The number of reported crypto investment scams in the UK has risen by 23% this year, with the average amount lost by each British victim now £10,741 ($12,000) — up from £7,010 ($8,500) in 2022, according to a press release by Lloyds Bank.
Lloyds issued the ‘urgent warning’ on Friday together with its banking partners. The report notes that 66% of investment scams begin on social media, particularly Instagram and Facebook, through fake ads, celeb endorsements, and direct messages.
Contrary to popular belief, the Lloyds report states that ‘boomers’ aren’t the most common demographic to fall for crypto scams — that title belongs to those aged 25 to 34, who make up a quarter of all cases. Organised criminal gangs are purposefully widening their net to capture younger social media users “who are often tempted by the supposed ‘get rich quick’ promise of cryptocurrency trading,” the warning read.
These findings are supported by similar studies conducted by Deloitte and RMIT University, which also found that Gen Z and younger millennials are more likely to fall for an online scam.
Crypto scammers choosing Revolut
According to Lloyds, Revolut is the common choice for crypto scammers looking to direct victim funds into a bank account. It’s noted these figures are based on victims who bank with Lloyds.
Victims who are falling for these scams reportedly make on average three payments to the scammers and take 100 days to make a report of what has happened following that first transaction.
According to Liz Ziegler, fraud prevention director at Lloyds, the onus should be on tech companies to safeguard against these scams. “It’s time these tech firms took responsibility for protecting their customers,” she said, “stopping scams at source and contributing to refunds when their platforms are used to defraud innocent victims.”
The report offers these four tips to keep in mind when looking out for a crypto scam:
- Beware of social media: Watch out for out-of-the-blue investment opportunities and adverts for crypto investments that promise high returns or ‘guaranteed’ profits.
- Make sure it’s genuine: Use the Financial Conduct Authority site to check the legitimacy of a company and do your own research before investing.
- Keep it to yourself: Never share your login details — legitimate firms won’t ask for this.
- Protect how you pay: Try to avoid a bank transfer as it makes it hard to recover any lost funds.