People with no financial understanding and knowledge are suffering poorly according to the FCA. The warning suggest those hard work good people with no financial experience lost over £27 million Crypto and Forex investment scams.
As explained by the FCA this is how the scams work
Fraudsters often use social media to promote their ‘get rich quick’ online trading platforms. Posts often use fake celebrity endorsements and images of luxury items like expensive watches and cars. These then link to professional-looking websites where consumers are persuaded to invest.
Investors will often be led to believe that their first investment has successfully made a profit. The fraudster will then contact the victim to invest more money or introduce friends and family with the false promise of greater profits. However, eventually the returns stop, the customer account is closed and the scammer disappears with no further contact.
Action Fraud reports show that on average, victims were each scammed out of £14,600 from Forex and Crypto scams in 2018/19.
The FCA suggest you do the following:
- Don’t assume it’s real – professional-looking websites, adverts or social media posts don’t always mean that an investment opportunity is genuine. Criminals can use the names of well-known brands or individuals to make their scams appear legitimate.
- Stay in control – avoid uninvited investment offers whether made on social media or over the phone. If you’re thinking about making an investment, thoroughly research the company first and consider getting independent advice.
- Make the right checks – Firms providing regulated financial services must be authorised by the FCA. You can check whether they are authorised on the Financial Services Register. Use the contact details on the Register, not the details the firm gives you, to avoid ‘clones’.
- Every report matters – If you have been a victim of fraud or cyber crime, report it to Action Fraud(link is external).
Don’t be a shame to pay £1,000 to a local financial advisor it can save you a large sum.
Financial advisor = only a person with a valid licence.
Valid licence = the name of the person should be listed on the Financial Services Register