Crypto scam checks on the FCA's ScamSmart website rose by 49% in the period April to September 2021, according to data released by UK's Financial Conduct Authority today (3 March).
Overall scam enquiries rose by a third, year on year, while the FCA stopped one out of four new firms applying to enter the market between April and September 2021.
Laith Khalaf, head of investment analysis, AJ Bell, said: "Last year was boom time for cryptocurrencies, and for suspicious crypto marketing campaigns as well. There was a big spike in consumers checking the FCA's Warning Tool after being approach with a cryptocurrency investment opportunity which no doubt sounded too good to be true.
"There was a similarly large rise (49%) in consumers checking on companies offering pension transfer services, which suggests that the pension scam market is alive, well, and thriving. The FCA also stopped a quarter of new firms trying to enter the consumer investments market, which shows there are plenty of inadequate or inappropriate businesses attempting to sell their wares to UK investors.
"Scam activity is not new, but it does appear to be increasing in scale, and embracing new forms of digital communication. Almost one in five (19%) of FCA ScamSmart users reported hearing about potential scams through social media adverts, and 4% were actually directly approached on social media. That's not to say traditional forms of hard selling have disappeared though, with a large number of people still hearing about potential scams on the phone or through friends. The vast network of information channels now used by consumers simply amplifies the opportunity for scammers and heightens the risk of scam activity.
"Investors in today's world do need to be watchful, and not let down their guard because they think they're too smart to be conned. Scammers are adept at targeting consumers with appealing messages at a time when their defences might be lowered. As ever it makes sense to invest with robust, trusted businesses who are registered with the FCA, and if you are approached out of the blue with an offer that sounds too good to be true, alarm bells should be ringing."
