Rising threat of crypto scams

Lloyds Bank issues urgent warning over rising threat of crypto scams

Lloyds Bank has issued a press release warning of an big increase in the numbers of British investors being defrauded through a growing number of fake adverts posted on social media. Analysis found that 66% of all investment scams start on social media, Instagram and Facebook being the most common sources and includes a mixture of bogus ads, fake celebrity endorsements, and targeting through direct messages.

The main points of the press release:

  • Crypto scams have surged by 23% this year as fraudsters target younger investors
  • Victims losing £10,741 on average, more than any other type of scam
  • Two-thirds of investment scams now estimated to start on social media
  • Findings highlight importance of investing through trusted, genuine companies

How to avoid crypto investment scams

Here are five tips from Lloyds on how to guard against crypto scams.

Beware of social media

Fraudsters often put adverts for scam crypto investments on social media. They can also send offers by direct message. They will promise returns that you can’t get elsewhere or make claims about ‘guaranteed’ profits. If you’re contacted out of the blue about an investment, it’s likely a scam.

Make sure it’s genuine

Fraudsters can easily set up fake companies, social media profiles and websites to clone real firms. Use the FCA website to find genuine contact details for a company and check for warnings about fake firms. Always do your own research or seek professional financial advice.

Check for warnings

Marketing of crypto is now regulated, which should make it easier to spot genuine crypto ads. According to the FCA, whenever you invest in crypto you should see prominent warnings about the risk of losing your money, and you shouldn’t be offered any free gifts to join or refer a friend bonuses.

Keep it to yourself

Never share the login details for your investment account or your private cryptocurrency keys with anyone else. A legitimate firm would never ask you for this. Remember if you transfer funds to another account that isn’t in your name, you have lost control of your money.

Protect how you pay

If you pay by bank transfer and it’s a scam, it’s very hard to get your money back. Fraudsters might ask you to pay an account in a different name to the company you are meant to invest with. If the names don’t match, it’s a sign of a scam. Paying by card always offers the greatest protection.

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Henderson Stone Asset Management Ltd is registered in Scotland. Company Number: SC585359. Registered address: Suite 3/1 Herbert House, 26 Herbert Street, Glasgow, Scotland, G20 6NB.