Reports about this type of fraud more than tripled in 2018/19 to 1,834 from just 530 the year before, the Financial Conduct Authority (FCA) said.

Con artists often use social media to promote their ‘get rich quick’ online trading platforms.

Their posts regularly include fake celebrity endorsements and images of luxury items like expensive watches and cars. They then link to a professional-looking website where consumers are persuaded to invest.

Investors are led to believe that their first investment has successfully made a profit.

The fraudster will then contact the victim to invest more money or introduce friends and family with the false promise of greater profits. However, eventually the returns stop, the customer account is closed and the scammer disappears with no further contact

Mark Steward, executive director of enforcement and market oversight at the FCA, said: “We’re warning the public to be suspicious of adverts which promise high returns from online trading platforms.

“Scammers can be very convincing so always do your own research into any firm you are considering investing with, to make sure that they are the real deal.”

Laura Suter, personal finance analyst at investment platform AJ Bell, said: “Cryptocurrency is a scammers’ paradise, as many people ‘investing’ in these assets do little research and are sucked in by the promise of supersized returns in an impossibly short space of time.

“Using social media and the lure of expensive products to draw people in, scammers have made a fortune off their victims.

“Anyone handing over their hard-earned cash should make sure they understand what they’re getting into, they’ve checked it’s a legitimate investment, and not rely on hype and excitement from friends or social media.”

How to stay safe

The FCA and Action Fraud have published the following tips to protect people investing online:

• Don’t assume it’s real– professional-looking websites, adverts or social media posts don’t always mean that an investment opportunity is genuine. Criminals can use the names of well-known brands or individuals to make their scams appear legitimate.
• Stay in control– avoid uninvited investment offers whether made on social media or over the phone. If you’re thinking about making an investment, thoroughly research the company first and consider getting independent advice.
• Make the right checks – Firms providing regulated financial services must be authorised by the FCA. You can check whether they are authorised on the FCA’s Register. Use the contact details on the Register, not the details the firm gives you, to avoid ‘clones’.
• Every report matters– If you have been a victim of fraud or cyber crime, report it to Action Fraud.