning. “In this specific case, the brands of Morgan Stanley
and Blackrock are used as a decoy, two large institutional investors whose
investment strategies they propose to replicate.”

The
regulatory warning comes amid growing concerns about the evolution of financial
fraud beyond traditional channels. The schemes typically promise to replicate
the investment strategies of well-known investors, using their reputation as
bait to lure potential victims.

This data
is supported by a survey conducted earlier this year by Finance Magnates
and FXStreet. The poll indicates that scams on WhatsApp and Telegram,
another popular chat app, are the most likely to result in financial losses for
victims, occurring in approximately 60% of cases.

Traders on WhatsApp Are
Vulnerable

A survey of
631 traders has highlighted Telegram as the riskiest platform for trading
scams, with 60% of targeted traders reporting financial losses. Similar figures
were recorded for WhatsApp, while Facebook, Instagram, and SMS followed with
56%, 51.8%, and 50% respectively. Traders on X (formerly Twitter) and LinkedIn
experienced slightly lower rates of loss, at 43.7% and 45.4%.

While
Facebook was previously identified as a major hub for scams targeting traders,
the latest data suggests that Telegram users face an even higher risk. Another
survey by Finance Magnates and FXStreet found that rookie traders, comprising
21.8% of respondents, were far less confident in avoiding scams compared to
their more experienced counterparts. According to an industry expert, educating
new traders on scam avoidance could be an essential starting point for safer
trading practices.

Discord Joins The Chat

Discord,
originally designed for gamers, has also become a popular platform among retail
traders, offering a virtual trading floor where users can engage in real-time
discussions on market movements via desktop or mobile. This digital shift is
transforming retail trading into a social experience, attracting more
participants every day. However, the platform’s growing influence has also
brought challenges, particularly in regulating its use for trading activities.

Yohay Elam,
Product Manager at FxStreet, identifies four reasons behind Discord’s
popularity among retail traders:

“First,
many of them have been used to seeking advice – and commiseration – in online
forums, and Discord provides an upgraded experience thanks to its ease of use,”
Elam commented. “Secondly, there is a significant overlap between the gaming
world, where Discord originated, and the trader world. The users share many of
the characteristics. Retail traders became familiar with Discord via gaming,
and using the platform in their community was a smooth transition.”

However,
Discord’s anonymity and private channels have made it a breeding ground for
dubious activities, including pump-and-dump schemes and scams targeting
inexperienced traders. The lack of oversight enables influencers to manipulate
markets and spread misinformation, raising concerns about the risks involved in
unregulated online trading communities.