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FCA warns that investment scams are increasing in the UK via online means of trading platforms and social media sites. People, as well as business entities, are being increasingly targeted by fraudsters who are offering foreign exchange trade and crypto-assets contracts like bitcoin. These fraudulent offers are mostly promoted by social media platforms.
Fraudsters manipulate people by offering high profits and use fake and enticing visual aids to get people to invest in their scams. Their advertisement seems like professional-looking sites leaving the impression of legitimacy and people end up investing. Investment is done through managed accounts where trade is done on their behalf or it can be done through the firm’s platform. They even create private relations with the victims to guide them about investment opportunities.
Sometimes these fraudulent firms return some amount of money to make it look like profits and to show that the trading was successful. Through this, victims are encouraged to invest more and even publicize this with their friends and families who end up investing as well. After a while, when the victim has invested enough money, the return stops and the victim’s account is suspended.
Many fraudulent firms are located in the UK and they claim to be authorized by the financial regulatory authorities like FCA. This gives the impression of legitimacy and the victim does not try to take more precautionary measures.
These types of scams have become quite a concern for FCA. However, FCA cannot control social media companies to remove such scams. FCA has spread awareness about these scams among people as well as businesses to remain vigilant. If anyone finds such scams on social media, they are required to immediately report to the authorities so FCA can take action against such fraud. Social media platforms can play a huge role by having proper business verifications to identify such fraudulent firms.