Cryptocurrency scam checks on the FCA’s ScamSmart website also rose by 49 per cent in the period April to September 2021.
“It’s not at all surprising that cryptocurrencies make up the lion’s share of these enquiries, with almost three times more cryptocurrency scams reported to Scamsmart than the second most reported product,” said Matt Burton, chief risk officer at Quilter.
“The FCA’s supervision team did open over 300 cases related to unregistered cryptoasset businesses over the period, but beyond that the FCA has relatively limited powers.
“This should change however, with the application of financial promotion rules to cryptoassets, which is expected soon.”
Laith Khalaf, head of investment analysis at AJ Bell, said scam activity is not new, but that it does appear to be increasing in scale, and embracing new forms of digital communication.
Hee highlighted that almost one in five (19 per cent) of FCA ScamSmart users reported hearing about potential scams through social media adverts, and that a small minority (4 per cent) were directly approached on social media.
“That’s not to say traditional forms of hard selling have disappeared though, with a large number of people still hearing about potential scams on the phone or through friends,” said Khalaf.
“The vast network of information channels now used by consumers simply amplifies the opportunity for scammers and heightens the risk of scam activity.”