£63m lost to investment fraud scams on social media

More than £63m has been lost nationally by victims of investment fraud who referred to a social media platform in their report to Action Fraud, new figures have revealed.

The national reporting centre for fraud and cyber crime stated that criminals are continuing to use popular social media apps to advertise investment scams and contact potential victims.

Some victims mentioned being approached directly by an investment fraudster, whilst others said they were attracted to a fake investment through adverts.

Action Fraud confirmed that during a 12-month period, 5,039 reports of investment fraud made reference to a social media platform, with 44.7% of reports stating the fake commodity they had been scammed into investing in was a type of cryptocurrency. In the reports, Instagram was the most referenced platform (35.2%), followed by Facebook (18.4%).

The City of London Police said the use of social media by criminals is helping to buck the trend for typical investment fraud victims, with under-30s being most affected. Specifically, 27.5% of all investment fraud victims who mentioned social media in their report were aged between 19 and 25.

By contrast, when looking at investment fraud reports where social media didn’t play a factor in the scam, the average age of victims was over 50.

Superintendent Sanjay Andersen, from the City of London Police’s National Fraud Intelligence Bureau, said that reports of investment fraud have “increased significantly” since the start of the coronavirus pandemic.

“Being online more means criminals have a greater opportunity to approach unsuspecting victims with their scams,” Anderson said. “We would encourage anyone thinking about making an investment to do their research first. Visit the FCA’s website and check and double check every detail before handing over your money or personal details.”

Commenting on Action Fraud’s latest figures, interactive investor personal finance campaigner, Myron Jobson, added that social media has “unwittingly become a breeding ground for dastardly investment scams”.

Jobson added: “These scams feed on the fear of missing out culture that is rife on social media platforms, luring users in with phoney ‘too good to be true’ investment opportunities amid posts showing users living their ‘best life’. However, these scams have a devastating consequences on victims, both financially and emotionally.

“There is an epidemic of financial scams in the UK which has been exacerbated over the past year by the pandemic, with fraudsters taking advantage of the COVID tumult to hide their nefarious schemes.
“It is all too easy for unscrupulous individuals to promote their scams to the masses, so it paramount that Online Safety Bill puts a legal onus on these companies to do more in tackling the issue.
“Financial companies, charities as well as the regulator have been screaming for the bill to be amended accordingly. The government must now act to pull the plug on social media scammers.”

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