Crypto Scam Robs Nine People of £1m

After generating the bogus reports, scammers contacted each of the victims pretending to be a police officer investigating the fake fraudulent activity, and saying they would receive a call from a ‘Crypto Wallet Host.’

The victims then received a second phone call from a ‘security officer’ asking for their seed phrase – a security measure consisting of random words generated by crypto wallets to protect digital assets. Once the fraudster was given the seed phrase, they were able to access and steal the victims’ money.

Cryptocurrency is a type of digital currency which does not physically exist. It can, however, be invested or traded in the same way you would trade stocks and shares.

How crypto is traded and transferred is complex. Investors have an encrypted digital ‘wallet’ which contains the cryptocurrency units they own. Many people who trade cryptocurrencies such as Bitcoin hope for a rapid and high return on their investments.

Crypto scams often start with online adverts on social media or involve scammers contacting people out of the blue, promising to deliver high returns from investments.

In other cases, the fraudsters may pose as authoritative figures, such as the police, on the pretence that they are investigating banking fraud as happened in the Kent case.

Cryptocurrency scams are part of the wider range of Authorised Push Payment (APP) fraud, where through social engineering techniques, individuals are tricked into transferring money directly to scammers, giving permission to their banks to do so via online or telephone banking.

Common signs of a crypto scam include:

• Being put under pressure to make urgent impulse or fear-based decisions within a short space of time
• Demands for increasing amounts of money with increased urgency
• Encouraging individuals not to tell family or friends
• Fake domain names with subtle errors that do not match official websites
• Coaching the victim to lie about the purpose of a money transfer or to ignore scam warnings

If you think you have been scammed, you should contact your bank and/or crypto wallet provider immediately. Make sure to do this via their legitimate website, which you can check on any bank statements, or by using the 159 Fraud Helpline.

It is also important to also report all fraudulent activity to Action Fraud. By doing so, you will help prevent this happening to others and this may also trigger a criminal investigation.

Once reported, your bank should carry out an urgent investigation and try to recover the money you have lost. If that is not possible, or you do not agree with the bank’s approach to the investigation, you can take your case to the Financial Ombudsman Service (FOS). FOS is an independent, government-backed body that settles disputes between financial institutions and their customers.

The rules around APP Fraud claims changed in October 2024 with an increased onus on banks and financial institutions to prevent fraud and reimburse customers more quickly, meaning banks must generally investigate and reimburse eligible APP fraud victims within 5 working days.

However, the Financial Ombudsman Service has reported that, despite these changes, it still expects a 12% rise in the number of fraud and scam cases it handles over the next year. Not all APP fraud claims are covered by the new rules, so there is still considerable demand for the service, particularly in older or more complex cases.

TLW Solicitors specialise in dealing with these types of claims, so get in touch if you are experiencing difficulties in recovering compensation from your bank if you suspect that you or a loved one has been the victim of a scam.

Sarah Spruce, Legal Director at TLW Solicitors, commented:

“An alarming amount of money has been stolen from a group of individuals in the Kent area, highlighting just how sophisticated and sinister crypto fraud is becoming.

It is disheartening to hear that the victims’ details were stolen after a data leak online – something that was out of their control entirely. It is also concerning that Action Fraud, designed to protect consumers, was used as the basis of the scam. There is no real way of eliminating fraud and so it’s vital that everyone is aware of the signs and practical support available.

Those dealing with fraud are not alone. With a reported £213.7m lost to APP fraud in the first half of 2024 alone, it is very common, and nobody should feel ashamed or embarrassed about seeking help.

If you, or someone you know has been scammed, get in touch with our specialist fraud team and we can explore whether you may be eligible to make a no-win, no-fee compensation claim.”