A leading high street lender has urged social media users to beware of cryptocurrency fraud after predicting a double-digit year-on-year surge in celebrity-endorsed cases in 2022.
Santander claimed this week that there was a 61% increase in the number of cases it dealt with between Q4 2021 and Q1 2022, with the average cost of such scams increasing 65% year-on-year in the first quarter to reach £11,872.
It warned of an 87% surge in cases by the end of 2022 compared to 2021 figures, with users typically tricked into investing in fraudulent schemes by spoofed celeb endorsements online.
According to Santander, crypto scam ads might be posted on social media and legitimate media websites or appear in online search listings.
Once users click through and share their personal details, they could be contacted by phone, email or a social media message and offered high returns with little to no risk. Scammers typically employ high-pressure sales tactics at this stage.
Once the money is deposited, the scammers will freeze the account and steal the funds, according to Santander. They’ll gain access by tricking the victim into downloading remote access Trojan (RAT) software, allowing them to hijack the user’s computer, it added.
“We’re seeing a worrying rise in ‘celebrity-endorsed’ cryptocurrency scams, where familiar faces are being misused on social media in order to con people out of often life-changing sums of money,” warned Santander head of fraud risk management, Chris Ainsley.
“Rather than revelling in the promised high returns, people are losing significant sums after being duped by these highly sophisticated criminals. Always do your homework and thoroughly research any investment opportunity before moving any money – irrespective of who is endorsing it.”
Feedzai fraud expert, Daniel Holmes, argued that industry collaboration would be needed to tackle the rise in crypto scams.
“Ultimately, it comes down to user awareness, banks and their ability to spot/stop fraud quickly and crypto platforms who need to protect themselves from becoming mules or risk facing crushing regulatory repercussions,” he added.
“Collaboration between these groups is the most important first step to keep this emerging market secure for all sides.”