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Metro Bank Highlights Scam of The Month & How To Spot Them

28th June 2021

Cryptocurrency is July’s Scam of the Month

The UK’s community bank, Metro Bank, is offering consumer guidance about scams related to cryptocurrencies - the scam of the month for July.

Cryptocurrency is a new form of digital or virtual money like Bitcoin.  Unlike traditional currencies there is no centralised authority like the Bank of England to regulate the market,  instead transactions are verified and records maintained by a decentralized system using cryptography.

The value of cryptocurrencies can fluctuate dramatically and this has presented scammers with the ideal backdrop to entice investment promising high returns. Victims are enticed to sign up to cryptocurrency sites and not only supply personal details including identification documents to ‘open the trading account’, but also encouraged to continue investing for higher returns, after making an initial deposits.

A cryptocurrency scam can take many forms including:

  • A fake cryptocurrency which doesn’t and won’t ever exist – for example if it’s a fake Initial Coin Offering (ICO)
  • A fake investment which promises to put money in a legitimate cryptocurrency
  • A dangerous website link that then downloads malware onto your computer

“Fraud related to Cryptocurrency is so prevalent, a number of British banks are preventing their customers from transferring funds to crypto trading platforms”, explains Adam Speakman, head of fraud and investigations at Metro Bank.   “However if consumers follow our simple steps and make the appropriate checks before investing -  like they should with any other investment opportunity -  they can reduce the fraud risk, however the risks associated with any investments still exist.”

How to reduce the risk if choosing to invest…

  • Research the organisation thoroughly. Check consumer-protection websites and independent reviews. Many cryptocurrencies are not registered with Financial Conduct Authority. Always use a firm that is on the FCA register – this can be found on FCA website.
  • No matter how professional looking the website is, if you are being offered significant high returns, or out of the blue contact (especially via social media) promising big profits – this is potentially a scam. If it sounds too good to be true, it usually is.
  • Celebrity endorsement does not mean the opportunity is genuine.
  • Don’t respond to cold calling or uninvited approaches.
  • If you have a crypto wallet make sure it remains within your control – do not allow remote access (even to ‘support staff’). If the wallet wasn’t created by you, or you do not have access to your wallet – stop making payments, it is a scam.