FCA Warns Investors about Potential Investment Scams Related to Cryptocurrencies

Latest data from Action Fraud has alarmed the Financial Conduct Authority (FCA) of the UK which has issued a public warning to investors. The FCA has asked investors to remain vigilant of investment scams, many of which are related to digital currencies. Last year, these scams made people lose 197 million pounds, at an average of 29,000 pounds for each instance.

Scams Are Looting the Citizens

Mark Steward, the executive director of enforcement and market oversight at the FCA that people make their financial plans in the first quarter of the year and they should be vigilant before investing their money. They should check if they are dealing with legitimate firms by referring the FCA register and the FCA Warning List

Pauline Smith, the director of Action Fraud, which revealed the damning data, suggests that fraudsters can do anything “to manipulate potential victims into making investments. 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.”

The Six-point Checklist

Scammers are using more sophisticated tools to target investors. They are using emails, social media and professional looking websites to get in touch with investors. Though the method of contact could be different, all of them use the same tactics to coerce investors. Financial expert Alvin Hall is educating the public about these issues. The FCA issued six warning signs to look out for before making an investment.

The six red flags are- unexpected contact, time pressure, social proof, unrealistic returns, false authority, and flattery. Scammers are offering bonuses, discounts and unrealistic investment returns to grab the attention of investors and providing them fake reviews and convincing literature to grab their money.

Hall writes that people should not only be confident about where they are investing but also about who they are investing with. The FCA is asking investors to reject any unsolicited investment offer, check the FCA register as well as the FCA Warning List before investing and get impartial advice.

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