June 25, 2024

Barclays is encouraging social media platforms to be more vigilant in verifying financial adverts, as instances of investment scams have escalated by 29 percent.

Under the umbrella of the Online Fraud Charter, Barclays advocates for swift action from social media platforms to enhance the verification process of financial advertisements, given that investment scam activities soared by nearly one-third in 2023. This sharp rise also corresponds with the highest volume of losses incurred by scammers from Barclays’ current account customers.

Diving Deeper Into the Announcement

Making up around 33% of all losses to scams, investment scams alone witnessed a year-on-year surge of 23%. As per scam categories, investment and financing frauds accounted for the lion’s share of total claim values. With a near third or 29% increase, the overall volume of investment scams has significantly intensified. The average investment fraud claim exceeded GBP 14,000, further escalating to over GBP 16,000 for men.

About one-fourth of individuals aged between 18-34 came across a suspected investment fraud on social media, and closely 20% were approached on these platforms regarding a supposed investment opportunity. These frauds are proliferating driven by scammers exploiting unverified financial adverts on social media. Concurrently, over 61% of investment frauds now occur on these platforms.

As per the official press announcement, scammers typically coerce their victims into making a small initial investment, promising high returns funded by other victims’ money. This ploy convinces the victim that the investment is genuine, often leading to substantial losses over time.

According to data from the FCA’s customer helpline underlining the need for due diligence, calls regarding investment scams have dramatically surged by 193% over the past five years. The analysis further displays that investors saved approximately GBP 2 million by recognizing fraudulent investment possibilities through detecting misspellings, grammatical errors, formatting blunders, or suspicious requests for personal data.

In light of the fact that a majority of investment scams now occur on their sites, social media platforms must shoulder their responsibility to shield their users. They must uphold their commitments and develop a sound verification procedure to prevent customers from falling prey to scammy investment adverts.