U.K. regulator warns of “startling” figures
Investment frauds involving crypto assets and foreign exchange (forex) trading more than tripled in the U.K. over the past year, the Financial Conduct Authority (FCA) reports.
The FCA and the U.K.’s fraud reporting agency, Action Fraud, recorded more than 1,800 reports of investment scams based on crypto and forex trading in fiscal 2019, up from 530 reports the previous year.
In total, more than £27 million was lost to crypto and forex investment scams in fiscal 2019, with the average loss coming at £14,600, it says.
“These figures are startling and provide a stark warning that people need to be wary of fake investments on online trading platforms,” said Pauline Smith, director of Action Fraud.
“It’s vital that people carry out the necessary checks to ensure that an investment they’re considering is legitimate,” she added.
The agencies reported that these sorts of scams typically aim to lure investors to professional-looking websites with phony celebrity endorsements and “get rich quick” promises.
“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,” the agencies said.
“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,” said Mark Steward, executive director of enforcement and market oversight at the FCA.