Fraud involving shares, bonds, Forex and cryptos tops investment scams list in 2018, FCA data show

Maria Nikolova

FCA contact centre data show that out of 5,884 investment scams reports last year, 4,996 involved share and bond scams, forex and cryptocurrencies.

The UK Financial Conduct Authority (FCA) has earlier today posted some gloomy data about investment scams. Data from Action Fraud reveals over £197 million of reported losses in 2018, with victims scammed out of over £29,000 on average last year.

According to data from the FCA call centre, the most commonly reported scams involved investments in shares and bonds, Forex and cryptocurrencies by firms that are not authorised by the FCA. Together they accounted for 85% of all suspected investment scams reported in 2018.

These numbers are in line with earlier statistics published by Action Fraud back in August 2018, which showed that, between June 1, 2018 and July 31, 2018, a total of 203 reports of fraud involving cryptocurrency were filed with Action Fraud. The total reported loss was £2,059,501.29. In some cases, victims have realised that they have been defrauded, but only after the website has been deactivated and the suspects can no longer be contacted.

In its warning published today, the FCA notes the profile of investment scams is changing, with an increasing number of people targeted online shifting away from the traditional cold call. Fraudsters are now contacting people through emails, professional looking websites and social media channels, such as Facebook and Instagram. Last year 54% of those who checked the FCA Warning List had been contacted by potential fraudsters via online sources, up from 45% in 2017.

The UK regulator is urging people to be vigilant when making investment decisions, and to look out for warning signs, such as promises of unrealistic returns and flattery by sales people to get people to make a deposit.

Investment scams include a psychological component which often prevents people from reporting they have been victims of a fraudulent scheme. Let’s recall that, back in October 2017, the FCA asked the public not to stay silent about investment scams.

That plea came as research conducted by YouGov showed 22% of over 55s surveyed who suspect they have been contacted about a fraudulent investment in the last three years, did not report about it. The most common reason cited for not reporting was not knowing who to report to (49%).

Although 63% say they would report a suspected investment scam to an organisation, this percentage is significantly lower than that of those who would report spilled liquids in a supermarket (84%) or fly tipping in their local area (81%).

Read this next

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

Digital Assets

Big Time Generates over $100M in Revenue since Preseason

Innovative game developer Big Time Studios announces that its highly anticipated free-to-play multiplayer action/MMO RPG Big Time, has generated $100M in revenue. According to the team, players transacted a total volume of over $230M, without selling a single token.

Digital Assets

Centralized exchanges are 10 times more popular than DEXs in Western Europe

Western European traders are found to prefer centralized exchanges over decentralized ones as CEX traffic outpaces DEXs by a factor of ten.

Market News

Stock Market Analysis: Is NVDA Losing Its Leadership?

Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?

Industry News

ESG: Australian regulator wins first greenwashing court case against Vanguard

Vanguard admitted that a notable portion of the securities within both the Index and the Fund did not undergo the promised ESG scrutiny.

<