UK Bank Warns That Most Crypto Crimes Target Younger Investors
- Crypto crimes have surged by 23% in the UK between January and September 2023.
- Lloyd Bank claims that scammers have turned their attention to younger crypto investors.
- Most crypto crimes leverage social media and modern trends to sway their victims.
Lloyd Bank, one of the leading banks in the United Kingdom (UK), has warned of the growing rate of crypto investment crimes in the UK. The financial institution claims that crypto investment scams surged by 23% between January and September 2023.
Investment fraud occurs when someone tries to con you into purchasing stocks, bonds, or real estate, among other financial instruments. The Lloyds Banking Group, which is made up of Lloyds Bank, Halifax, and Bank of Scotland, recently conducted an investigation of scams and discovered that 66% of all investment scams originate on social media, with Facebook and Instagram being the most popular platforms.
Some popular tactics used by scammers on social media include sending direct messages to targets and posting fake ads and fake celebrity endorsements. Scam victims were losing, on average, roughly £10,741, according to Lloyds Banking Group. This number is an increase from the £7,010 average in 2022 and exceeds all other forms of consumer fraud, including purchase and romance fraud.
The organized crime groups behind these frauds frequently change their strategies and often leverage modern trends to sway their victims. Interestingly, the report found that scammers have turned their attention to younger investors in recent years, hoping to attract them with the glamour of crypto trading and its “get rich quick” potential.
Lloyd’s Bank’s analysis supports findings from a Coinbase report on cryptocurrencies, showing that younger Americans are more open than older generations to nontraditional paths to financial freedom, including cryptocurrency. However, scammers take advantage of this to defraud victims. Younger Americans, for example, see crypto as a new path to achieving the “American Dream.”
As per the report, victims of crypto scams are primarily from the 25–34 age group. Interestingly, this age group accounts for 25% of all victims. New crypto investors often make three payments on average before realizing they have been duped. Some investors wait months before reporting the crime to their banks. However, the bank usually cannot get the money back at such points.
Liz Ziegler, fraud prevention director at Lloyds Bank, said in the report:
Investing can be a great way to make money, but you need to make sure your money is going to a trusted, genuine company. Crypto is a highly risky asset class and remains largely unregulated, which makes it an attractive area for fraudsters to exploit. If something goes wrong, you’re unlikely to get your money back.
Lloyd Bank urged social media companies to help protect their users by stopping the crimes at the source and “contributing to refunds when their platforms are used to defraud innocent victims.”
The bank provided several safety tips that include protecting your payment methods and looking out for warning signs.