Lloyds Reports 23% Increase in Crypto Scams as Fraudsters Target Under 35s

On 10th November 2023, LBG issued an urgent warning relating to the 23% rise in cryptocurrency scams reported by its customers, compared to the same period in 2022, and urged vigilance by would-be investors.

The warning detailed some startling statistics relating to cryptocurrency scams, including:

• 66% of crypto scams start on social media, particularly Instagram and Facebook.
• The average lost to a crypto scam was £10,741, up by almost £4,000 since the same period last year.
• Victims make an average of 3 payments before they realise they’re being scammed.
• It takes an average of 100 days for victims to report the scam to their bank if they do so at all.
• The most common age demographic for victims is 25-34.

The warning also stated that the online bank Revolut was the most frequently used bank by scammers to receive money from victims.

Lloyds urged its customers to be aware that, even if a crypto investment seems legit on the surface, it is important to remember the lengths that scammers will go to in order to dupe victims. This includes setting up fake companies, fake websites, and fake social media profiles to back up the ruse.

Before engaging with any crypto investments (or investments generally), those interested should do due diligence, including finding the company’s genuine contact and website details on the Financial Conduct Authority (FCA) register. The FCA regulates financial services firms and markets in the UK.

We regularly cover cryptocurrency scams in our blog to help you stay up to date with the latest trends and legislation and to share tips on how to keep yourself and your money safe. If you are considering investing in cryptocurrency, it is essential that you understand how to identify a legitimate scheme and avoid falling victim to scammers.

Here are some steps you can take to protect yourself from crypto fraud:

• Be wary of anyone who contacts you out of the blue about investments, whether it is via social media, email, phone, or messaging apps.
• Seek professional financial advice before making any investment decisions. Take your time and carefully consider your actions.
• Never give someone you have never met access to your bank account, crypto wallet, or devices.

Also, be aware that, just because you have identified and reported a scam, the fraudsters will not always leave you alone. In some cases, scammers may try to contact you again with offers of “safer investments” or the chance to recoup your losses as a ploy to access even more of your money.

Once you’ve spotted a scam, you should first report it to your bank, the police, and Action Fraud. UK banks should have measures in place to prevent this kind of Authorised Push Payment (APP) fraud using security checks, monitoring of accounts, and stopping suspicious transactions.

If your bank refuses to help after a cryptocurrency scam and you think they’ve failed in their duty, you can seek an independent review from the Financial Ombudsman Service (FOS). They’re a government-supported organisation that handles disputes between banks and customers.

It is vital to remember that you shouldn’t feel alone, ashamed or embarrassed if you have been taken in by a cryptocurrency scam; they are clever and happen increasingly often. In 2022, people lost a staggering £266 million to these scams alone.

Sarah Spruce, Head of the Crypto Scam Claims team at TLW Solicitors commented:

“There is a misconception that scammers target the elderly and tech-phobic, but the warning from Lloyds shows that this is simply not true. Scammers are not picky; they are preying on victims’ appetite for ‘get rich quick’ schemes and those looking to make a second or supplemental income.

I am also not surprised that the average time for victims to report their scams is around 100 days; as we know with our clients, there is an unfounded element of shame and embarrassment as a result of being scammed. We encourage victims to come forward as soon as possible – there is no need to be ashamed – and speak to us to assess their options. As these figures show, scams are becoming increasingly common and victims should have no hesitation in coming forward for help.”