Revolut has emerged as the most frequently targeted recipient of Faster Payments made by victims of cryptocurrency investment scams at Lloyds Banking Group, which has reported a significant increase in get-rich-quick advertisements on social media.
The bank indicates that the number of cryptocurrency investment scams reported this year has risen by 23% compared to the same period in 2022. Victims of these scams have lost an average of £10,741, marking it as the highest loss among various consumer fraud types.
Analysis shows that 66% of all investment scams originate from social media, primarily on Instagram and Facebook. These scams often include a combination of fraudulent advertisements, fake celebrity endorsements, and direct messages designed to entice potential victims.
Individuals aged 25 to 34 are the most common targets for crypto scams, accounting for a quarter of all reported cases. Typically, would-be investors make around three payments before realizing they are victims of a scam, which averages about 100 days from the first transaction to reporting the fraud to their bank. Unfortunately, by this time, the funds are usually irretrievable.
Lloyds Bank customers frequently direct their scam payments to Revolut, which acts as an intermediary before the funds are transferred elsewhere. In some instances, victims may have an investment account in their name on legitimate platforms like Coinbase or Binance. They might either be guided through the setup process or have the account opened for them, as many trading platforms conduct minimal checks during account creation.
Once the funds are deposited, victims can be misled into sharing their account login credentials or relinquishing control of their digital wallets to the fraudster.
Liz Ziegler, the fraud prevention director at Lloyds Bank, stated: “Crypto is a highly risky asset class and remains largely unregulated, making it an attractive target for fraudsters. If something goes wrong, it’s unlikely that you’ll recover your money.”
She further emphasized that social media platforms are a significant breeding ground for these scams, relying on a mix of false ads, fake endorsements, and cloned accounts as key tactics. “It’s time for these tech firms to take responsibility for protecting their customers, proactively preventing scams, and contributing to refunds when their platforms facilitate fraud against innocent victims.”