Director of Action Fraud, Pauline Smith said: “It’s vital for anyone who invests or is thinking of investing in cryptocurrencies to thoroughly research the company they are choosing to invest with.
“The statistics show that opportunistic fraudsters are taking advantage of this market, offering investments in cryptocurrencies and using every trick in the book to defraud unsuspecting victims.”
Generally speaking, fraudsters tend to target would-be investors with get-rich-quick schemes which promise high returns in a short period of time.
Thanks to the buzz around cryptocurrencies, many are taken in by the scams and end up losing money.
These types of scams are generally referred to as ‘exit scams’ wherein scammers intice would-investors to donate to their cause before promptly disappearing with everyone's money.
Indeed, Action Fraud issued the below statement re the scams:
Action Fraud is warning the public about fraudsters advertising ‘get rich quick’ investments to scam people out of money.
The latest statistics from Action Fraud show that in June and July, victims reported losing £2,059,501.29to cryptocurrency scams – an average of £10,095.59 per person.
In the same period, 203 reports of this type of fraud were made to Action Fraud.
How is this happening?
Fraudsters are cold calling victims and using social media platforms to advertise ‘get rich quick’ investments in mining and trading in cryptocurrencies.
Fraudsters will convince victims to sign up to cryptocurrency investment websites and to part with their personal details such as credit card details and driving licences to open a trading account. The victim will then make an initial minimum deposit, after which the fraudster will call them to persuade them to invest again in order to achieve a greater profit.
In some cases, victims have realised that they have been defrauded, but only after the website has been deactivated and the suspects can no longer be contacted.
Between 1 June 2018 and 31 July 2018, 203 reports of fraud involving cryptocurrency were reported to Action Fraud. The total reported loss was £2,059,501.29.
In April 2018, Action Fraud alerted the public to fraudulent websites claiming to offer cryptocurrency investments using images and fabricating recommendations from prominent individuals without their consent.
Director of Action Fraud, Pauline Smith, said:
“It’s vital for anyone who invests or is thinking of investing in cryptocurrencies to thoroughly research the company they are choosing to invest with.
“The statistics show that opportunistic fraudsters are taking advantage of this market, offering investments in cryptocurrencies and using every trick in the book to defraud unsuspecting victims.
“If you think you have been the victim of this type of fraud, contact Action Fraud.”
Fighting cryptocurrency fraud
As more and more people invest their money in cryptocurrencies, this surge in popularity has also given rise to more fraud in this area. In response to this and in a UK first for police training, the City of London Police’s Economic Crime Academy (ECA) has recently launched a new course on cryptocurrencies.
Developed by the ECA together with subject matter experts in the City of London Police’s Economic Crime Directorate, the new one-day course Cryptocurrencies for Investigators is designed to give officers the skills and knowledge to recognise and manage cryptocurrencies in their investigations.
Don’t be fooled
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.
Don’t be rushed or pressured into making a decision – a genuine bank or financial organisation won’t force you to part with your money on the spot. Always be wary if you’re pressured to invest quickly or promised returns that sound too good to be true.
Stay in control – avoid uninvited investment offers, especially those over cold calls. If you’re thinking about making an investment, get independent advice and thoroughly research the company first.
Every Report Matters – If you have been a victim of fraud or cyber crime, report it to Action Fraud.