Cryptocurrency Accounts for
66% of Fraud Reports

Cryptocurrency scams are a type of investment fraud and fall under the broader umbrella of Authorised Push Payment (APP) fraud.

Broadly, investment scams deploy clever social engineering tactics to trick or persuade victims into making a payment or ‘investment’ on the promise that they will receive lucrative returns. The victim usually ‘authorises’ the payment, with money transferred directly from their bank account to the scammers.

Cryptocurrency can be traded digitally, just like stocks and shares, but it does not physically exist. Many who choose to invest in cryptocurrency hope for rapid or high returns on their investments, however this is not guaranteed, and crypto trading can be incredibly complex.

Although Action Fraud has not explicitly said why 55 to 64-year-olds lost the most money, this age group may:

• Have more disposable income or savings available to ‘play’ with
• Want to ‘top up’ savings or pensions quickly, swayed by the promise of high returns
• Be less tech savvy or aware of common scam tactics
• Be more easily targeted by impersonation scams featuring well-known names like Martin Lewis

The report also highlights a need for greater awareness of fraudulent activity on social media websites, particularly for those losing the most money to scammers. WhatsApp, the most used platform by scammers, appeared in 40% of scam reports. This was followed by Facebook (18%) and Instagram (14%).

Crypto scams can start in many different ways, from texts to phone calls, however, social media is currently the biggest platform used by the scammers. If you have been contacted out of the blue by an individual or company promising investments with high returns, this should raise suspicions – if the crypto investment appears to be too good to be true, then it probably is.

Fraudsters often aim to earn the trust of their victims. They sometimes use tactics such as posing as an authoritative figure, like the police or your bank.

Other common warning signs of cryptocurrency fraud include:

• Being put under pressure to make urgent, impulse or fear-based decisions within a short space of time
• Demands for increasing amounts of money with increased urgency
• Encouraging individuals not to tell family or friends
• Fake domain names and social media accounts with subtle errors that do not match official websites
• Coaching the victim to lie about the purpose of a money transfer or to ignore scam warnings on banking apps

Many people feel embarrassed when they realise that they have been scammed, but the Action Fraud data shows just how common APP fraud is, and help is available.

If you believe that you or a loved one have been scammed, contact your bank or crypto wallet provider immediately. Ensure you do this through their legitimate website or phone number, which should be listed on your bank statements. You can also use the 159 Fraud Helpline, which will link you to your bank. Your bank should carry out an urgent investigation.

You should also report the fraudulent activity to Action Fraud which in turn could trigger a criminal investigation.

It is important to know your rights when it comes to compensation. In October 2024, the government placed more onus on banking and financial institutions to prevent fraud and reimburse customers quickly. Banks must generally investigate and reimburse eligible APP fraud victims within five working days.

If your bank refuses to pay compensation, for example it does not recognise that you have been the victim of APP fraud, then you can make a complaint to the Financial Ombudsman Service (FOS). FOS is an independent, government-backed body that settles disputes between financial institutions and their customers, including where appropriate, awarding compensation.

Sarah Spruce, Legal Director at TLW Solicitors, commented:

“Although the overall number of reported fraud cases was down by 7 per cent from 2023, the total amount victims lost rose by 12 per cent. This alarming figure shows that the scale and complexity of fraudulent operations are only getting bigger. Cryptocurrency scams account for a large majority of these.

Social media, once again, has been highlighted as a major tool for fraudsters, connecting them with vulnerable groups. More must be done by social media platforms, not only to raise awareness of the signs of fraud but also to stop the fraud on their platforms altogether.

If you have been a victim of APP fraud, please know you are not alone, don’t be afraid to come forward and seek help. Get in touch with our specialist fraud advisers to find out how we can help you progress a compensation claim on a no-win, no-fee basis.”