LONDON – Lloyds Banking Group (LON:) has sounded the alarm over a significant increase in cryptocurrency investment scams, with a 23% surge reported this year compared to 2022. British investors have been particularly hard-hit by these fraudulent schemes, with average losses per victim climbing to £10,741, up from £7,010 last year.

Scammers have been leveraging social media platforms like Instagram and Facebook (NASDAQ:) to execute their frauds, accounting for 66% of all investment scams reported. These platforms have become fertile ground for tactics such as bogus ads, fake celebrity endorsements, and direct messaging campaigns that target individuals, especially those between the ages of 25 and 34. This demographic is often enticed by the allure of quick wealth through cryptocurrency investments.

Organized criminal groups are behind these sophisticated scams, continuously refining their approaches to exploit trends and deceive investors. Victims typically make approximately three payments over the span of 100 days from the first transaction before recognizing they’ve been duped. By this time, the chances of recovering lost funds are slim. Moreover, Revolut has been identified as the most common service for scam payments made by Lloyds Bank customers before the money is transferred elsewhere.

The issue is further compounded by victims having legitimate accounts on trading platforms like Coinbase (NASDAQ:) or Binance. These platforms’ relatively relaxed account opening procedures make it easier for fraudsters to establish accounts in the victims’ names or for victims themselves to be tricked into sharing login details or control of their digital wallets.

Liz Ziegler, Lloyds Bank’s fraud prevention director, has highlighted the high-risk nature of cryptocurrencies and their lack of regulation. She expressed concern over social media companies’ roles in facilitating these scams and criticized them for not doing enough to protect users or offer refunds when their platforms are used for fraudulent activities. The bank’s alert serves as a stark reminder of the dangers associated with unregulated investment opportunities and the importance of vigilance in online financial transactions.

InvestingPro Insights

InvestingPro’s real-time data provides additional insight into Lloyds Banking (NYSE:) Group’s financial performance. The bank’s market capitalization stands at a robust $32.08 billion USD as of Q3 2023. Its Price/Earnings ratio, a commonly used metric to assess a company’s valuation, is relatively low at 4.23, indicating that the bank’s shares may be undervalued. Furthermore, the bank has demonstrated strong revenue growth, with a rate of 38.49% over the last twelve months as of Q3 2023.

Turning to InvestingPro Tips, there are a couple of key points that align with the bank’s performance. Firstly, Lloyds has been able to raise its dividend for 3 consecutive years, a positive sign for investors seeking income. Secondly, the…