Over £27m lost to crypto & forex investment scams

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City Police-led Action Fraud and the Financial Conduct Authority (FCA) are warning the public to be wary of investment scams carried out via bogus online trading platforms.

The caution comes after reports of cryptoassests (crypto) and forex investment scams more than tripled last year to over 1,800 nationwide. Fraudsters promise high returns, with victims losing over £27million in total in 2018/19.

Fraudsters often use social media to promote their ‘get rich quick’ online trading platforms. Posts will use fake celebrity endorsements and images of luxury items, such as expensive watches and cars, to attract users, 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. Fraudster will then contact the victim to invest more capital or introduce friends and family with the false promise of greater profits.

However, the returns eventually 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.  As part of the FCA’s ScamSmart campaign, the authority 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 FCA’s campaign encourages those considering an investment to check its dedicated website (fca.org.uk/scamsmart) for tips on how to avoid investment fraud.

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.

“It’s vital that people carry out the necessary checks to ensure that an investment they’re 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 at FCA, added: “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 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.”