Financial Watchdog investigates 52 cryptocurrency firms.

The financial Conduct Authority has launched investigations into 52 companies after claims that mis-selling, fraud and pressure selling from people being mis-sold bad cryptocurrency investments.

The FCA has received a flurry of complaints to its consumer helpline. In October 343 calls were made from people who had been ripped off from bad investments. Cryptocurrency such as Bitcoin has increased in value and is continuing to hit record highs, attracting investors but also scammers who are increasingly targeting people looking to make some money.

At the beginning of the year the FCA warned that consumers should know what they are doing when investing in cryptocurrency or be prepared to lose all their money if not. They urged consumers to understand what they were investing in and the financial risks involved and that if they invested in a company that goes bust, they would be unlikely to receive their money back. They went on to say that a large number of companies were overstating the returns people could make on investments, and to stay clear of companies and advertisements offering high returns on investments.

The Financial Conduct Authority required non-registered crypto businesses to register with the regulator by January 10 this year and businesses that failed to do so would come under FCA scrutiny. The cryptocurrency market is extremely volatile which makes them a high-risk category for investors. It is also a relatively new market which means low levels of regulation are in place to monitor it. Because of this it is too easy for fraudsters to set up bogus companies and even fake currencies.

Cryptocurrency scams the top four:

The promise of immediate high returns can make people eager to take a risk on a cryptocurrency investment. But what happens more often than not is innocent investors are lured in by making small but significant profits on smaller investments, and once they start investing more and more a scammer will leave them with nothing and pocket the lot.

  • Fake exchanges – investment opportunities of Bitcoin and other cryptocurrencies being marketed on social media and via email – these will send you to fake exchanges which can often disappear overnight. Make sure websites are HTTPS secured – although this is no guarantee the site is genuine – but the most important thing is to do your research and seek out reviews of sites.
  • Fake wallets – wallets are primarily about storing your cryptocurrency and not buying or selling it. Fake wallets are scams for malware to infect your computer to steal your passwords and other personal information. They are not easy to spot but sites like, for example, do recommend wallets for mobile and desktop users and provide a simple, secure way to send and receive bitcoin.
  • Phishing scams – phishing is when someone tries to trick you into thinking that a website or company is genuine. Scammers will often encourage you to make a transaction, but this will be fake, meaning you will lose your money as a result. Alternatively, it could be an opportunity for scammers to place malware on your device to steal your personal details.
  • Ponzi scams – Ponzi scams usually involve making strong or unrealistic claims about the returns you can make by investing in cryptocurrencies. They often have referral programmes to encourage investors to sign up their friends and families. In reality, most people will lose some of all their money in these types of schemes.

The best way to avoid these types of scams is to stay safe online, protect your data, do not open unsolicited emails and fully research anywhere or anyone you are thinking of investing your money with. And look out for anyone guaranteeing to make you money, promising big pay-outs, offering free crypto cash, if something sound too good to be true, chances are it is.

Success for our clients

Mis-sold Claims Assist are experts in consumer mis-selling claims. Because we are experts, we have a high level of success in arguing claims for products and services that are mis-sold to consumers.  Our expert team understand that the most important part of our jobs is listening to our clients and making sure we are providing them with the best possible service. This ensures we have all the relevant information to put forward a successful argument in order to claim back your money. We are experts in presenting claims, something that comes with many years of experience. A perfectly reasonable and legitimate claim can be ruined if it is incorrectly pleaded. If a claim has been presented badly it could compromise the opportunity to make a successful claim in the future.

Our recent success story involves some clients who fell victim to a timeshare termination scam after their resort refused to relinquish their contract. In 2016, our clients were persuaded to attend a sales presentation with a company claiming to be able to terminate their timeshare. They were made to believe this would be a short meeting, instead they were kept there for a half day. During this meeting, the sales representatives were trying to persuade our clients to sign up to a concierge and lifestyle package which would provide them with exclusive vouchers and discounts to a number of purchases, specifically holidays, flights and accommodation. They explained that the savings they would make using this package would save enough money that eventually the £15,000 price tag would pay for itself.

After hours of hard selling our clients agreed to pay £14,000 for this package and signed up on the day on the understanding that the offers they would receive were exclusive and they would have discounts on a number of products including holidays and flights. Needless to say, that following the purchase, our clients found it nearly impossible to use this concierge and lifestyle package in anyway whatsoever. In fact, when our clients were directed to Mis-sold Claims Assist, our team undertook some investigation and discovered that some of these exclusive offers were completely fictitious. One such offer was for a break to Tenerife, the company offered this break for £205 per night, we discovered that the same hotel for the exact dates was being advertised online for a mere £33 a night. Not only was this company vastly mis-representing their product, but they were overcharging for accommodation. This was just one of the discoveries we made when investigating this company’s actions. We also learned that the company went into liquidation, ceased trading and the directors were being investigated by Trading Standards for fraud. Thankfully for our clients we have been able to claim their money back through the finance provider, however there are many other companies and individuals to take their place and people continue to be taken advantage of with similar fraudulent schemes. If you or anyone you know has fallen victim to such a fraud, get in touch with us today. We have great success in arguing these types of claims and could help win you your money back.