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Nearly £200m lost to fraud in British forex markets, crypto and more

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forex market with British flag and down arrow Official figures out of Britain show that a sum of around £197 million pounds was lost in the country last year as a result of investment scams.

According to a statement from the Financial Conduct Authority and Action Fraud, there was a distinctive shift towards internet-based scamming as the year went on, and that old fashioned scam artist techniques were going out of practice.

Whereas scammers may have once used telephone calls to persuade people to part with their cash, it’s now more and more common for internet-oriented methods, such as scam emails, to be used instead.

According to one statistic released, well over half of those who went to the FCA to check its directory of potential scammers in 2018 were doing so after having spoken to a scammer on the internet.

The exact figure, 54%, was up from 45% the year before.

The figures were also broken down to the level of individual averages. It is believed that on average each victim lost £29,000.

It is also believed that the asset classes in question are changing, and that certain ones are becoming more and more over-represented in the scam field.

Foreign exchange market fraud and cryptocurrency fraud came into particular focus, and when the impacts of share and bond fraud were added in, it was calculated that the three types were responsible for around 85% of schemes believed to be investment scams.

In a statement, Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said that the organisation needed to publish almost 400 warnings about firms which posed a fraud risk over last year.

“Investment scams are becoming more and more sophisticated and fraudsters are using fake credentials to make themselves look legitimate”, he said.

“The FCA is working harder than ever to help protect the public against this threat. Last year we published over 360 warnings about potentially fraudulent firms. And we want to spread the message so we can all better protect ourselves from investment scams.”

Pauline Smith, Director of Action Fraud, added that there was a knock-on effect on the “wellbeing” of victims of investment scams.

“These statistics show that investment fraud is a major threat, with fraudsters doing everything they can to manipulate potential victims into making investments”, she said.

“Victims are often coerced or persuaded into parting with significant amounts of money and this can have a devastating impact on their wellbeing and finances”, she added.

This study is not the first to reveal the risks of internet fraud in the UK’s forex and crypto markets.

Around this time last year, Action Fraud released a statement outlining just how common so-called binary options fraud – which often focuses on forex and crypto – was.

It is believed, for example, that investors lose on average £87,410 per day as a result of this kind of fraud.

“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”, Action Fraud advised at the time.