Data from the Financial Conduct Authority (FCA) and Action Fraud showed that cyber criminals are getting bolder and more creative as they defrauded victims $35.35 million in 2018 involving more than 1,800 incidences of cryptocurrency and forex investment scams.
The FCA and Action Fraud issued a warning to the public to be on the lookout of investments scams from bogus online trading platforms by promising high returns from investments in crypto and forex.
FCA executive director of Enforcement and Market Oversight Mark Steward said, “We’re warning the public to be suspicious of adverts which promise high returns from online trading platforms. Scammers can be persuasive so always do your research into any firm you are considering investing with, to make sure that they are the real deal.
He went on to say, “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 report said 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 higher profits. However, eventually, the returns stop, the customer account is closed, and the scammer disappears with no further contact.
“These figures are startling and provide a stark warning that people need to be wary of fake investments on online trading platforms. It’s vital that people carry out the necessary checks to ensure that an investment they’re considering is legitimate,” said Action Fraud director Pauline Smith. He added, “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.”
As part of the FCA’s 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 skeptical of ‘get rich quick’ trading scams promoted online.
Supported by the City of London Police, the FCA’s ScamSmart campaign encourages those considering an investment to check its dedicated website for tips on how to avoid investment fraud.
Stay safe when scrolling
- 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 authorized by the FCA. You can check whether they are authorized on the Financial Services 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.