£63m lost in social media-based investment scams over 2020/21

Over £63m was lost nationally to investment fraud across 5,039 reports that referred to a social media platform in 2020/21, according to Action Fraud.

Victims mentioned being approached directly by an investment fraudsters on social media or attracted to a fake investment through adverts, with Instagram being the most referenced platform (35.2 per cent), followed by Facebook (18.4 per cent).

More than a quarter (27.5 per cent) of all investment fraud victims who mentioned social media in their report were aged 19-25 and 61 per cent were men, while the average age of victims who reported investment fraud where social media played no part was over 50.

Almost half (44.7 per cent) of the reports of investment fraud stated that the fake commodity the victim had been scammed into investing in was a type of cryptocurrency.

Action Fraud warned that fraudsters commonly used social media influencers to carry out their scams, while also exploiting the brand image and reputation of well-known individuals without their knowledge and advertising bogus celebrity endorsements.

Five hundred investment fraud reports made between April 2020 and March 2021, leading to losses of more than £10m, made reference to a bogus celebrity endorsement.

Action Fraud also warned about the prevalence of cloned company investment fraud, where criminals duplicate the branding of legitimate and well known websites, while also noting that 8 per cent of all cloned company fraud victims had initiated contact with the suspect following a direct approach, or after seeing an advert, on a social media platform.

City of London Police’s National Fraud Intelligence Bureau superintendent, Sanjay Andersen, said: “Reports of investment fraud have increased significantly since the start of the coronavirus pandemic, which is unsurprising when you think the vast majority of us have had to conduct nearly every aspect of our lives on a computer or mobile phone.

“Being online more means criminals have a greater opportunity to approach unsuspecting victims with their scams. We would encourage anyone thinking about making an investment to do their research first. Visit the FCA’s website and check and double check every detail before handing over your money or personal details.”

The government has confirmed that it will be consulting on the role advertising can play in enabling online pension scams later in 2021, while a coalition of organisations has called on the government to include online scams in the upcoming Online Safety Bill.

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