PAINTER and decorater John Walker has lost his home and £66,000 life savings after falling for a Bitcoin investment scam.
The 53-year-old who lives with his wife and teenage daughter, fell for the fake advert while looking for a way to make some extra cash after being signed off work for 12 weeks with two broken ribs.
Today, the City watchdog, the Financial Conduct Authority (FCA), has issued a warning about crooks using Facebook, Instagram and other online channels to lure victims into handing over their cash for investment and cryptocurrency scams.
John, from St Ives in Cornwall, spotted an advert for Bitcoin investments while using a sporting app on his phone. He hadn’t hard of it before but was attracted by the idea that he could invest from as little as £250.
The advert lured people in with the promise of fast cash. John recalls it saying something along the lines of “if you invest £250, your money will return £1,500 in 24 hours”.
He said: “The advert looked very convincing, so I provided my address and details. After that, I was bombarded by calls.
How to protect yourself from an investment scam
TO avoid falling victim to investment scams, you need to remain vigilant when making investment decisions.
- Reject unsolicited investment offers, whether made online, on social media, or over the phone.
- Before investing, check the FCA Register to see if the firm or individual you are dealing with is authorised. Also check the FCA Warning List of firms to avoid.
- If in doubt, steer well clear.
- Get impartial advice before investing.
Signs that should set the alarm bells ringing include:
- Unexpected contact – while you may be on your guard for cold callers, you now need to be alert to contact out of the blue from all sorts of online sources, such as email or social media. The same applies to contact you may get through the post, via word of mouth, or even in person at a seminar or exhibition.
- Time pressure – beware if someone offers you a bonus or discount if you invest before a set date or says the opportunity is only available for a short period.
- Social proof – keep an eye out for fake reviews and claims that other clients have invested, or want in on the deal.
- Unrealistic returns – watch out for fraudsters promising tempting returns that sound too good to be true, such as much better interest rates than elsewhere.
- False authority – don’t get tricked by convincing literature and websites, or investments which claim to be regulated. Also be wary of someone speaking with authority on investment products.
- Flattery – be on your guard if someone tries to build a friendship with you. They may be trying to lull you into a false sense of security.
“Initially, I thought they were from the same person, but it turned out they were from four or five different companies.”
John ended up handing over £250 to a handful of different firms but when he realised it was all the same company he asked for his money back.
He liked the sound of one of the firms, so he kept his investment with them.
The firm then asked John if they could withdraw cash from his bank account to top-up his initial investment, which he agreed to.
Between October and January 2018, the company siphoned a whopping £66,000 from John’s account and then seemingly disappeared.
John wan’t worried by the money leaving his account as he believed it was going into his Bitcoin account.
It was only when he tried to withdraw the cash from his Bitcoin firm and wasn’t able to that he became concerned.
“Eventually I realised they had wiped us out of all our savings – and disappeared off the face of the earth,” said John.
‘I’ve lost three stone and can’t sleep at night’
“People tell me I’m not the same person I used to be. This whole thing has had an impact on both my mental and physical health.
“I’ve lost three stone, and can’t sleep at night, as it keeps playing on my mind. I’ve never really got my head around what happened.”
At the time, John reported the fraud to the Financial Conduct Authority (FCA) and the police. He also spoke to his bank to see if he could get any of the money back.
But his bank wouldn’t refund the cash, saying the fraud was John’s own fault.
“This was devastating to hear, as I don’t feel I did anything wrong,” said John. “I was just tricked into handing over my details over the course of a number of phone calls. They scammed the money out of me.”
Following the scam, John was forced to sell the family home and move into a rental property to save on their outgoings. His wife has also had to go back to work.
‘I’ve been left with nothing’
“I moved to Cornwall in 2011 to start a new life with my family – and had a decent sum of money saved to extend our home,” says John.
“I now still have a family to support, but have been left with nothing.”
Fraud reporting agency Action Fraud says victims of investment scams were conned out of an average of more than £29,000 last year, with fraudsters increasingly using social media to target people.
What to do if you think you’ve been scammed
IF you’ve lost money in a scam, contact Action Fraud on 0300 123 2040 or by visiting Actionfraud.police.uk.
You should also contact your bank or credit card provider immediatley to see if they can stop or trace the cash.
Also monitor your credit report in the months following the fraud to ensure crooks don’t make further attempts to steal your cash.
According to the FCA, the most commons scams reported involve investments in shares and bonds, forex (foreign exchange trading) and cryptocurrencies.
In a bid to help protect people, the FCA is raising awareness of its ScamSmart website, which allows people to check if the investment opportunities they have been offered are being run by regulated firms.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Before you invest, do your homework.
“Always check the FCA’s register to make sure you’re dealing with an authorised firm, and use the contact details on the register, not the details the firm gives you, to avoid ‘clones’ [where scammers pretend to be from legitimate companies].
“Also check the FCA’s Warning List of firms to avoid. Remember, if in any doubt, don’t invest.”
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Earlier this year, Money Saving Expert Martin Lewis got Facebook to donate £3million to help tackle fraudsters after conmen used his face to promote scams.
One The Sun reader lost £100 after falling for one such ad on Facebook.
Brits have also been warned about fake Thomas Cook and Butlin’s Facebook pages that scammers use to steal your information.
While a new type of scam saw an accountant lose £10,000 after fraudsters spied his gym locker PIN and guessed it was the same for his card.
But new rules did come into force last month to make it easier for you to get back cash from fraudsters.
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