By Daniel Lanyon on 21st May 2019
The FCA says reports of crypto and forex investment scams in 2018/19 tripled to over 1,800 compared to the previous year.
Following a huge uptick in retail investors losing money via crypto assets and forex investment scams, the Financial Conduct Authority (FCA) has issued a warning to investors to be wary of bogus online trading platforms.
A report found a tripling of crypto scamming cases to 1,800 for the most recent tax year with victims losing over £27m in total in 2018/19. Each scammed out of £14,600 on average. The scams tend to be operated by fraudsters using social media promoting ‘get rich quick’ online trading platforms, often using fake celebrity endorsements and images of luxury items like expensive watches and cars. Consumers are persuaded to invest, often being led to believe that their first investment has successfully made a profit.
The fraudster will then contact the victim to invest more money or introduce friends and family with the false promise of greater profits. However, eventually the returns stop, the customer account is closed and the scammer disappears with no further contact.
Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, said: “We’re warning the public to be suspicious of adverts which promise high returns from online trading platforms.”
“Scammers can be very convincing so always do your own research into any firm you are considering investing with, to make sure that they are the real deal. Before investing online find out how to protect yourself from scams by visiting the ScamSmart website, and if in any doubt – don’t invest.”
The FCA offers four guiding points to avoid being scammed.
Don’t assume it’s real– professional-looking websites, adverts or social media posts don’t always mean that an investment opportunity is genuine. Criminals can use the names of well-known brands or individuals to make their scams appear legitimate.
Stay in control– avoid uninvited investment offers whether made on social media or over the phone. If you’re thinking about making an investment, thoroughly research the company first and consider getting independent advice.
Make the right checks – Firms providing regulated financial services must be authorised by the FCA. You can check whether they are authorised on the FCA’s Register. Use the contact details on the Register, not the details the firm gives you, to avoid ‘clones’.
Every report matters– If you have been a victim of fraud or cybercrime, report it to Action Fraud.