"The pensions cold calling ban was a step in the right direction to protect consumers’ pensions but won’t help in the wider battle to tackle fraudsters as they move onto softer targets."
Action Fraud reports show that on average, victims were each scammed out of £14,600 from forex and crypto scams in 2018/19.
Fraudsters will often use social media to promote their ‘get rich quick’ online trading platforms. Posts often use fake celebrity endorsements and images of luxury items which then link to 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.
As part of its ScamSmart campaign, the FCA is running advertising to raise awareness of online trading scams.
Director of Action Fraud, Pauline Smith, said: "These figures are startling and provide a stark warning that people need to be wary of fake investments on online trading platforms. It’s vital that people carry out the necessary checks to ensure that an investment they’re considering is legitimate.
"Action Fraud is pleased to be partnering with the FCA to raise awareness of online trading scams, and we hope it will help prevent more people falling victim. Remember, if you think you have been a victim, contact Action Fraud."
Kate Smith, head of pensions at Aegon, commented: “It is disappointing to see investment scams continuing to rise with reports of money lost to crypto and forex investment scams tripling over the last financial year. This should serve as a warning that fraudsters are still very much at large and using ever inventive ways to scam people out of their money.
“The FCA are doing some good work to actively raise awareness in this area and help individuals steer clear of bogus investments. However, much more is needed to be done to simply keep up as scammers are becoming increasingly sophisticated in their techniques through advancing digital technologies to lure potential investors.
“The pensions cold calling ban was a step in the right direction to protect consumers’ pensions but won’t help in the wider battle to tackle fraudsters as they move onto softer targets. The government needs to work alongside the regulators to stem the tide of fraud and help keep the threat of scammers in the spotlight.”
