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Impersonation scams: how businesses fight back


The growth in alternative investments and desire for outsized returns has been matched by the rise of fraudsters seeking to exploit investors in emergent markets.

Credit card being used by a computer. Photo by Pickawood on Unsplash

One of the most effective ways to do this is by impersonation fraud, giving the impression that a well-known business is running an investment scheme in a newer asset class, giving a false veneer of legitimacy to a scam.

Law enforcement inevitably become engaged at the point that the investment vanishes when redemptions are due, but so too do the emails, social posts and calls to the legitimate business asking for their money back and making allegations of fraud.

Recently we have seen a surge of these scams, all affecting corporate clients who have a worldwide reputation in their industry. A large amount of these schemes claim to offer investment opportunities in the business or claim to be their investment arm, typically operating unchecked on platforms like YouTube, WhatsApp and Telegram, but with public facing web assets too.

The easiest company to impersonate is one with good brand recognition – everyone knows your branding and you’re instantly trusted. What took probably decades to build in terms of reputation can be utilised by the unscrupulous for fraudulent means.

So what do you do? We’ve compiled a quick checklist of what can be done/what you should be considering if your company is being impersonated.

Why does it matter?

While the business impersonated is not the true wrongdoer, the scams seldom pose a direct economic threat to them. However the behaviour of those using the name while running the scan, the infringement and denigration of protected IP assets and the risk of reputation harm when fraud allegations fly means many feel the need to act.

Beyond that, taking on scammers targeting those who trust your business is an inherent good for the benefit of customers or other stakeholders at risk of being defrauded.

What does it look like?

The first signals often come from feedback on public communication channels. Many clients have been alerted by those seeking confirmation that the investment is legitimate. Others because employees themselves have been contacted by them. In one extraordinary case ew have dealt with a CEO was contacted by the counterparty to a high value transaction who had been communicating with an imposter on LinkedIn.

Once there are hints a scheme exists, the next step is to establish how extensive it is. How big is the scheme? What jurisdictions are they operating on? Which platforms are they using? They say knowledge is power and understanding the scope of what has happened is imperative.

Key things to look for are the use of your logo, reference to your company, doctored incorporation documents. We’ve seen a varying amount of content when it comes to these impersonations, from use of trademarks to sharing company Wikipedia pages and cloning a company’s website. Some will even go so far as to incorporate a ‘subsidiary’ in jurisdictions to add legitimacy.

The next thing to consider - is there an investment scheme behind it? What are these individuals getting out of using your company’s name? Are they selling an imitation of your products illegally or just borrowing your good will to further another venture? We recently saw an example of an individual setting up an impersonation website so that he could promote his own business, providing evidence of a contract with our client that did not exist, other structures take the form of an investment pyramid scheme where it becomes necessary to determine who is a victim of a scam and who’s behind it.

What are the signs of a wider web?

In some cases, the activity viewed is that of a wider dirty tricks campaign and not a group of random individuals trying to make some quick cash. In some cases, there may be a systematic attempt to damage a company’s reputation.

The key distinguishing factor here is where the impersonators start to spend a large amount of funds on marketing and advertising a particular view – you have to ask where the funds came from as a traditional social media ponzi schemes are often low budget and use other users and victims to market their scam before refusing to return on their investment.

Disrupt the wrongdoers

If a company is seen not to care about consumers being ripped off under its name, this can cause reputational damage itself. There will be an expectation from the consumer for a household brand name to act to aid the average joe. If you don’t act and allow for consumers to be scammed, it may result in some negative press, as well as the risk of being tainted when allegations of fraud appear. Most impersonations take place on social media; tactical take downs, removing their platform, writing to website registrars are all effective options for disruption. Often fraudsters on a social media level will move on to the next impersonation if your company proves difficult to impersonate.

If there are risks that it could be a dirty tricks campaign, the use of tactical litigation to uncover who is behind the scheme is often available. Throughout it’s important to document what you find properly in case it is needed by others later to pursue their funds.

If you find the wrongdoer in the process, you can involve law enforcement or take steps to prevent further harm yourself. Ultimately when scams like this can be easily activated by small groups of people, even if it doesn’t prove possible to trace them creating deterrence to make life hard from them is often enough to halt the activity.

How can you pre-empt an impersonating ponzi scheme?

With a surfeit of available domain names, taking out all risk of impersonation sites is likely to be an expensive and still futile enterprise. Even retired brand names and merged subsidiaries are used; and people can still be convinced to invest.

Ultimately the best way to avoid these schemes is to catch them early. Strong monitoring of IP matched with rigorous and swift enforcement encourages the wrongdoers to move elsewhere before significant damage is done.