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Alert Red Scam Alert FCA

FCA Issues Warning Against Scams 

Reading Time: 2 minutes by on February 7, 2019 Crime, News, Regulation

The FCA has announced that the amount lost to scams in 2018 reached $255 million in 2018 and urged investors to beware before they spend money on investors, as per a February 6, 2019 press release.

Conning Crypto 

Scams are nothing new, however the sheer amount of money lost to various scams, including crypto scams, has forced the Financial Conduct Authority (FCA), UK’s financial watchdog, issue out a warning to investors on February 6, 2019.

This is because of the amount of money lost by citizens to scammers in 2018, which has amounted to about $255 million with each individual victim losing about $37,000 on average. The scams in question weren’t limited to crypto but also included investments in shares, bonds, and forex markets with over 4,996 cases that year.

As a result, the FCA has been forced to issue a warning to citizens to beware of fraudulent investment opportunities, particularly during the first quarter of the year as that is the beginning of tax season.

The methods of targeting victims by scammers have also changed over time and aren’t limited to Cold-calling as it was in the past. Instead, the use of the internet has become more popular with social media profiles and well-done and professional-looking websites becoming part of the means to target victims.

In 2018, the FCA reported that 54 percent of the people who reported incidents of scams to them were approached by the scammers via the internet, compared to just 45 percent the year before.

Buyer Beware

In a bid to educate, the FCA commissioned financial expert Alvin Hall to create a six-point list that shows the signs to look out for when going into an investment.

Speaking on the matter, Hall said:

“If my 30 years of experience in investment markets has taught me anything, it’s this – regardless of how confident you are about what you’re investing in, you should also be just as confident you know who you’re investing with. The FCA Warning List is a fantastic resource for smart investors to use to protect themselves from scams,”

The list includes unexpected contact (which is becoming more internet-based), time pressure (in which potential victims are pressured with false claims of a deadline), Social proof (the use of fake reviews and testimonials to convince a victim), unrealistic returns (promises of absurd amount of returns), false Authority (trying to convince the victim by quoting reputable sources) and flattery.

Monex has also issued a warning about a new type of scam targeting their users in recent times.

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