Lloyds Bank is alerting its customers of the growing incidences of cryptocurrency scams. The bank recently issued a warning, indicating that 66% of investment scams are instigated through social media, particularly Facebook and Instagram. Fraudsters lure their victims via direct messaging, false celebrity endorsements, and fake ads.
According to the company, the number of cryptocurrency scams reported by victims has increased by 23% between January and September 2023, compared to a year prior. The losses associated with these scams average out to £10,741, a rise from last year’s £7,010. This type of consumer scam surpassed other scam activities, including purchase and romance scams.
“Investing can be a great way to make money, but you need to make sure your money is going to a trusted, genuine company,” said Liz Ziegler, Fraud Prevention Director at Lloyds Bank, in a prepared statement. “Crypto is a highly risky asset class and remains largely unregulated, which makes it an attractive area for fraudsters to exploit. If something goes wrong, you’re unlikely to get your money back.”
“Predictably, social media platforms are the main breeding ground for this type of scam, with a mix of bogus ads, fake endorsements and cloned accounts being key to fraudsters’ methods. It’s time these tech firms took responsibility for protecting their customers, stopping scams at source and contributing to refunds when their platforms are used to defraud innocent victims.”
Crypto Scams Are on the Rise
Crypto has gained traction in the UK, though it’s still met with caution, especially within the banking sector. A rise in crypto scams targeting UK consumers has prompted Chase Bank to bar customers from making cryptocurrency payments via their debit card or an outbound bank transfer.
Worldwide, these scams are becoming more prominent. Another tactic that crypto scam artists have used to dupe potential victims is by impersonating real companies via websites and social media profiles. In fact, Mark Cuban fell victim to a crypto scam, where he lost $870,000. Cuban later admitted that he had downloaded a fake version of MetaMask, which is a popular crypto wallet to manage Ethereum-based assets.
