Cryptocurrency scams on the rise, victims conned out of up to €50,000

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FraudSmart warns of ‘get rich quick’ investment scams

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21 May 2021 | 0

FraudSmart has warned consumers of the rise in cryptocurrency investment scams, with victims being conned out of sums of money up to €50,000.

The fraud awareness initiative led by Banking & Payments Federation Ireland (BPFI) has released a list of red flags to look out for, as well as a checklist for consumers to avoid cryptocurrency scams.

Red flags include:

 

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  • Cold calls ie, receiving an unexpected telephone call/e-mail/social media message about a great investment opportunity
  • Being rushed/pressured into making a decision, with no opportunity or time to consider the investment opportunity.
  • There is a promise of a quick and profitable return on the investment with little or no risk

To avoid cryptocurrency scams, consumers should:

  • Stop and think: Does this opportunity sound too good to be true? If so it probably is
  • Research thoroughly: Check the individual and firm for qualifications, credentials, reputation and history
  • Verify the Information: Check all information with a trusted third party such a legal/financial professional and consult family and close friends
  • Take your time: Important to note that there are very few legitimate investment opportunities that require you to hand over or transfer money immediately

“There is currently a lot of hype around the benefits of investing and trading in digital currencies which has prompted much advertising by legitimate investment companies looking for new customers,” said Brian Hayes, chief executive, BPFI. “However, this has provided the perfect opportunity for fraudsters who are creating bogus companies offering fake ‘get rich quick’ crypto investment opportunities and promising big returns for little investment and effort.

“Member banks are reporting a large increase in digital currency scams in the last 12 months and we are aware of cases where customers have been conned out of as much as €50,000. In many cases this money can be people’s life savings the loss of which can have devastating effects. However, we are also aware of cases where customers are seeking to take out loans for these investment scams. Traditionally investment type scams are targeted at those over 55 who have retirement savings, however our members are now seeing an increase in cases among those in their 20s who have higher levels of disposable incomes due to the current pandemic.

“Victims tend to be cold called or lured by pop-up ads on social media which can often be accompanied by fake celebrity endorsements. The social media ads are linked to cloned websites which look genuine and offer big return on cryptocurrency investments which turn out to be bogus. Individuals actively seeking out alternative investment products are also being caught out as the fraudsters are very convincing and in all cases will create a sense of urgency and pressure not to lose out on a great deal.”

“Criminals will go to great lengths to persuade you they are knowledgeable and professional, offering you big returns for little investment and effort,” continued Hayes. “But remember, if a deal sounds too good to be true, it probably is. We are urging all consumers to take heed of our warning today and to seek professional advise before making investment decisions.”

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