Reality stars have been criticised for allegedly exploiting money worries to peddle ‘get rich quick’ schemes to fans amid lockdown.
Instagram is rife with self-proclaimed ‘bedroom traders’ who claim to earn a fortune speculating on foreign currencies, or ‘forex’. They post dazzling images of expensive cars, wads of cash and glamorous foreign trips to reel in unsuspecting new clients.
Customers are told the same luxury lifestyle is just a phone swipe away – if they follow the gurus’ trading tips, also known as ‘signals’.
But the Financial Conduct Authority (FCA) says more than three-quarters of speculators end up losing their cash – at a cost of £1billion a year.
Campaigners say forex trading is so risky it should be regulated in the same way as gambling, and financial industry insiders say many of Instagram’s ‘traders’ really make their cash by selling expensive courses and through signing up new customers to brokers.
Stars of Geordie Shore, Love Island and Ex On The Beach have used Instagram to promote forex traders to their legions of young fans.
One guru promoted by reality stars is Jordan Heyward, 24, of Plymouth, who boasts of having more than 4,000 clients.
Mr Hayward, who has been promoted by celebrities including Kyle Christie, Scott Timlin, Thomas Powell and Ross Worswick, tells new customers to stake a ‘minimum’ of £300 by opening a forex trading account with Mauritius-based brokers BDSwiss.
But the FCA has now issued a statement about Heyward, which says: ‘This firm is not authorised by us and is targeting people in the UK.
Geordie Shore star Kyle Christie told his 1.3 million followers that Heyward – who markets himself on Instagram as @tradewithjordanfx – had been helping him earn ‘incredible profits’
Using images of his gleaming white BMW and photos of him relaxing in a hot tub while doing deals on his phone, Jordan Heyward markets a £297 forex course, mentoring and trading tips
‘Based upon information we hold, we believe it is carrying on regulated activities which require authorisation.’
Using images of his gleaming white BMW and photos of him relaxing in a hot tub while doing deals on his phone, he markets a £297 forex course, mentoring and trading tips.
He also uses screenshots of customers’ ‘daily profits’ to lure new clients with promises of making an easy buck.
Posting on Facebook as Heyward Marketing Ltd, he boasted: ‘During this isolation, clients have had nothing but time on their hands…time which they are using to follow our trades and learn from our e-books and videos.
‘What you’re seeing here is profits which not only they are making, but you can, too.’
Geordie Shore star Kyle Christie told his 1.3 million followers that Heyward – who markets himself on Instagram as @tradewithjordanfx – had been helping him earn ‘incredible profits’.
Scott Timlin – who posts on Instagram as @scottgshore – was declared bankrupt last year with debts of £147k. But the 31-year-old’s financial strife hasn’t stopped him telling his 2.7 million followers that Heyward holds the solution to their pandemic money worries
He told fans in a video story: ‘If you’re losing out on money and your income due to this lock down, you need to give my mate Jordan a message.’
Scott Timlin – who posts on Instagram as @scottgshore – was declared bankrupt last year with debts of £147k.
And in January he was criticised for using social media to plug a horse racing tipster.
But the 31-year-old’s financial strife hasn’t stopped him telling his 2.7 million followers that Heyward holds the solution to their pandemic money worries.
‘During this pandemic, my mate Jordan is helping thousands of people make a second income just from their mobile phones,’ he said in an Instagram story on Heyward’s page.
Meanwhile Love Island muscle man Thomas Powell, from Port Talbot, Wales, said in a video: ‘If you’re into making money off forex, Jordan is making a lot of money for a lot of his clients right now.’
And Manchester-based Ross Worswick, formerly of Ex On The Beach and founder of the £15m fashion empire, Couture Club, said: ‘Jordan is absolutely killing the forex game at the moment.
Love Island’s Thomas Powell, from Port Talbot, Wales, said in a video: ‘If you’re into making money off forex, Jordan is making a lot of money for a lot of his clients right now’
‘If you want a second income, if you want to work from home and earn a bit of extra cash, give him a message – he’ll get back to you and tell you exactly how to do that.’
Young people and low income earners are especially vulnerable to the Covid-19 financial squeeze.
Matt Zarb-Cousin, of Clean up Gambling, said: ‘It’s just awful.
‘To knowingly peddle products which are going to cause vulnerable people even more financial harm is completely inexcusable.’
And consumer expert Martyn James of complaints site Resolver said: ‘Using a platform like Instagram which is better known for selfies to flog a product with a fundamental high level of risk is totally inappropriate.’
Mr Zarb-Cousin, of Clean up Gambling, added: ‘I don’t believe that the people who are advertising this stuff are somehow blissfully unaware of what they’re doing.
‘If they’re not aware then they shouldn’t be advertising it. And if they are aware, it just shows what contempt they have for their own fans.’
Providing trading signals is classed as financial advice by the FCA which says traders who do it should be approved – or they risk breaking the law.
The FCA explained that forex scammers often pretend their wealth has come from trading and promise customers can do the same by copying their trades.
Heyward initially tried to claim he is regulated by the FCA before saying he did not need to be regulated ‘because I don’t give financial advice’.
Clean up Gambling added in a statement: ‘Forex is a form of gambling dressed up as investing, which gives the misleading impression that these platforms are a way to make money in the long term.’