Crypto scams are at the top of the list of investment frauds. With scammers using fake social media adverts to target their victims. Martin Lewis, the trusted finance expert, and billionaire Elon Musk, are frequently used in scam advertisements, misleading people with their reputations.

The banking trade body UK Finance released data showing investment scams in the UK caused losses of £56 million in the first half of 2024. However, as many victims do not report scams the true total will be much higher.

Most of these types of scams are a type of authorised push payment (APP) fraud, where scammers deceive individuals into willingly transferring money from their bank accounts. The scam often begins with victims clicking on fake social media ads or news alerts promoting a promising cryptocurrency investment. In reality, these are traps set by fraudsters pretending to represent legitimate businesses.

Victims typically start by investing a small amount, like £250, and are then lured deeper into the scam through tactics such as fake trading software that shows fabricated profits, creating the illusion of wealth while the fraudsters pocket the money.

Reports of cryptocurrency scams have more than doubled since 2020. The FCA advises individuals to verify the legitimacy of investment firms through its Financial Services Register and to be cautious of unsolicited offers.

New rules now allow victims of APP fraud to potentially recover losses up to £85,000, and they can consult the Financial Ombudsman Service for additional support.

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