Lloyds Bank reports 23% increase in cryptocurrency scams in 2023

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Lloyds Bank reports 23% increase in cryptocurrency scams in 2023
Credit: © Reuters.

Lloyds (LON: LLOY ) Bank warned on Friday about a 23% surge in cryptocurrency investment scams from last year, with victims losing an average of £10,741 each, a significant increase from £7,010 the previous year. These scams predominantly affect individuals aged between 25 and 34 years. Fraudsters typically use social media platforms to spread bogus ads and direct messages with exaggerated promises of returns.

In addition to social media tactics, scammers also clone accounts and websites to impersonate genuine firms, using fake endorsements to build credibility. They often deceive victims with fake investment accounts or accounts under the victim's name on legitimate platforms. Typically, victims make three payments before realizing the scam and take about 100 days to report it.

Liz Ziegler, the fraud prevention director at Lloyds Bank, highlighted the unregulated nature of the crypto asset class as a primary attraction for fraudsters. She emphasized the difficulty in recovering funds if things go wrong with crypto investments and called on tech companies to take more responsibility for scam prevention, customer protection, and contributing to refunds when their platforms are used to perpetrate scams.

The bank advises against sharing account details or transferring cryptocurrency to another wallet. It recommends that investors use the Financial Conduct Authority (FCA) website for company verification and card payments for more protection. The FCA mandates clear warnings about potential losses in all crypto investments and provides a list of genuine firms and warnings about fraudulent ones.

Regulations in crypto marketing should help investors identify legitimate crypto ads. However, given the high-risk and unregulated nature of the asset class, Lloyds Bank stresses the importance of investing with trustworthy companies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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