Crypto Investment Is One Of The Most Common Scams Reported In 2018, Says UK FCA

Crime, News | February 7, 2019 By:

The UK Financial Conduct Authority (FCA) has warned investors to be vigilant to the threat posed by crypto investment scammers.

Citing data from Action Fraud, the FCA said that common investment scams’ losses amounted in total to over £197 million ($255M USD) in 2018, with victims losing on average over £29,000 ($37,000). The most commonly reported scams involved investments in shares and bonds, forex and cryptocurrencies by companies that are not authorized by the authority. According to data from the FCA call center, of the 5,884 investment scams reported in 2018, 4,996 involved share and bond scams, forex and cryptocurrencies.

“Together they accounted for 85% of all suspected investment scams reported in 2018,” the FCA said. “People are warned to be particularly vigilant during the first quarter of the year, the peak investment season, as many look to invest before the tax year end.”

The regulator is urging people to be vigilant when making investment decisions, and to look out for six warning signs, including unexpected contact, time pressure, social proof, unrealistic returns, false authority and flattery. The agency advised investors to check the FCA Warning List to find out more about the risks associated with an investment, and search a list of firms the regulator knows are operating without its authorization.

“The first quarter of the year is a common time for people to make their financial plans for the year, including investments,” said Mark Steward, Executive Director of Enforcement and Market Oversight of the FCA. “But before you invest do your homework. Always check the FCA’s register to make sure you’re dealing with an authorised firm and use the contact details on our register, not the details the firm gives you, to avoid ‘clones’. Also check the FCA Warning List of firms to avoid. Remember, if in any doubt – don’t invest!”

Personal finance expert Alvin Hall, who is working with FCA to educate the public on the most common tactics used by investment scammers, said that the FCA Warning List is a fantastic resource for smart investors to use to protect themselves from scams.

“If my 30 years of experience in investment markets has taught me anything, it’s this – regardless of how confident you are about what you’re investing in, you should also be just as confident you know who you’re investing with,” Hall said. “Spotting an investment scam is increasingly challenging. To prove that point, my experience was put to the test when I was pitched three investment opportunities.”