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Lloyds (LON:) Bank warned on Friday of a 23% rise in cryptocurrency investment scams over last year, with victims losing an average of £10,741 each, a significant rise from £7,010 in the previous year. last year. These scams predominantly affect people between 25 and 34 years old. Scammers often use social media platforms to spread fake ads and direct messages with exaggerated promises of profits.
In addition to social media tactics, scammers also clone accounts and websites to impersonate genuine companies, using fake endorsements to build credibility. They often deceive victims with fake investment accounts or accounts in the victim's name on legitimate platforms. Victims typically make three payments before becoming aware of the scam and take about 100 days to report it.
Liz Ziegler, head of fraud prevention at Lloyds Bank, highlighted the unregulated nature of the crypto asset class as a major draw for fraudsters. He stressed the difficulty of recovering funds if things go wrong with cryptocurrency investments and called on technology companies to take more responsibility in preventing scams, protecting customers and contributing to refunds when their platforms are used. to perpetrate scams.
The bank advises against sharing account details or transferring cryptocurrencies to another wallet. It recommends that investors use the Financial Conduct Authority (FCA) website for company verification and card payments for added protection. The FCA requires clear warnings about potential losses on all cryptocurrency investments and provides a list of genuine companies and warnings about fraudulent ones.
Regulations on crypto marketing should help investors identify legitimate crypto advertisements. However, given the high-risk and unregulated nature of this asset class, Lloyds Bank highlights the importance of investing in trustworthy companies.
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