The number of foreign exchange and cryptocurrency scams more than tripled to 1,800 last year, the Financial Conduct Authority (FCA) said on Tuesday.
The regulator and Action Fraud, the UK’s national cyber crime and fraud reporting centre, said that Brits lost £27m to cryptocurrency and foreign exchange scams last year. Victims were swindled out of £14,600 on average.
“We’re warning the public to be suspicious of adverts which promise high returns from online trading platforms,” said Mark Steward, executive director of enforcement and market oversight at the FCA.
The FCA said scammers use fake websites, fake celebrity endorsements, and social media ads promising high returns and quick profits to lure in victims. Social media accounts associated with these scams often carry pictures of luxury cars and watches.
“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,” Steward said. “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 FCA is launching a new ad campaign to help educate consumers on how to spot and avoid scams. The regulator recommended checking to make sure that firms are registered with the FCA.
“These figures are startling and provide a stark warning that people need to be wary of fake investments on online trading platforms,” Pauline Smith, the director of Action Fraud, said. “It’s vital that people carry out the necessary checks to ensure that an investment they’re considering is legitimate.”
Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.