Investment and cryptocurrency scams

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There are many different types of cryptocurrency and investment scams. They can be very convincing, and anyone can be caught out.

Here’s our guide on what these scams generally look like, how to protect against them and what to do if you’re a victim.  

What is cryptocurrency?

Cryptocurrency is a digital currency that you can trade online.

It doesn’t rely on authorities like governments or banks and uses cryptography to secure transactions you make.

The first and most well-known cryptocurrency is Bitcoin, founded in 2009.

People who have or trade in cryptocurrency have a crypto wallet. This stores your financial data, protects your assets, and lets you send or receive transactions virtually.

What are cryptocurrency scams?

There are a few types of cryptocurrency or Bitcoin scam. Often, they’ll be scammers approaching individuals and offering an opportunity to ‘invest’ in cryptocurrency to make a profit.

Scammers will generally use social media like Instagram or Twitter but can use other platforms.

Once you’ve shown interest in the potential ‘investment opportunity’, they’ll set up a fake crypto wallet or get access to your existing one. 

Either way, once they have access, they’ll empty your money from it. 

What are investment scams? 

Investment scams are when criminals trick you into investing money in commodities or currency under false pretences. This can be with regular or crypto currency. 

The most common one is approaching people with an investment opportunity. They’ll sometimes pretend to be well-known companies to do this or set up fake companies.

They offer you the promise of big profit or returns on a small investment.

They can also involve applying for loans on your behalf or through you, taking the sum of the loan, and cutting off all contact.

This will leave you out of pocket and liable for the loan after they’ve disappeared with your money. 

How to protect from cryptocurrency scams

Cryptocurrency investment scams are on the rise, so it’s important to know how to protect against them. 

  1. Get financial advice from a trusted source, not the company or person asking you to invest. This might be your bank or a reputable financial advisor.
  2. Check the company you’re investing in is on the Financial Conduct Authority (FCA) register. If they’re not on here or their details don’t match what’s on the register, it’s probably a scam.
  3. Use the FCA ScamSmart resource: this is a questionnaire where you can enter details of the ‘investment opportunity’ to check whether it’s likely fake. 
  4. Watch out for unexpected messages that promise guaranteed returns or put time pressure on you – this could be saying, ‘if you don’t invest by the end of today, the opportunity will be gone’.
  5. Take five – if you’re being pressured, take five minutes to step away from the situation and think carefully about what you’re being told. 
  6. Never share your screen with anyone asking for investment. Scammers may tell you to download software that gives them access to your phone or computer so they can ‘help you with the investment process’. This will give them access to sensitive data and bank accounts.

What to do if you fall victim to a cryptocurrency scam

Getting your money back after a crypto fraud case or investment scam can be difficult.

But there are a few things you can do to have the best chance of recovering your money.

Gather evidence of the scam

This might include:

  • screenshots of any messages between you and the scammer
  • bank statements or proof of transactions
  • URLs of any websites you were directed to
  • information on any software you downloaded 

Report it 

You should contact:

  • the police – contact the local police and give them all the evidence you gathered so that they can open an investigation into the crime 
  • a financial regulatory body – you can report a scam to the FCA here

If you fall victim to a scam that involves taking out a loan with us, please either:

  • email us at 
  • call us at 0333 234 6007

Case studies

Here are examples of some of our customers who have fallen victim to investment scams. 

Customer one

This customer was 24 years old, a homeowner and employed full-time.

They saw an advert on Instagram for investment services and signed up for ‘investment advice’ with an ‘advisor’ who promised large returns on a small initial investment.

The ‘advisor’ then convinced the customer to allow them to access their computer, which meant their personal information and bank accounts were compromised.

The scammer then applied for a loan with us in the customer’s name using this information. The loan was paid into the customer’s account, who was then convinced to forward the funds on for ‘investing’.

At this point, the scammer cut off all contact – meaning the funds are gone, and the customer is still liable for the loan repayment.

Customer two

This customer was 51 years old, a homeowner and employed full-time.

The scammer approached them through social media and told them about a ‘risk-free’ investment strategy which involved taking loans out to invest.

Again, the customer granted access to their computer and the ‘advisor’ took over their bank account.

The customer then knowingly applied for loans so they could invest. The scammers told them to lie about what the loan was for when applying and put ‘home improvements’.

The transfer of the loan was then made into the customer’s account. Because the scammers already had access to the account, they transferred it directly to a third party.

They cut off all contact at this point, leaving the customer liable for over £35,000 worth of loans across three different providers.

Take Five

Take Five is a national campaign to help protect people against financial fraud. They offer free and impartial advice to anyone who thinks they might be a scam victim. It's easy to act hastily when scammers are pressuring you over the phone, email or social media.

Take Five urges you to take five minutes to stop and consider the situation carefully. 

They ask you to:

  • Stop: take a moment to think before sharing information or money
  • Challenge: question whether the situation seems genuine
  • Protect: contact your bank immediately if you think you’ve fallen for a scam

Read more about their scam prevention advice here