The FCA, UK"s financial regulatory body, posted a notice related to potential risks of online investment scams.
The FCA recommended investors be watchful to fraudsters promoting investment opportunities in binary options, contracts for difference (CFDs) and cryptocurrencies such as bitcoin.
The FCA given notice that retails investors are targeted by scammers via social media avenues such as Facebook, Instagram, WhatsApp, and Twitter, alternatively of by telephone, and are being attracted to spend by ensuring high income and associating the prospects to luxury goods such as luxury cars and watches. After someone invested, the prices distorted on their website, people are tied in with extreme pay-back demands and often customer accounts are closed arbitrarily as the fraudsters grab the cash.
The rise in these scams has affected the profile of the likely victims, too. Until recently, the group of people above 55s has been most vulnerable to investment fraud. Even so, the FCA"s most up-to-date study has discovered that persons aged under 25 were 13% more likely to have confidence in an investment approach they received via social media when compared with 2% for the over 55s. Overall, around 20% of the respondents to the FCA"s research stated that online customer opinions and testimonies boosted their confidence in a company or prospect.
The FCA has begun a ScamSmart promotion that induces people to test out its professional website to estimate whether a company is permitted or to gather information about whether an offer is probable to be fraudulent.
The FCA"s essential suggestions to consumers is:
Decline unrequested trade offers regardless of made online, on social media or on the phone;
check the FCA register in advance of investing
look at the FCA warning list of firms to avoid;
Receive impartial recommendation prior to investing.<