The UK’s Financial Conduct Authority (FCA) is urging investors to be alert to the growing threat of online fraud.
Fraudsters are increasingly reaching would-be targets via social media channels, and are particularly targeting investments in binary options, contracts for difference (CFDs), forex and cryptocurrencies such as Bitcoin.
The British regulator estimates that an average of £87,410 is lost every day to binary options scams. 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 authorized by the FCA. Find out how to avoid scams on the ScamSmart website, and if in any doubt – don’t invest.”
The FCA recommends potential investors follow three basic steps to minimize their likelihood of falling victim to scams:
1. Reject all unsolicited investment offers online, via 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 authorized and check the FCA Warning List of firms to avoid.
3. Obtain impartial advice.