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Fraud guide

Investment and Cryptocurrency Scams 

How this page can help you
What are investment scams?
Cryptocurrency
Common investment scams
Things to look out for
What to do if you're caught out
Other useful links

What are Investment Scams?

Investment scams are one of the many ways criminals try and steal your money. They try to convince you to invest in a scheme, shares, or commodities, which either don’t exist, or aren’t worth the money paid for them. These scams are becoming increasingly common and can take a variety of forms, so it's really important you know how to spot them.

FCA ScamSmart

If you are considering an investment be sure to visit the FCA’s ScamSmart investor page before you do. 

It only takes a few moments to complete the ScamSmart investor questions but it could pay major dividends if you spot a scam before parting with your money.

FCA ScamSmart

Investment scam types

Cryptocurrency

Cryptocurrency is a digital asset that can be traded or exchanged online to buy from people or companies who accept this form of payment.

Cryptocurrency isn’t protected by the UK’s Financial Services Compensation Scheme (FSCS) and most aren’t regulated by the Financial Conduct Authority (FCA). However, it’s attracting more attention as a potentially lucrative investment option due to the fluctuations in value seen over the past few years.

Cryptocurrency investments are often made via currency exchange platforms.  These are websites where you can buy, sell or exchange cryptocurrencies for other digital currency or traditional currency like US dollars or Euros.  For those that want to trade professionally and have access to trading tools, you will likely need to use an exchange that requires you to verify your ID and open an account or a ‘wallet’. 

Cryptocurrency Investment scams

Scammers are capitalising on the growing attention cryptocurrency is attracting, by offering fake investments that don’t really exist or aren’t worth the money.

  • By advertising on social media – sometimes using fake endorsements and images of celebrities or public figures – scammers promote these investment opportunities. The ads link to professional-looking websites to persuade you  to invest using cryptocurrencies or traditional currencies. 
  • Scammers can manipulate software to distort prices and investment returns and may even scam people into buying non-existent crypto-assets. The firms operating these scams are usually based outside the but will claim to have a presence.  
  • You should always have sole control of your cryptocurrency ‘wallet’ and nobody else should have access.  If you didn’t set the wallet up yourself or can’t access the money there this is likely to be a scam.  You should stop making payments right away and get in touch with us.

Before making any investments using cryptocurrency always make sure you understand everything completely and you’re only using money you could afford to lose

"Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money. If consumers invest in these types of product, they should be prepared to lose all their money”  FCA warns consumers of the risks of investments advertising high returns based on cryptoassets | FCA

Other common investment scams

Whilst it's really important to be cautious of any approach asking you to invest, the below are some of the more common scams we see. 

Cloned Firm Investment Scams

Cloned firms are the criminal’s way of getting past the due-diligence and authentication checks it’s expected people will undertake, before making an investment.  By pretending to be a legitimate firm the potential investor will get a positive response when they:

•       Check the firm is regulated by the FCA

•       Investigate online reviews on the company

•       Receive legitimate looking documentation

Criminals are aware ‘cold calling’ tactics are widely warned about now and have moved on to other methods to find their next victims. For example, they may host fake comparison sites that give the impression you found the investment yourself, meaning it’s less likely to be considered a scam.

Always use the contact details on the FCA Register, not the details the firm gives you. You should also check the firm’s details with directory enquiries or Companies House to make sure they’re the same.

Recovery Room scams

Criminals s approach investors who have been scammed or had failed investments, offering to help them recover their money, usually for an upfront fee. The criminals usually don’t provide an explanation as to how they’ll recoup the funds, or if they do it’s likely the explanation will be false or implausible.

Be extremely wary of any unsolicited contact from people claiming to know about your previous investments accompanied by an ask for an upfront fee, usually disguised as tax or miscellaneous legal costs. This is another scam trying to extort further funds.

Recovery rooms generally use a web-based email address. The FCA never uses webmail providers to contact consumers, nor does the Government, law enforcement agencies or law firms.

Investments in any form of cryptocurrency should only be ever be considered by persons who are enthusiastic in the technology, who understand it completely, and are only using money they can afford to lose.  If you are looking to invest in cryptocurrency but are relying on the advice of someone else, can you be sure they’ve got your best interests at heart?

Things to look out for

Scams can be hard to spot.  If you're planning on investing, it's really important you follow our advice below to help protect yourself. 

Unexpected contact

From someone you don’t know, who seems to know a lot about you. This doesn't mean they're who they say they are.  If you're not sure - hang up!

Time pressure

You may be promised a discount if you invest by a certain date, don't let this pressure you. Always think it through carefully and seek independent advice. 

Pop up adverts

Offering investments with well-known banks and asking you to fill out a form. Always contact the bank directly.

Steps to protect yourself before you invest

  1. 1

    Seek reputable, independent financial advice before you commit to an investment. Never take advice from the company that contacted you directly. 

  2. 2

    Before you hand over money ensure the firm you use is on the FCA register and is allowed to give financial advice (opens in new window) . You should also verify any contact details via the register too. If they're not on here, or the details don't match, it's likely a scam. 

  3. 3

    Check the FCA list of unauthorised businesses which is updated regularly. They list businesses believed to be involved in fraudulent activities. You can also carry out further scam checks on this website. 

  4. 4

    Be cautious of all unexpected calls, emails, and text messages. Don’t assume they’re genuine, even if the person seems to know a lot about you or your previous investments. 

Think you've been caught out?

If you think you've handed money or personal details over to a scammer, we're here to help. It's important you contact us straight away.

Report fraud

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