Crypto Currency Fraud Costs £Millions
Being online more means criminals have a greater opportunity to approach unsuspecting victims with fraudulent investment opportunities and in Britain data from Action Fraud, reveals a staggering £146m has been lost to crypto currency fraud since the start of this year, which is almost a third more than was lost throughout the whole of 2020.
Since the start of this year, Action Fraud has received 7,118 reports of crypto currency fraud, with an average loss per victim of just over £20,500. 18 to 25 year olds accounted for the highest percentage of reports (11 per cent) and over half (52 per cent) of victims were aged 18 to 45 years old.
Chief Inspector Craig Mullish, from the City of London Police, said: “Reports of crypto currency fraud have increased significantly over the past few years, which is unsurprising given everyone is spending more time online... We would encourage anyone thinking about making an investment to do their research first and to stop and think before making an investment as it could protect you and your money.”
One common tactic used to defraud victims is the use of celebrity endorsements. Criminals will present professional and credible looking online adverts, send emails and create websites to advertise fake investment opportunities, including crypto-currency.
Often, fake testimonials are accompanied with a picture of a well-known figure to help the investment seem legitimate.
What is Crypto Currency Fraud?
Crypto currency is a digital or virtual currency designed to work as a medium of exchange. Crypto-currencies are known for their market volatility so the value of investor’s assets go up and down quickly. As more people have invested their money in crypto-currencies, criminals have capitalised on this as an opportunity to commit fraud.
Criminals advertise schemes promising, in some cases, high returns through crypto-currency investing or mining. Frequently advertised on social media, criminals try to lure you in with adverts offering easy money quickly in order to obtain your money or personal information.
How You Can Protect Yourself
• Be wary of adverts online and on social media promising high returns on investments in crypto assets or crypto asset-related products and be suspicious if you are contacted out the blue about an investment opportunity. This could be via a cold-call, an e-mail or an approach on social media.
• Don’t be rushed into making an investment. No legitimate person or firm will pressure you into making an investment, or committing to something on the spot. Take time to do your research.
• Most firms advertising and selling investments in crypto assets are not authorised by the Financial Conduct Authorotiy (FCA).
This means that in Britain, if you invest in certain crypto assets you will not have access to the Financial Services and Compensation Scheme, so always check the FCA Register to make sure you’re dealing with an authorised firm and check the FCA Warning List of firms to avoid.
• Seek advice from trusted friends, family members or independent professional advice services before making a significant financial decision. Even genuine investment opportunities can be high risk.
• Use a financial advisor accredited by the FCA. Paying for professional advice may seem like an unnecessary expense, but it will help prevent you from being scammed.
• Only use the telephone number and email address on the FCA Register, not the contact details the firm gives you and look out for subtle differences.
• Just because a company has a glossy website and glowing reviews from ‘high net worth’ investors does not mean it is genuine – fraudsters will go to great lengths to convince you they are not a scam.
• Remember, if something sounds too good to be true, it probably is.
If you think you’ve been a victim of an investment fraud, report it online to Action Fraud. For more information about investment fraud, visit FCA ScamSmart
Action Fraud also advises that the public follow this advice:
- Stop: taking a moment to stop and think before parting with your money or information could keep you safe.
- Challenge: could it be fake? It’s okay to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
- Protect: if you think you’ve been a victim of fraud, contact your bank immediately and report it to Action Fraud.
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