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New lines of enquiry

Member: Nifa

The Competition and Markets Authority (CMA) is now investigating how celebrity “influencers” endorse products online and is including the role of the social media platforms they use in its investigation. The consumer protection and competition watchdog has told these influencers that they must tell their followers if they are being paid or otherwise rewarded to endorse products on social media.

While this investigation is to see whether these celebrities are breaking consumer law rather than whether they are declaring all of their earnings and benefits, it is a clear indication that a lot of financial intelligence can be gleaned from social media platforms. This gives financial investigators another line of enquiry, as lifestyle can be a strong clue as to how much money an individual has.

For example, a recent case involved a project manager who stole more than £500,000 from his employer and was tripped up by visibly spending wildly above his means. Apart from a property, the man bought a Louis Vuitton handbag costing £3,610 for his daughter and more than £15,000 on flights and holidays, including a trip to Australia. While he might have been careful about his own social media profile, there would undoubtedly have been a picture of the handbag somewhere or of him enjoying his holidays.

One tiny piece of evidence can often be enough for a forensic accountant, who would always try and find out where the money came from to fund these activities. Once a picture starts to build, it then becomes clear that extra money is coming in from somewhere.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “Forensic investigations are a great asset for uncovering unlawful financing from just a small amount of detail.

“If you believe you or your business could benefit from a forensic investigation then contact our experts today and find out how we can help.”

Author: Roger isaacs 4 February 2019

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