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Fraud Advice - Cryptocurrency

On this month’s Crimecall Detective Sergeant Kieran Tansey of the Garda National Economic Crime Bureau was in studio discussing the possible dangers involved in investing in cryptocurrencies and offering advice to viewers on how they can avoid becoming a victim of cryptocurrency fraud. 

Cryptocurrencies are unregulated digital currencies that generally only exist electronically. Bitcoin and Ether are well-known cryptocurrencies, but there are many different cryptocurrencies, with new ones being created all the time. 

Fraudsters are beginning to use cryptocurrency investment scams in order to defraud victims out of their money. One of the ways they may do this is: 

  1. You are browsing online and you come across an ad for a cryptocurrency. This ‘ad’ is set up by the fraudster and they are in control of anyone who clicks on it. Once you click on the ‘ad’ it may ask you for your email address or by clicking it you may have agreed to terms & conditions which then allows the fraudster access to your personal information (email address / phone number etc.) which you may have on your social media accounts.
  2. You then receive an email from a ‘company’ purporting to be a legitimate business offering to help you get set up with a cryptocurrency account. Their selling points all seem genuine - they offer to ‘take the hassle out of setting up an account’. You then follow their instructions.
  3. The ‘company’ helps you set up a legitimate cryptocurrency account. They ask you to download an app which gives the fraudsters access to your account. They guide the victim into transferring genuine cash from their bank account into their new cryptocurrency account.
  4. Once the steps are completed and because the fraudster has access to the newly set up cryptocurrency account they remove all your cash from the account. At this stage the victim’s funds are gone. They have been moved beyond their control.
  5. The fraudster creates a fake website showing the victim’s cryptocurrency rising in investment.
  6. The fraudster will then prolong the scam for as long as they can. Eventually after the fraudster is finished taking as much cash from the victim as they can, they cut off all communication. 

Victims of this type of scam are most likely male and over 55 years of age, but it is important to remember that anyone can be a victim of this type of investment fraud. Detective Sergeant Tansey provided some “Red Flags” when looking out for this type of scam and offered advice on how you can avoid becoming a victim: 

  • Virtual currencies are not regulated, so if something does go wrong you will not be able to claim compensation – YOU HAVE NO CONSUMER PROTECTION.
  • Always seek independent financial and legal advice before making any investments.
  • Do not respond to POP-UP ads or social media ads / messages.
  • Do not follow links from POP-UP ads or from social media or unsolicited emails/messages or other communications from persons unknown.
  • Do not respond to cold calls.
  • Be very wary of unsolicited emails / texts / calls / offers / advices.
  • Be very wary where the investment is being endorsed by celebrities / famous business people – they may not know their name is attached to the advertisement.
  • Do not download suggested APPS and never allow another take control of your computer.
  • Do research on cryptocurrencies before making any investments – there are many different types.
  • Before you invest in crypto, search online for the name of the company or person and the cryptocurrency name.
  • Only invest what you can afford to lose. No investment return is 100% guaranteed.
  • Be VERY wary of advertisements offering very high ‘too good to be true’ returns.
  • Remember investing in cryptocurrency is high risk.
  • If you get a good offer – stop and consider – why me? Why am I getting this once in a life time offer? Why the rush? Be wary where there is a sense of urgency – has to be done now / last chance - don’t allow yourself to be rushed into it.
  • The Central Bank of Ireland advices that investing in cryptocurrency is unsuitable for most consumers particularly those pursuing long-term goals like saving for retirement.
  • Where you have been scammed be wary of companies who subsequently make contact with you with a view to retrieving your investment. These can often be fraudsters also. 

REMEMBER IF IT SOUNDS TOO GOOD TO BE TRUE THEN IT PROBABLY 

Garda National Economic Crime Bureau