Our Financial Litigation team takes a look at all you need to know about Crypto scams, including what they are, warning signs to look out for, and the legal options that may be available should you fall victim to one.
What is a Crypto Scam?
Crypto scams are very common. Scammers usually put advertisements up on social media platforms such as Instagram and Facebook, for fake crypto investment schemes.
Some sophisticated scammers may also use images of celebrities such as Martin Lewis to help promote their scheme and add legitimacy.
It is also common for scammers to target individuals who are searching for investment opportunities online through search engines, such as Google and Bing.
Some scammers copy legitimate investment websites where they are able to manipulate software to show fake prices and investment returns. Once you have invested into one of these platforms, the scammers may just disappear along with the money you have invested. Or, they may continue showing you your investment growing, and you may only realise it is a scam when you are not able to withdraw any of your profit.
One of the main issues when it comes to crypto scams is how technical crypto platforms can be to operate. Scammers will exploit someone who does not fully understand how crypto works, manipulating them into transferring more money.
What are the common signs of a Crypto scam?
You may be dealing with an Crypto scam if:
- You are promised or guaranteed unusually high returns when investing in or with crypto
- You are dealing with unfamiliar platforms, that although they look professional, are very complex and difficult to understand
- You are pressured to act quickly and make payment immediately and if not, are told you will suffer financial consequences.
- Requests are made for confidential information or passwords
- You are repeatedly asked to ‘upgrade’ your account, at a cost to you, in order to make withdrawals and never receive any money back
How do Crypto scams often happen?
Crypto scams often begin with an individual coming across an advertisement for a crypto investment opportunity on an app such as Facebook, as they may have an interest in trading.
Individuals are then invited to join a group chat on WhatsApp or Telegram, where there will be lots of other investors also making money and individuals are then introduced to their personal ‘agent’ who is there to guide and reassure them. Individuals are often encouraged to deposit money into a crypto account straight away.
Scammers usually communicate with individuals by texting and calling them regularly to update them on the progress of an investment, or how the value of a certain coin is going up.
The scammer may only ask victims to deposit a small amount of money at first as they build a relationship with the individual. Once a relationship is established, the amount of money requested increases.
The more money invested, the more pressure is added by the scammer to keep investing as a means to try and retrieve the individual’s money. They will offer reassurance that everything will work, and may even send you screenshots of other investors withdrawing their profit to their bank account.
The scammer will keep providing excuses as to why individuals are are unable to withdraw their profit. They may say that they have not sent the correct amount of money to the correct wallet address, they need to pay Anti Money Laundering (AML) fees, or that they will get in trouble with HMRC if they do not send a certain amount of money straight away.
The financial loss occurs when the scammer convinces you to transfer your money. You believe that you are transferring the money to a reputable company or person, for genuine reasons. However, you have transferred the money to a scammer.
What should I do if I have been affected by crypto fraud?
Cease any communication with the scammer. Do not send any more money or personal information. Scammers often manipulate victims into sending more funds under false pretences.
- Do not engage with any company contacting you out of the blue claiming that they may be able to assist on recovering the funds if you pay them a fee in advance
They are usually part of the scam, and once you have sent money you won’t hear from them anymore.
Gather and save all evidence related to the scam. This includes downloading all conversions and taking screenshots of messages, emails, contact information and any financial transactions. Keep as many details as possible, such as dates, times and details of your interactions with the scammer.
- Report the crime to the police
Contact your bank or credit card provider and report the profile to the app or online platform (if necessary).
- Consider seeking legal advice
Specialist solicitors experienced in bank scam and cryptocurrency scam claims may be able to review your case, advise you on your options, and make a complaint on your behalf.
How can Oakwood Solicitors help?
Investigating the fraud
If you have been a victim of a Credit Card scam, Oakwood Solicitors can see if they can help you get your money back. Our team will review the evidence you have to see if it is possible to make a complaint to the bank for a refund of the monies lost.
Recovery Options
There are options available to recover your money. Recovery can be sought from the financial institution that should have prevented the fraud.
In some instances, there may also be other regulated firms involved who also could have detected the fraud and issued a warning.
You can attempt to recover the funds yourself without legal representation. However, there are benefits to having instructed Oakwood Solicitors do this for you.
