Protect yourself from cryptocurrency, pensions and investment scams

Tuesday 11 July, 2023

Cryptocurrency scams

Crypto currency and crypto assets have become popular recently, but it is important that you understand the potential risks of investing in them, so you can protect your money from fraud and crypto scams.

What is a Cryptocurrency scam?

It is another type of financial scam. Anyone wanting to invest in digital currency should take care as criminals could target you.

As Cryptocurrency is available to everyone with the relevant budget anyone could be the victim of an investment scam.

How can you protect yourself from fraud and scams?

Cryptocurrency isn’t protected by the Financial Ombudsman Service or the Financial Services Compensation Scheme as it is not a regulated financial product. You could benefit from using a regulated firm if you buy and sell cryptocurrency, but you will still only have limited protection if you are the victim of a cryptocurrency scam.

Below are some tips to help to protect you from cryptocurrency and other investment scams

- Don’t be caught out by fraudsters as many of them appear genuine and knowledgeable and will show you information and websites that don’t look fake.

- Be wary if you have been contacted out of the blue – scammers could contact you via email, text, social media, by post or even in person.

- Scammers may flatter you and say you have been singled out for an investment opportunity and might ask you to keep it a secret from family and friends.

- Make sure you research the company before you invest in it. Check it is authorised through the FCA Scamsmart website. You may also benefit from taking independent financial advice

- If a crypto currency deal promises exceptional returns, you should be sceptical as it probably is too good to be true and may turn out to be an investment scam.

- Don’t be pressurised to act quickly or be impressed with celebrity endorsements. Don’t reply to unsolicited crypto currency social media offers or phone calls.

- Don’t allow anyone to manage crypto currency investments remotely on your behalf. Don’t let someone else set up your cryptocurrency wallet or upload identity documents.

Simon Hawker, Managing Director at Lonsdale Services, St Albans, Hertfordshire said: 

‘We regularly talk to our clients about how to avoid financial scams, and they know to call us if they get an unsolicited approach from anyone.  Our recent article – How to spot a financial scam explains what to look out for when taking out a new investment.  We also recommend regularly checking the FCA Scamsmart website as it provides excellent information about how to spot a scam and will keep you up to date about any current financial scams. It also has a tool which allows you to check if the firm or individual who has contacted you is authorised to give investment advice.  It is important to check the FS register from the Scamsmart website address, don’t click on emails or check this from their company website as this could be part of the scam.  From the FCA Scamsmart website check that the firm reference number (FRN) and contact details match the contact details on the FS register.  The Take Five national campaign also offers impartial straightforward advice about financial scams.  Lonsdale Services has a strict policy, and our independent financial advisers will not action any emails for a fund withdrawal without speaking to our clients first to confirm their identity and authorise any withdrawal request.  If you are a Lonsdale Services customer and have any concerns about financial scams, please speak to your financial adviser.’

For more information read:

Visit the FCA Scamsmart to avoid a financial scam

Simon Hawker, IFA – Lonsdale Services voted in Top 100 financial advisers in the UK

Neil Homer Stafford – When should you pay for financial advice

Allan Ross, financial adviser – Protecting clients against financial scammers

Lonsdale Services wins Professional Adviser Award

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