Rip Off Britain: Man recalls falling victim to £10,000 bank scam
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An estimated £140million has been lost to crypto scams over the past year alone, according to Action Fraud. This is 30 percent more than the amount of money lost last year to crypto fraud, emphasising how prevalent scam operations have become in the UK in regards to certain cryptocurrencies, such as Bitcoin. Since the start of 2021, the UK’s fraud reporting centre has received 7,118 reports of cryptocurrency fraud, with an average loss per victim of just over £20,500.
Action Fraud’s research found that 18 to 25 year olds made up the highest percentage of reports at 11 percent.
Overall, investors aged between 18 to 45 years old accounted for over half of the victims hit by crypto scammers.
One of the most common tactics used by fraudsters to scam people out of their crypto assets is fake celebrity endorsements, according to Action Fraud.
Scammers will pose as A-list celebrities to present professional looking advertisements with the backing of a strong digital presence and operations.
Crypto warning: Investors losing average £20,000 to scams – how to protect yourself yourself (Image: GETTY/EXPRESS.CO.UK)
Fake testimonials are also becoming increasingly common in relation to crypto fraud, with celebrities or case studies being used to falsely give legitimacy to the scam.
In 2021 alone, some 558 investment fraud incidents have been reported which have made reference to a phoney celebrity endorsement.
Some 79 percent of these reports by victims made reference to cryptocurrency as the specific commodity which they invested into.
Craig Mullish, the Temporary Detective Chief Inspector for the City of London Police, explained the danger posed by online scams to those investing in cryptocurrencies, such as Bitcoin.
Mr Mullish said: “Reports of cryptocurrency fraud have increased significantly over the past few years, which is unsurprising given everyone is spending more time online.
“Being online more means criminals have a greater opportunity to approach unsuspecting victims with fraudulent investment opportunities.
“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.”
Following the publication of these statistics, Action Fraud has also released advice for crypto investors regarding the best ways people can try to avoid becoming a victim to these crimes.
Crypto investors have lost on average £20,000 to scams (Image: GETTY)
These include being overly cautious of adverts promising high returns on cryptocurrency products or services and not rushing into any investment.
Furthermore, investors are being called to become aware that the majority of firms advertising and selling investments in cryptoassets are not authorised by the Financial Conduct Authority (FCA).
As a result of this, anyone who buys into these assets and becomes a scam victim may not get the full support of the the Financial Ombudsman Service or the Financial Services Compensation Scheme.
This means all investors should check the FCA’s Register to see which firms are authorised and regulated.
On top of this, Action Fraud reminded investors that they should use a financial adviser accredited by the FCA for guidance on managing crypto services and products.
On Action Fraud’s website, the scam reporting body left some parting advice to future crypto investors: “Remember, if something sounds too good to be true, it probably is.”