A recent alert from Lloyds (LON:LLOY) Bank reveals a concerning surge in cryptocurrency investment scams in the United Kingdom, with a 23% increase reported compared to the same period last year.
The average financial loss for victims of such scams stands at £10,741, a significant rise from £7,010 in the previous year, and higher than losses from any other consumer fraud.
A notable 66% of investment scams originate from social media platforms, particularly Instagram and Facebook (NASDAQ:META), where fraudsters employ bogus ads, fake celebrity endorsements and direct messages.
The primary targets of these scams are younger investors, aged between 25 to 34, lured by the allure of quick wealth through cryptocurrency trading.
Illusion of a non-existent investment platform
Crypto scams often involve either the illusion of a non-existent investment platform or the takeover of a genuine investment account, where victims are tricked into transferring control or funds to the fraudster.
Lloyds Bank notes that Revolut is a common conduit for these fraudulent transactions, though not necessarily the final destination of the scammed funds.
These victims typically make three payments before realising the scam, often too late for banks to recover the funds.
Stresses the importance of vigilance
Lloyds Bank's Fraud Prevention director Liz Ziegler stresses the importance of vigilance, especially regarding cryptocurrency investments, which remain a largely unregulated and high-risk asset class.
She urges investors to be wary of social media solicitations and emphasises the need for thorough verification of investment opportunities.
Investors are advised to independently verify the authenticity of any investment opportunity and to be cautious of offers that seem too good to be true, particularly those involving cryptocurrency.
Additionally, sharing login details or private cryptocurrency keys is strongly discouraged.
Lloyds Bank's warning highlights the evolving tactics of fraudsters in the digital age, underscoring the critical need for awareness and caution in the increasingly complex landscape of online investment opportunities.