Ideas

The Social Media Epidemic No One is Talking About (Until Now)

Social Media Fraud

It’s hard to imagine life without being constantly connected. Everything is online these days from shopping to social interactions. So it’s no surprise when we see statistics on the growth of e-commerce and its forecast of being responsible for $4.5 trillion in sales in 2021. In the US alone, e-commerce is expected to grow by 15% each year. That means the chance to start your side hustle and make money online is here.  Unfortunately, the chances of getting scammed if you’re not careful is also here.   Ever heard of a social media scammer?  Today we get into a social media epidemic that’s hiding in plain site. 

Selling on Social

While e-commerce is booming, a large part of that is because of social media. Becoming a social media influencer is a popular side hustle and for good reason. Influencer marketing is something that anyone can do, as long as they can produce content that other users enjoy. Creating such content is a key part of gaining both the followers and the engagement needed to be successful as an influencer.

Traditional companies are increasingly turning to influencers to do their marketing for them. In 2019, it is estimated that companies will increase their influencer marketing budgets by 65%. In fact, 18% of these companies plan on spending $100K-$500K.

Even if you aren’t a social influencer, social media is an important selling channel for all businesses. And I’m not just saying it. It’s backed by statistics. Social influences 23% of shoppers, with 84% reviewing a product on social before making a purchase. So whether you are selling an online course or your own product or have a dropshipping business, you are likely to see a growth in sales due to social media.

People are shopping on social because they are already on the platform. But, the growth in sales is largely contributed to the tech that is making it easier to sell on social in general. Things like automated bot checkouts that work across social platforms are helping people sell even without putting a ton of emphasis on a traditional website.

Online Courses

While physical products and dropshipping are popular, another area where we are seeing more growth is in online courses. By 2023, it is estimated that the online education market is going to grow to over $286 billion. With 49% of students taking an online course in 2014, this statistic isn’t surprising. Nor is the fact that this percentage has only continued to grow.

This extraordinary growth has prompted creators to make more and more courses. A quick search online can produce a course on pretty much anything. Any topic you can imagine,  you can find a course on it. One particular type of course that we are seeing growth in are those courses that teach you how to have a particular lifestyle from online gurus.

I’m sure you’ve seen them:
  • “Break free from the 9 to 5 with only your smartphone”
  • “I’ll teach you my one-of-a-kind system to live the life of your dreams”
  • “Live a life of luxury, buy designer brands, and travel whenever and wherever you want to.”
  • “I’ve coached tens of thousands of beginners and will personally mentor you to become wildly successful.”

These courses are tempting. I mean, who doesn’t want to have a life of luxury with minimum effort? The way these courses advertise directly to those individuals who will easily believe that this could be a reality for them. Teens and young adults are particularly vulnerable to these selling techniques. With 90% of social media users being 18-29 years old and 81%of 13-17-year-olds using social media, this becomes somewhat problematic.

Insta-scamming

As we’ve already talked about social is great for e-commerce, including online courses. The problem comes when these courses are created and sold to vulnerable users by individuals that are falsely advertising its success. Countless “online gurus” make outlandish claims about their own success. But in reality, they have been anything but successful.

These gurus are selling you a dream and giving you an unachievable path to nowhere.

Faking Success

Many of these online gurus have drool-worthy social accounts (to the untrained eye). A quick glance at your feed will show you influencers living their best life. You’ll see countless posts featuring designer threads, private jets, and other luxuries. Each of these posts quickly racks up likes and comments. Many of these comments are from users wanting the influencer to teach them how to have a life like theirs. But what if I told you it was all fake?

Faking Photos

Some go as far as claiming 99% of private jet photos are fake. Economically, it kind of makes sense. Jet setting around the world in a private jet is expensive. You’d have to be bringing in some serious cash to be flying that way.

