Lloyds Bank has issued an urgent scam warning as victims are losing up £11,000 in cryptocurrency investment scams.
The bank has recorded a 23 percent rise in reports of crypto investment scams by customers in its banking group between January and September 2023, compared with the equivalent period last year.
The Lloyds Banking group – which includes Lloyds Bank, Halifax and Bank of Scotland – analysis found that 66 percent of all investment scams start on social media – with Instagram and Facebook the most common sources.
This includes a mix of bogus ads, fake celebrity endorsements, and targeting through direct messages.
Scam victims are losing £10,741 on average, up from £7,010 last year.
The organised criminal gangs behind scams are constantly evolving their tactics to exploit new trends and trick more victims into parting with their cash.
Over recent years they’ve widened their net to target younger investors, who are often tempted by the supposed ‘get rich quick’ promise of cryptocurrency trading.
The most common age range for crypto scam victims is 25 to 34-year-olds, who make up a quarter of all cases.
The warning signs of a crypto scam
While even genuine investment in cryptocurrencies is highly risky –the FCA has stated people should be prepared to lose all their money as ultimately that is an individual choice for each investor.
Britons are urged to remember that scammers will do all they can to make the deal being advertised look like the real deal.
This can include setting up fake companies, social media profiles and websites to clone real firms. They may even produce investment literature that looks professional.
There are two main ways that fraudsters snare the cash of would-be investors through crypto scams.
The illusion: This is where there is no genuine investment platform or cryptocurrency involved. The fraudster, typically posing as an ‘investment manager’, promises that any payments made by the victim will be invested on their behalf, often with the promise of huge returns.
The takeover In some cases there will be an actual investment account held in the victim’s own name and registered with a legitimate platform, such as Coinbase or Binance.
Once funds have been deposited, victims may be tricked into handing over their account login details, or passing control of their digital wallet over to the fraudster.
Liz Ziegler, Fraud Prevention Director, Lloyds Bank, said: “Investing can be a great way to make money, but you need to make sure your money is going to a trusted, genuine company.
“Crypto is a highly risky asset class and remains largely unregulated, which makes it an attractive area for fraudsters to exploit. If something goes wrong, you’re unlikely to get your money back.
“Predictably, social media platforms are the main breeding ground for this type of scam, with a mix of bogus ads, fake endorsements and cloned accounts being key to fraudsters’ methods.
“It’s time these tech firms took responsibility for protecting their customers, stopping scams at source and contributing to refunds when their platforms are used to defraud innocent victims.”
