The scam: ‘Celebrity endorsed’ cryptocurrency scams
Volume of celeb-endorsed cryptocurrency scams (Santander data):
- Average value of scam in Q1 22: £11,872 up 65% year-on-year
- 61% increase in case volumes from Q4 2021 to Q1 2022
- Based on current growth, we expect an 87% increase in volume of cases in 2022 compared to 2021
Chris Ainsley, Head of Fraud Risk Management, Santander UK said: “We’re seeing a worrying rise in ‘celebrity-endorsed’ cryptocurrency scams, where familiar faces are being misused on social media in order to con people out of often life-changing sums of money. Rather than revelling in the promised high returns, people are losing significant sums after being duped by these highly sophisticated criminals. Always do your homework and thoroughly research any investment opportunity before moving any money - irrespective of who is endorsing it. “
How the scam often works:
1. The customer sees a celebrity advertising a cryptocurrency on social media, Google, or even reputable media sites, or is introduced by another social media user to a crypto investment opportunity. The celebrity appears to be endorsing the opportunity.
2. The customer clicks on a link and shares their contact details in order to find out more.
3. They are then contacted by phone, email or social media, and offered high returns on the crypto investment with little or no risk. The fraudster will often employ high pressured sales tactics.
4. They are told to download specialist software to support them opening cryptocurrency accounts. The software is remote access software, giving the fraudster full access to the customer’s computer.
5. The customer opens (often multiple) crypto currency accounts and deposits money in them.
6. The fraudster freezes access, and takes over the customer’s account, leaving the customer unable to access their money.
Santander case study:
• Mr G saw a post on Facebook advertising a cryptocurrency investment opportunity, which was seemingly endorsed by Martin Lewis. Mr G clicked on the link to register his interest and was then contacted by someone purporting to be his personal ‘account manager’ from the cryptocurrency platform, who promised him high returns on his investment.
• Mr G followed his ‘account manager’s’ advice and opened a separate bank account and transferred money from his Santander account to the new account.
• He was then encouraged to allow his ‘account manager’ to access his computer remotely to assist him in making the payments from his newly opened bank account to his cryptocurrency wallet. Mr G was able to see the money leaving his bank account and being credited to his cryptocurrency wallet, but he did not have control over the wallet.
• The fraudster told Mr G to lie to his bank about the payment reason because his bank wouldn’t want him investing in cryptocurrency. As such, when Mr G was contacted by Santander to verify the payments to the new bank account, he followed his so called ‘account manager’s’ advice and provided a false reason as to the purpose of the payment.
• After receiving a number of follow up calls from his ‘account manager’ asking him to deposit more money into his account and talking with family, he realised he was being scammed and contacted Santander to report it.
What to do:
If you think you’ve been the victim of a crypto scam, report it to your bank straight away. If you have downloaded software to supposedly help with the investment, turn off and unplug your computer and do not use it until you have removed the software and had it checked by a computer technician.
If you think you’ve already been the victim of this type of scam, report it to your bank straight away.
How to protect yourself:
• A celebrity endorsed investment in cryptoassets or cryptoasset-related products doesn’t mean it’s a genuine endorsement or a legitimate investment.
• Don’t allow anyone to set up a cryptocurrency wallet, upload ID documents or manage investments on your behalf remotely.
• Avoid uninvited investment offers whether made on social media or over the phone. If you’re thinking about making an investment, thoroughly research the company first and consider getting independent advice.
• Don’t fall for pressurised sales with limited timescales and promises of too good to be true returns.
• Use the FCA website www.fca.org.uk to look up the company who you’re buying crypto from and check they’re a legitimate registered firm, not unregistered, or a clone or fake. Then call them using the number on the FCA website when you both set up a payment and every time you make a payment, even if you think it’s going to the same place.
• The FCA also has ScamSmart www.fca.org.uk/scamsmart, an online tool to help you identify if your investment is a scam or not. Answer four questions with drop downs for multiple choice and get a clear picture on the potential investment and the potential risks.
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The information contained in our press releases is intended solely for journalists and should not be used by consumers to make financial decisions.
Notes to Editors
Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. At 31 December 2021, the bank had around 19,200 employees and serves around 14 million active customers, via a nationwide branch network, telephone, mobile and online banking. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers’ eligible deposits are protected by the Financial Services Compensation Scheme (FSCS) in the UK.
Banco Santander (SAN SM, STD US, BNC LN) is a leading retail and commercial bank, founded in 1857 and headquartered in Spain. It has a meaningful presence in 10 core markets in the Europe, North America and South America regions, and is one of the largest banks in the world by market capitalization. Its purpose is to help people and businesses prosper in a simple, personal and fair way. Santander is building a more responsible bank and has made a number of commitments to support this objective, including raising over €120 billion in green financing between 2019 and 2025, as well as financially empowering more than 10 million people over the same period. At the end of 2021, Banco Santander had €1.15 trillion in total funds, 153 million customers, of which 25.4 million are loyal and 47.4 million are digital, 9,900 branches and 197,000 employees.