Digital Fraud Tracker: Crypto Scams Increased in UK Last Year

The U.K.’s Financial Conduct Authority (FCA) was busy in 2021 when it came to keeping the cryptocurrency space safe, not only fighting off money laundering efforts in the sector but also tracking an increase in scams that targeted consumers who use digital currency.

About 3,000 of the almost 16,400 possible scam reports fielded by the FCA between April 2021 and September were related to cryptocurrency, with the most-reported type of scam involving bad actors trying to push their targeted consumers to buy worthless, overpriced or non-existent shares or bonds over the phone.

Crypto-related scams were the second-most popular type reported last year, reaching their highest level in June. Reports of cryptocurrency scams rose 14% from the six months between September 2020 and March 2021.

Those spiking numbers also boosted concern among U.K. consumers that they would become victims of scammers themselves. Use of the FCA’s ScamSmart Warning List — which consumers can use to check whether a purported investment opportunity has been flagged as a scam — rose 49% from the previous six-month period, making it the most checked item on the list.

Those are just a few of the many findings in the April edition of the Digital Fraud Tracker®, in which PYMNTS, in collaboration with DataVisor, examined the measures being taken to make cryptocurrency more secure and accessible to help drive mainstream adoption.

Read more: Wirex Says Consumers’ Crypto Concerns Must Be Addressed to Increase Adoption

Meanwhile, a survey of U.K. consumers showed that financial institutions (FIs) could lose customers if they can’t “create a balance between robust security protocols and user experience,” according to the Tracker. The problem is exacerbated by consumers’ lack of awareness when it comes to the technical sophistication of some forms of fraud, PYMNTS research showed.

More than one in four U.K. consumers (26%) are concerned about account takeovers and scammers opening fake accounts in their names, but only 6% were worried about authorized push payments fraud or being tricked into sending payments to a fraudster.

Respondents said they would consider switching their FIs if their security protocols were too strict, with almost one in five (19%) saying their biggest FI pet peeve was when fraud prevention systems block legitimate purchases, while 35% said they would switch providers if an online transaction was declined incorrectly at least three times.

And, while 86% of U.S. consumers know about cryptocurrency, its ownership and use are much lower, with 16% of survey respondents saying they have invested in, traded or otherwise made use of digital currencies.

Almost two out of five U.S. consumers (38%) said they think cryptocurrency will have widespread acceptance for increasing numbers of financial transactions within a decade.

“This growing interest also means more opportunities for scammers,” the Tracker stated. “Growth in digital fraud is nothing new, but cryptocurrency fraud is unique by virtue of the combination of technologies and irreversibility involved in most protocols.”