Even if it isn’t 99%, it is surprisingly easy to make yourself out to be a baller even if you are broke as a joke. Companies are popping up all over the world to help influencers look wealthy. They give them the chance to take photos in private jets without them ever getting off the ground. One example is Private Jet Studios in Russia. They provide the jet, the hanger, the photographer, and the makeup artist for your “private jet” experience. Not in Russia? Head to Canada. Over the past year, Toronto has seen several different pop-ups designed solely to give you that iconic Instagram shot. This is a trend that is popping up in other cities throughout the world at a rapid pace.

This sounds ridiculous, right? But think about it. There is an entire industry designed around helping people create fake Instagram posts.

But this is just the new-age way of faking success. You also have more traditional methods too. You can pose in front of someone else’s property, use photoshop, take photos in the dressing room, checking in at expensive events and restaurants at odd times, you name it. Simply make it seem like you are rubbing shoulders with the rich, you can give the impression that you are rich too.

Look carefully and you’ll find influencers selling these “online guru” type courses employing many of these same techniques. Yet, unsuspecting followers and fans take the influencer’s posts as legitimate examples of their success. This has resulted in these online gurus making money from selling these courses with false promises.

Baller Busters

Baller Busters

In a recent New York Times article named On the Internet, No One Knows You’re Not Rich. Except This Account.” In this article, it speaks to a relatively new instagram account called Baller Busters that setting out to expose online scammers.  Here is their mission statement, if you will:  To expose phony entrepreneurs. Using a mix of screen-shotted receipts, memes and crowdsourced information from followers, the account seeks out people who don’t “act their wage.”  

The fact that such a reputable news outlet took the time to recognize such an account is an indication of how rampant online social media fraud truly is when it comes to “online gurus”.  This is a genuine problem that people need to be aware of, especially the younger demographic out there that’s eager to get ahead in life and equally impressionable to the notion of living a glamorous guru life style.

Spotting a Scam

Influencers have gotten surprisingly good at making their lifestyle seem legitimate. They may have paid for engagement or faked their photos. But unless you know what you’re looking for, it may be difficult to catch them in the act. Here are some tips to spot an “online guru” scam:

1.  It Makes You Feel Inferior

Lifestyle and online business gurus design the marketing for their courses to emotionally trigger you. They are carefully worded and crafted to target individuals that are already struggling and wanting more. Their goal is to actually make the reader or user feel so bad about themselves that they jump on board and “change their lives.” The methods used by marketers to sell these courses are aggressive and difficult to fend off. If you find that you have signed up for a newsletter and are always feeling bad about yourself after reading the subject line or the body of the email, save yourself and unsubscribe.

2.  Selling Secrets

Nearly every online guru has a secret sauce, that magical solution that only they have. They’ll let you in on the secret, but you have to pay them first. This classic method of hoodwinking has been around for centuries. We urge you to stop and think. If they really had the secret to making all the money, having a carefree life, and unlimited happiness, would they really be charging people for that secret? And better yet, why are they the only one that has come across this secret?

Chances are you’ll get to the end of the course no closer than when you began. And to further understand their “secret,” you’ll have to get their next course (which is more expensive) for the in-depth explanation. A cycle that will continue to repeat itself. Let’s be honest. There are no secrets. Only dedication, consistency, and hard work. Don’t fall for this tactic.

3.  Claims Anyone Can Do It

The whole “anyone can do it” claim is the false hope that these schemes thrive on. The belief that everyone has the skillset, time, capability, and resources to follow their “plan” and be wildly successful. The truth is we all have different talents, different backgrounds, and different resources. Keeping this in mind, how can we all do exceedingly well at one particular thing? Claiming that anyone can do something is a far cry that often bypasses our rational brain. It then seeps in as irrational hope that this “easy solution” is the answer.

4.  Fake Credibility

If an online guru can fake a photo, don’t you think they can fake credibility too? It’s pretty easy to make up some fancy-sounding organization, group, or foundation to “validate” your success. This successful tactic is used by many of these online gurus. Why is it so successful? Most individuals won’t take the time to double-check that the organizations supporting the guru are legit. If you are considering purchasing an online course to learn a new skill, always do thorough research to make sure it’s worth it.

