The Financial Conduct Authority (FCA) of the UK has warned investors of numerous scams arising because of the Coronavirus threat. Maltese market regulators are also making similar warnings.
Fraudsters are taking advantage of coronavirus
The regulators informed investors that fraudsters of taking advantage of the coronavirus scare and trying to scam investors. The watchdog noted in a statement,
“Scammers are sophisticated, opportunistic and will try many things. They are also very likely to target the vulnerable. Beware of investments that appear to be too good be true. If you decide to invest in something offering a high return or in a crypto asset, you should be prepared to lose all your money.”
The scams are being spread through email inboxes of British people which may be soliciting funds for insurance policies, pension transfers and high-return investment opportunities in instruments like cryptocurrencies. The watchdog noted that it has witnessed a significant rise in the number of queries related to cryptocurrencies in recent times. Most of these queries are related to scams. This rise shows that Bitcoin and other cryptocurrencies have remained a popular investment vehicle amongst users despite facing a crushing bear market throughout 2018.
It also noted that hackers could be stealing the background information of users and trying to take advantage of trending topics in the news, like the coronavirus to fool people.
Fraudsters use sophisticated tricks
Scammers typically use special software to create genuine-looking messages for their users. They then send emails to the user and direct them to new websites designed to trick them into clicking malicious links. These links are generally disguised as helpful resources. Sometimes, these fraudulent websites steal sensitive information from the users and utilize them later to commit fraud.
Such a scam was unearthed by the regulator recently when it warned users of fake emails with the subject lines ‘FCA Business Update,’ ‘Overdue Balance,’ or ‘Blacklisted FX firms.’ The emails were designed to look like they were sent from email@example.com and firstname.lastname@example.org.
The Malta Financial Services Authority (MFSA) has also warned the local parties that the COVID-19 pandemic has created a perfect opportunity for scammers. It pointed out a new wave of fraudulent activity that capitalizes on the global health crisis and tries to steal information and money from the users. It alerted investors to ensure that they are working with reliable entities before entering into any business activity.