- Over 27million lost to scams involving crypto and forex investments in 2018/19
- Victims lost on average over 14,600 last financial year
- Reports tripled to over 1,800 from the year before
he Financial Conduct Authority (FCA) and Action Fraud are warning the public to be wary of investment scams carried out via bogus online trading platforms. This warning comes as cryptoassests1 (crypto) and forex investment scams reports more than tripled last year to over 1,800. Fraudsters promise high returns from investments in crypto and forex, with victims losing over 27 million in total in 2018/19.
How do the scams work?
Fraudsters often use social media to promote their get rich quick online trading platforms. Posts often use fake celebrity endorsements and images of luxury items like expensive watches and cars. These then link to professional-looking websites where consumers are persuaded to invest.
Investors will often be 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.
Action Fraud reports show that on average, victims were each scammed out of 14,600 from forex and crypto scams in 2018/19.
Raising awareness
As part of the FCAs ScamSmart campaign the FCA will be running advertising to raise awareness of online trading scams. Running on social media, the ScamSmart adverts aim to make consumers more sceptical of get rich quick trading scams promoted online.
Supported by the City of London Police, the FCAs ScamSmart campaign encourages those considering an investment to check its dedicated website for tips on how to avoid investment fraud, www.fca.org.uk/scamsmart.
Director of Action Fraud, Pauline Smith, said:
These figures are startling and provide a stark warning that people need to be wary of fake investments on online trading platforms. Its vital that people carry out the necessary checks to ensure that an investment theyre considering is legitimate.
Action Fraud is pleased to be partnering with the FCA to raise awareness of online trading scams, and we hope it will help prevent more people falling victim. Remember, if you think you have been a victim, contact Action Fraud
Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, said:
Were 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 dont invest.
Stay safe when scrolling:
- Dont assume its real professional-looking websites, adverts or social media posts dont 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 youre 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 FCAs 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 cyber crime,report it to Action Fraud.
Background
- Cryptoassets is a broad term covering many different types of products. The most popular forms of cryptoassets include tokens like Bitcoin and Litecoin. The FCA call these exchange tokens but they are sometimes referred to as cryptocurrencies, cryptocoins, or payment tokens. Find out more about our approach to cryptoassets (fca.org.uk/firms/cryptoassets).
- Action Fraud data for forex and crypto investment scams. All losses have been taken from the field amount given and incurred losses on the Action Fraud reports which is not quality assured, therefore may contain errors when input by the victim. The data in the reports can be updated at any time by the victim on the live AF reporting tool, therefore losses for fraud can change.
- No of reports = 530 (FY 2017/18)
- No of reports = 1,834 (FY 2018/19)
- Average loss = 14,600 (FY 2018/19)
- Total loss = 27,366,127 (FY 2018/19)
- On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority.
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.