FBI says fraud on LinkedIn a ‘significant threat’ to platform and consumers

Fraudsters who exploit LinkedIn to lure users into cryptocurrency investment schemes pose a “significant threat” to the platform and consumers, according to Sean Ragan, the FBI’s special agent in charge of the San Francisco and Sacramento, California, field offices.

“It’s a significant threat,” Ragan said in an exclusive interview. “This type of fraudulent activity is significant, and there are many potential victims, and there are many past and current victims.”

The scheme works like this: A fraudster posing as a professional creates a fake profile and reaches out to a LinkedIn user. The scammer starts with small talk over LinkedIn messaging, and eventually offers to help the victim make money through a crypto investment. Victims interviewed by CNBC say since LinkedIn is a trusted platform for business networking, they tend to believe the investments are legitimate.

Typically, the fraudster directs the user to a legitimate investment platform for crypto, but after gaining their trust over several months, tells them to move the investment to a site controlled by the fraudster. The funds are then drained from the account.

“So the criminals, that’s how they make money, that’s what they focus their time and attention on,” Ragan said. “And they are always thinking about different ways to victimize people, victimize companies. And they spend their time doing their homework, defining their goals and their strategies, and their tools and tactics that they use.”

Ragan said the FBI has seen an increase in this particular investment fraud, which is different from a long-running scam in which the criminal pretends to show a romantic interest in the subject to persuade them to part with their money. The FBI confirmed it has active investigations but could not comment since they are open cases.

In a statement, LinkedIn acknowledged there has been a recent uptick of fraud on its platform, telling CNBC that “we enforce our policies, which are very clear: fraudulent activity, including financial scams, are not allowed on LinkedIn. We work every day to keep our members safe, and this includes investing in automated and manual defenses to detect and address fake accounts, false information, and suspected fraud.”

“We work with peer companies and government agencies from across the world with the goal of keeping LinkedIn members safe from bad actors. If a member encounters or is the victim of a scam we ask that they report it to us and to local law enforcement.”

LinkedIn’s senior director of trust, privacy and equity, Oscar Rodriguez, said, “trying to identify what is fake and what is not fake is incredibly difficult.”

“One of the things that I would really love for us to do more is get into proactive education for members,” Rodriguez said. “Letting members know or basically allowing them to understand the risks that they might face.”

The company says it removed more than 32 million fake accounts from its platform in 2021, according to its semiannual report on fraud. From July to December 2021, its automated defenses stopped 96% of all fake accounts — that includes 11.9 million that were stopped at registration and 4.4 million that were proactively restricted, the report said. Members reported 127,000 fake profiles that were also removed.

LinkedIn said its automated defenses caught 99.1% of spam and scams, a total of 70.8 million, in that same time period. Another 179,000 were removed after members reported them. LinkedIn said it doesn’t provide estimates on how much money has been stolen from members through its platform.

The company cautioned users in a Thursday night blog post on its platform against sending money to people they don’t know and responding to accounts with a questionable work history or other red flags, such as poor grammar.

That’s little comfort to Mei Mei Soe, a Florida benefits manager who says she lost $288,000 — her entire life savings — to a scammer on LinkedIn. It started out innocently enough with someone whose profile said he was a manager at a Los Angeles fitness company seeking to connect with her last December. They began chatting first over LinkedIn and then on a messaging app, and she said she was intrigued by his offer to help her make money.

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