Bitcoin price: Fraudsters using surge in cryptocurrency to trick people into scams, financial regulator warns – The Independent

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Bitcoin and other investments are being used to lure people into scams, the UK’s financial watchdog has warned.

Fraudsters are contacting people online and through social media to offer them the chance to invest in cryptocurrencies and financial instruments. The solicitations often promise high returns and come alongside pictures of expensive watches and cars in an attempt to entice people to invest.

But any money investors hand over might then got locked up, with fraudsters changing prices on their website, forcing people to pay out extreme amounts of money to get their investment back or just take it and refuse to pay it back.

The rise of bitcoin’s price and the interest in buying it has also led to an increase in the number of people trying to rip off prospective investors. The Independent’s guide to buying bitcoin – and not getting scammed – can be found here.

The head of the FCA has already warned bitcoin investors that do end up buying the cryptocurrency legitimately that they should be prepared to “lose all their money”.

As part of the new warnings FCA said figures show investors lost £87,410 per day to binary options scams last year in the UK. Binary options allow people to make a bet on the expected value or price of something that can be measured in financial terms, such as a stock, commodity, currency or index.

On January 3, binary options became a regulated investment product, meaning all firms trading in binary options will need to be authorised by the FCA.

Scammers can create highly professional-looking online websites featuring fake customer reviews, logos, and statements, to lure in prospective investors.

The FCA said a rise in people being targeted online means the profile of investment scam victims is changing.

While over-55s have been more at risk of investment fraud in the past, research carried out as part of the FCA’s ScamSmart campaign suggests under-25s could be particularly susceptible to this type of fraud.

Those aged under 25 were six times were found to be six times more likely to trust an investment offer they received via social media, compared with over-55s.

Mark Steward, director of enforcement at the FCA, said: “As people have become more sceptical of investment-related cold calls and consumer habits have changed, we have seen investment fraud moving online and to social media.

“While their websites and profiles appear to be professional, they are all too often run by fraudsters who fix prices and pay-outs, or in some instances don’t really place trades at all, before disappearing with innocent investors’ money.

“Before investing online, check you know who you are really dealing with and check if they are authorised by the FCA. Find out how to avoid scams on the ScamSmart website and, if in any doubt, don’t invest.”

TV presenter Nick Hewer, who is supporting the campaign, added: “The amount being lost every day to online investment fraud, such as binary options scams, is staggering.

“It’s vital for all those on social media to be extra cautious about engaging in any conversations or with adverts that relate to quick-wins or guaranteed returns, especially with individuals or companies you do not know.

“Remember, if it sounds too good to be true, then it probably is. If you are offered an attractive investment out of the blue, be suspicious, check the FCA’s Warning List and seek impartial advice.

“Better still, if you get an email or message about an investment from someone you don’t know, just delete it.”

Here are the FCA’s top tips for avoiding investment fraud:

– 1. Reject unsolicited investment offers whether made online, on social media or over the phone.

– 2. Before investing, check the FCA Register to see if the firm or individual you are dealing with is authorised and check the FCA Warning List of firms to avoid.

– 3. Get impartial advice before investing.

Additional reporting by agencies

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