Fraudsters targeting through social media
Britain’s financial watchdog has warned the public of the growing threat of online investment fraud after it found unsuspecting consumers being lured into buying fraudulent investments through portals like Facebook, Instagram and Twitter.
The Financial Conduct Authority (FCA) said common schemes involved complex trades in binary options, foreign exchange or cryptocurrencies like Bitcoin. The scammers are reportedly inducing people by offering investments with the promise of high returns and luxury gifts as inducements.
The regulator also said that those under 25 were six times more likely to trust an investment offer they received via social media, compared with those over 55.
The FCA revealed how investors lost £87,410 per day to binary options scams last year in the UK. From January this year, binary options, which allow investors to make bets on the expected value or price of a stock, have become a regulated investment product and will need to be authorised by the watchdog.