Lloyds sounds alarm about crypto Scam

Lloyds Banking Group has raised concerns over a significant surge in cryptocurrency investment scams, reporting a 23% increase this year compared to 2022. British investors have been particularly targeted, with average losses per victim rising to £10,741 from £7,010 in the previous year.

Scammers are utilising social media platforms such as Instagram and Facebook for fraudulent activities, making up 66% of all reported investment scams. These platforms serve as a breeding ground for deceptive tactics, including fake advertisements, celebrity endorsements, and direct messaging campaigns. The primary targets are individuals, especially those aged 25 to 34, who are lured by the promise of quick wealth through cryptocurrency investments.

Sophisticated scams are orchestrated by organised criminal groups, continuously adapting their methods to exploit trends and deceive investors. Victims often make approximately three payments within 100 days of the initial transaction before realising they have fallen victim to a scam. Recovering lost funds at this stage becomes challenging. Revolut has been identified as the most common service for scam payments made by Lloyds Bank customers before the funds are transferred elsewhere.

Complicating matters further, victims often have legitimate accounts on cryptocurrency trading platforms like Coinbase or Binance. The relatively lax account opening procedures on these platforms make it easier for fraudsters to establish accounts in victims’ names or for victims to be deceived into sharing login details or control of their digital wallets.

Liz Ziegler, Lloyds Bank’s fraud prevention director, emphasised the high-risk nature of cryptocurrencies and their lack of regulation. She expressed concern about the role of social media companies in facilitating these scams and criticised them for not taking adequate measures to protect users or offer refunds when their platforms are used for fraudulent activities. Lloyds Bank’s alert serves as a stark reminder of the dangers associated with unregulated investment opportunities and underscores the importance of vigilance in online financial transactions.