It's been emotional – how I helped a client discover they are a victim of a cryptocurrency fraud

I’ve had mixed feelings over the last couple of weeks as I and my colleagues have been battling through a situation with a client who has found themselves enmeshed in a cryptocurrency fraud. Sadly, they aren’t alone. but are one of several the firm is aware of in recent months. We picked up on the problem at an early stage when they contacted us, but sadly they had done a lot before we got involved.

It's devastating to see an older person taken advantage of

The amount of money we are talking about is not inconsiderable. They have lost the sort of money you could buy property with, because of an investment they made after seeing an ad on Instagram. This one featured an image of Jeremy Clarkson, but identical versions have circulated with other well-known faces attached.

I hasten to add the advert is not legitimate, and Mr Clarkson is not in any way involved in the scam.

It's disgusting to see criminals use every tactic in the book

The approaches taken range from appealing to a sense of opportunity, to making their target feel guilty, to making threats and to emotional blackmail. All to keep someone on the hook.

Like any abuser in an emotionally abusive relationship, the fraudsters seek to alienate the victim from their support networks. My client only told their partner after several months and after Charles Stanley got involved. They still haven’t found the courage to tell their children yet.

Again, in typical abusive behaviour, the criminals feed on feelings of shame and embarrassment seasoned with just enough hope to keep them on side. They sow seeds of doubt about the legitimate entities they are involved with. They help them "beat" the fraud checks carried out by banks when making payments and guide them to mislead other institutions to gain access to funds to feed into the fraud.

How did this scam work?

This particular fraud focussed on requesting “verification payments”, supposedly moving money between Crypto Wallets but needing the amounts to be “matched” with new funds before they could be released. Of course, they have never been released.

This individual on several occasions tried to check the veracity of the requests they received. Unfortunately, they did so with contacts they had made during the scam, who of course confirmed everything was OK.

Its heartwarming to see my colleagues’ response

Every one of my colleagues involved in this case has put the client at the centre of our response:

• how to secure them financially, but also emotionally during this awful time;
• how to work with other institutions connected to this individual to get the best result for them,
• how to protect others who may be impacted by this gang,

Time and again they have gone above and beyond to try and come up with the best possible solution to a horrible situation. Consciously building consideration of the grief curve into our response. From compliance to cyber security, from investment manager to administrative assistant, the concern has been universal.

I've felt very proud to work for a company truly doing its best for our client

However, it's been emotional. Navigating conversations where we broke the news the client was the victim of fraud; having to explain that the money isn’t just currently inaccessible but gone; having conversations where the individual told us what we wanted to hear, and then continued to pay the scammers to try and ‘safeguard’ their funds.

For all the CPD, the training, the “how to spot fraud” sessions – which clearly worked! – we haven’t had training in how to handle a person discovering they’ve been cleaned out. That their ability to help their family has gone. That they have taken on debt which they thought was short term but could now be long term.

The Regulator doesn’t tell us the best ways to guide someone through the realisation they have fallen for a con without making them feel stupid, or ashamed. With how to explain that they can trust us but can’t trust them. With spotting when someone is lying to you because they are still under the influence of scammers. The Chartered Institute for Securities & Investment (The CISI) some ideas for training opportunities here?

What should people look out for?

In retrospect there were red flags in the correspondence: email addresses were sometimes less than professional, the quality of English used in communications was often poor, people contacted them out of the blue, a sense of urgency was often involved, verification payments were required.

If you are unsure about anyone that contacts you out of the blue or about an advert you see online, contact your bank, Action Fraud, your financial adviser, your accountant or of course your friendly investment manager. And finally, keep an eye out for your friends and family.

Here are some useful links:

• FCA - Crypto Investment Scams
• Cryptocurrency Scams: How to Spot, Report, and Avoid Them (investopedia.com)
• Action Fraud

#cryptofraud #financialfraud