Victims lost £339m to investment fraud last year

Victims lost £339m to investment fraud last year

Victims lost £339m to investment scams last year amid warnings the City of London's cybercrime team are witnessing a "sharp rise" in cryptocurrency fraud. 

Speaking at a financial crime conference hosted by the Personal Investment Management & Financial Advice Association in London yesterday (February 4), Max Bruce, cyber protect officer at Action Fraud, said the service had received 6,427 reports of investment fraud in 2019. 

Mr Bruce warned there had seen a "sharp rise" in the number of people falling victim to crypto scams, which he put down to the public being less familiar with these types of investments and therefore more vulnerable to fraudsters. 

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He said: "Trends we are now seeing are in the cryptocurrency market and people being pushed to invest in this area.

"This is probably an area people aren't as familiar with and there is not as much regulation available in the sector. It's hard for people to know which are legitimate." 

Mr Bruce also said phishing fraudsters were beginning to evolve their tactics to reflect changes in current news and make their targeted approach more personal to victims. 

He said: "We are seeing a sharp rise in people being targeted as an individual and not a mass marketing approach.

"There is a level of detail in the scams which looks to build a relationship with the victim. Also within the mass email side of things, Her Majesty's government is always the most phished brand because pretty much everyone engages with it in some way.

"Year on year it's always been HMRC, the taxman, that we see the most phishing emails for and often the most successful. But actually now we are seeing fraudsters using other brands within this area, such as TV licensing.

"Everyone has a TV so you'd expect to see communication on this and there is also a lot of things about TV licensing in the news. So they are picking up on what people might already be aware of." 

Last year the Financial Conduct Authority renewed its warning against online investment scams, reporting victims had lost more than £27m exclusively to crypto asset and foreign exchange fraud in the last financial year.

Many cryptocurrency scams use social media to promote "get rich quick" investments - but once funds have been transferred and following promises of profits, the returns stop and the victim's account is closed as the scammer ceases all contact.

According to the FCA and Action Fraud the number of crypto asset and foreign exchange scam reports more than tripled in the 2018/19 financial year to 1,834, up from 530 in 2017/18. 

The average victim reportedly lost £14,600 last year, with a total loss of £27,366,127.

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