We are a regulated firm of Solicitors with over 20 years’ experience in financial mis-selling claims. We aim to take the hassle out of the claims process, as we do all the hard work for you.
Ongoing Support
If you believe you have been victim to a Crypto scam, whether you transferred money to the scammer or not, then there is further advice and support available from the following services:
Cryptocurrency Scam – Client Case Study
Our Client fell victim to an advanced cryptocurrency investment scam after coming across a fake Google advertisement featuring Martin Lewis, which was promoting an online investment platform.
The scammer posed as a professional investment broker who was using a convincing professional website, positive Trustpilot reviews, and a sophisticated trading platform showing supposed live market activity.
Our client carried out some research before investing in this platform and was convinced that everything was legitimate. Over a period of several months, the scammer built up a certain level of trust between themself and our Client by explaining everything in great detail, with regular communication, and allowing our Client to withdraw little amounts from their investment.
Our Client felt reassured by the scammer, as they were able to see their investment growing. They therefore continued investing a substantial amount of money via different cryptocurrency platforms.
When our Client eventually wanted to withdraw their funds, the scammer would provide an excuse as to why this was not possible. For example, they would claim the Client needed to pay Anti Money Laundering (AML) fees and tax fees. Because our Client was desperate to recover their life savings, they continued to invest more money before finally realising that it was all a scam.
Over a six month period, our Client transferred £51,000 to cryptocurrency platforms via their bank account. Despite our Client not having any previous experience with cryptocurrency and the substantially large and frequent payments they were sending to these crypto platforms, the bank failed to act accordingly.
Our Client contacted us regarding this scam, and we were able to assist with drafting a formal letter of complaint to the bank, requesting a refund on behalf of the client.
In this case the bank rejected our complaint, so we challenged their rejection by escalating the case further to the Financial Ombudsman. Following our representations the Financial Ombudsman upheld our compliant and the client was issued a full refund of £51,000.
Frequently Asked Questions
- How can I recover the money lost to a scam?
You can make a complaint to the bank where the payments were made from.
- Would the bank refund me?
The bank will review complaints on a case-by-case basis, so they can assess all factors of what happened in the scam and assess whether it should have done more to protect you and your money.
- Are there any upfront fees for you to make a claim on my behalf?
There are no upfront fees and we would never ask for any upfront costs to make a claim on your behalf.
- Am I liable to pay any fees if the claim is unsuccessful?
No. Subject to compliance with the agreement between us, you would not be liable to pay any legal fees unless your claim was successful.
- How much will I pay you if I win my case?
Oakwood Solicitors is authorised and regulated by the Solicitors Regulation Authority. The SRA introduced fixed fees for this area of work. We receive payment as a deduction of any award you receive. This means that the payment is a fixed percentage of the refund amount. The exact percentage is fixed as per the table below:
| Band |
Redress awarded for a claim (3) |
The maximum percentage rate of charge |
The maximum total charge (£) |
| 1 |
1-1,499 |
30% |
420 |
| 2 |
1,500 – 9,999 |
28% |
2,500 |
| 3 |
10,000 – 24,999 |
25% |
5,000 |
| 4 |
25,000 – 49,999 |
20% |
7,500 |
| 5 |
50,000 or above |
15% |
10,000 |
This depends how the bank pay any refund. If it makes payment to our client account then we will deduct our percentage fee from the money, and the balance will be sent to you.
Alternatively – if the bank refunds the payment to your account, we will raise an invoice for payment of our percentage and you will be required to pay this invoice.
Why Choose Oakwood Solicitors?
- We are a regulated Firm of Solicitors with over 20 years’ experience of recovering money for clients.
- We take all the hassle and stress out of the claim.
- We do not charge any upfront fees. Our fees are a fixed deduction of any money you recover.
- Our fee is only payable if your claim is successful.
Further reading
Bank fraud and scam claims – Oakwood Solicitors
Speak to Our Team Today
If you would like advice regarding Crypto scams, our team is here to help. Contact us on 0113 200 9720 or fill in our online contact form on this page and a member of the team will be in touch.
Laura Barbera joined Oakwood Solicitors Ltd as a Solicitor in May 2022. Laura is a dual qualified professional in both the United Kingdom and Spain.
Laura comes from a legal and financial services …
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