The UK is one of the most prevalent targets for online crypto scams, with countless victims losing money every year. New research from the prominent retail and commercial bank Santander UK shows that these incidents are on the rise. The report from the UK branch of the international financial services group highlights just how serious this escalating threat has become.
Celebrity Endorsement Crypto Scams in the UK
The specific type of scam detailed in the report revolves around fake celebrity endorsements. This type of scam is widespread in the UK and other countries, finding victims through social media and other websites.
Ads featuring fake celebrity endorsements attach a familiar face to crypto scams masquerading as legitimate investment opportunities. When social media user follows these ads, they find themselves directed to seemingly legitimate investment websites. However, they never receive anything in return for the money they send to the scammers.
The ads use the names and images of a variety of UK celebrities, including British billionaire Richard Branson and notable money advice guru Martin Lewis. Lewis had previously brought a lawsuit against Facebook for the fake ads found on the platform, eventually settling when Facebook offered to improve moderation and donate to anti-scam organizations.
Above we can see a fake news article which was used for a trading system named Immediate Edge. This picture illustrates exactly how celebrities are used. This time it’s Jeremy Clarkson, and according to a website named ScamCryptoRobots.com this trend is only “increasing in popularity” with scammers.
The UK has made changes to the proposed Online Safety Bill to deal with these types of scams more effectively. Changes could see social media platforms and search engines become more liable for their part in hosting fraudulent ads. The rising number of scams shows just how important these efforts are to protect consumers in the future.
Crypto Scams on the Rise in the UK
The recent report from Santander shows a clear trend in the growth of fake celebrity endorsement crypto scams. In many cases, these scams are highly aggressive. Once victims sign up for the fraudulent investment platforms, sales representatives use pushy tactics and frequent calls to try to get every last bit of money that they can.
According to Santander, the average loss in these types of scams during the first quarter of 2022 was £11,872. That’s up 65% compared to the same quarter last year. This shocking figure shows that people are losing substantial amounts, often from their retirement savings. This kind of loss can be incredibly harmful to the average investor.
Not only are scammers taking more from each of their victims, but they’re also reaching more victims than ever before. The first quarter of 2022 saw a 61% increase in the number of cases over the fourth quarter of 2021. This drastic uptick in case numbers shows that the efforts currently in place to prevent these scams simply aren’t doing enough.
The report also provides advice for consumers on how to identify and avoid these types of scams. Any celebrity endorsement found online should be taken with a grain of salt because you can’t be sure whether or not they’re legitimate. Investors should also avoid investment opportunities that seem too good to be true and should remain wary of aggressive sales tactics. Santander also encourages anyone who notices such a scam to report it to the FCA.
The Future of Cryptocurrency Scams in the UK
Based on the numbers they’re seeing today, Santander estimates that there will be an 87% increase in the number of cases in 2022 compared to 2021. This near doubling of cryptocurrency scams shows that the problem is getting worse, not better.
The UK is in need of action to solve this problem and protect consumers from online crypto scams. The Online Safety Bill could provide additional protection but is still widely debated in the government and is unlikely to make any progress forward at all for months to come.
New technological solutions are also being used to target the websites that scams point to. The UK currently has measures in place to target a wide range of fraudulent investment websites, including those claiming to offer cryptocurrencies.
As pressure continues to mount on Facebook and other social media platforms, it appears that they may have to play a significant role in stopping these ads. Legislation, lawsuits, and public pressure are all pushing the fake celebrity endorsement crypto debate in a direction that places the blame squarely on social media.