Lloyds Bank Warns of Rising Crypto Scams
Lloyds Bank, one of the leading banks in the United Kingdom, has reported a significant increase of 23% in crypto scams compared to the previous year. The bank has issued a warning stating that fraudsters are specifically targeting young individuals through social media platforms, causing victims to lose an average of £10,741 ($13,183.72) per scam. This staggering amount surpasses losses incurred due to romance scams, purchase scams, and other forms of consumer fraud.
In a recent press release, the bank shared the alarming finding that 66% of all investment scams originate from social media platforms, with Instagram and Facebook being the most common sources. Fraudulent activities range from fake advertisements and celebrity endorsements to direct messages enticing unsuspecting individuals. Lloyd’s Bank noted that scammers have adapted their tactics to target individuals between the ages of 25 and 34, who are particularly attracted to get-rich-quick schemes.
The Rise of Sophisticated Scams
This particular age group represents a quarter of all crypto scam cases. Detecting such scams during the occurrence has proven to be challenging, as victims typically make three payments and wait for approximately 100 days before reporting the fraud to their bank. Unfortunately, by this stage, recovering the stolen funds becomes extremely difficult.
Lloyd’s Bank highlights two main forms of crypto investment scams. The first is known as “the illusion,” where scammers pose as investment managers, promising to generate profits on behalf of the victim using their money. These scams may even show victims a fake investment account displaying growing profits after the initial payment, encouraging them to send more money to the scammer.
The second type of scam is referred to as “the takeover.” In this scenario, scammers deceive victims into creating cryptocurrency accounts on popular trading platforms like Coinbase and Binance, tricking them into surrendering their login credentials. Alternatively, victims may be manipulated into relinquishing control of their personal crypto wallets or directly sending cryptocurrency to the scammer.
“Remarkably, the analysis found that 66% of all investment scams start on social media – with Instagram and Facebook the most common sources.” – Lloyds Bank
Fraud Prevention Director at Lloyds Bank, Liz Ziegler, emphasizes the need for individuals to remain vigilant and exercise caution when engaging with cryptocurrency investments. Ziegler urges individuals to thoroughly research investment opportunities, verify the legitimacy of investment managers, and be wary of schemes promising quick and guaranteed returns.