5.  Overpriced & Time-Sensitive

These fake online gurus often overcharge for their courses. Sometimes is only $97 and then you feel like you got a steal. Otherwise, the course is “only” $1299, $2499, $5999, and so on, plus all the add-ons. They are usually always offered on a discount and are time-sensitive. This is a rush tactic to get you to pull the trigger so you don’t lose the discount pricing. However, this discount pricing is typically arbitrary and overpriced. It’s chosen to make you feel like you are getting a good deal, while still over-paying for the information they are giving you. If the course is worth it, it should be selling at its normal price and there shouldn’t be such pressure to sign up in the “next 15 minutes.”

6.  Unclear Refund Policy

Before purchasing a course, you should always look for the refund policy and in what circumstances you can get your money back. Many of the online gurus that try to scam users fail to fully disclose their refund policy or honor their refund policy. You’re going to want to think twice if your “guru” has a strict no-refund policy on their course. Any decent online course should have a liberal refund policy that would actually let you get your money. You should not have to keep jumping through hoops for weeks on end trying to get a refund.

7.  Lump-Sum Payment or Contract Required

Many online gurus also offer coaching in addition to their online courses. This is just as profitable, if not more profitable, than the courses they sell. When you enroll in a coaching program, you should be able to pay as you consume services (i.e. every month). If a guru forces a lump sum payment for services to be rendered or requires you to sign a contract, it’s a sign to think twice. Chances are the guru doesn’t expect you to stick around and is trying to extract as much as they can up front. If the coaching actually gives you value then there would be no need to force an upfront payment.

8.  Poor Reviews

You always want to look for reviews before you purchase any online course. Do a quick google search of the online guru’s name and the course name. Pay particular attention to social medial presence.  This will often reveal reviews that are legitimate and not made-up testimonials. Reviews will usually tell you if it is difficult to get your money back, if other users have actually experienced success from the tactics taught in the course, and so forth. Never buy without first doing your research!

9.  They Found You

There’s a strong chance your prospective online guru found you. If you are looking for a business coach or an online business course, do your research. Finding your coach yourself ensures they are exactly what you are looking for. Chances are if they found you via email or social media, they are using aggressive marketing tactics to target you.

You’re Not Alone

Overwhelmed? Don’t be. A good rule of thumb to follow is If it sounds too good to be true, it probably is.  

Not all influencers are bad guys. There are the ones that legitimate and then there are the ones that are out to game the system and take your money while they’re at it. The bigger the flake influencer, the greater the chance that you’ll come across their scam at some point. 

If you fall for a scam, don’t be ashamed. The FTC reports that 40% of 20-29-year-olds that filed a report in 2017 lost money through some form of fraud. This is even more than the number of seniors that filed reports claiming money lost via fraud. Popular scams Millennials tend to fall for are phishing scams asking to update social networking profiles, participating in quizzes that require divulging lots of personal information, and malware. 

Actual statistics regarding the number of scams from fake influencers and online gurus have not been taken into account in any scamming reports that we can find directly. However, it is essential that you know they are a major threat, especially if you are a millennial (their target market). Social isn’t going anywhere, meaning these scams are growing in popularity. You just have to actively be aware that these kinds of online guru schemes. This is the first step in ensuring you don’t fall victim to them.

Stay Safe Out There…

We are already seeing an alarming number of influencers faking their wealth and success. Subsequently the number of “online gurus” is ballooning to epidemic levels. Even the feds agree. Over the last several years there have been multi-agency crackdowns on MLMs and online business coaching services. Just recently the FTC has taken down two major business programs (Guidance and MOBE “My Online Business Education”) for defrauding customers.

The best way to protect yourself is to stay informed. Do your research before you purchase any course and make sure the backstory adds up. Also, don’t forget to always look for reviews on the course to see what other students are saying about the course, their ability to get a refund, etc. If you’re still unsure of whether it is a scam or if you just want to stay on top of identified scams, check out the FTC’s website on Business Opportunity Scams.

If you think you have been scammed contact the FTC and file a complaint and let us and others know in the comments below.

 

Baller Busters

 

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