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Are you at risk of losing money in an online scam?

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Many of us rely on social media for keeping in touch with friends and family, keeping up to date with news and events, and following our favourite sports personalities and celebrities. However, be careful and don’t believe everything you see online.

Recent news reports have highlighted the danger of believing everything you read. This isn’t ‘fake news’ but relates to scammers taking over genuine Instagram or Snapchat accounts, posing as the account’s owner and persuading followers to transfer money or share their account login details, in return for the promise of ‘money making’ cryptocurrency investments.

Alex Bosley, a rising star in the world of cycling, was the victim of such a fraud. His popular Instagram account was taken over by scammers in November 2021 and it was 3 months before Meta, the platform’s owner, did anything to get it back. During that time, dozens of Mr Bosley’s followers and friends lost over £100,000 to the online fraudsters who had persuaded them to invest in cryptocurrency schemes.

Mr Bosley said, after he and his friends made over 1000 complaints to Meta:

“They are allowing people to use their platforms to scam people and they do nothing about it”

Many of the people who lost money were young adults, who may be financially naïve and more vulnerable to fraudsters. Enticed by the prospect of making money quickly through cryptocurrency investments, they are often unaware of the risks or do not realise that the investments are unregulated.

Meta have said they are investing more money and resources into tackling fraud and have made a considerable donation to the Citizens Advice Bureau to raise awareness.

Cryptocurrency, such as Bitcoin or Ethereum, is increasingly being used in transactions across the world. Seeing this opportunity, scammers have used promises of financial ‘quick wins’ to persuade would-be investors to transfer money to build cryptocurrency portfolios. Many people see cryptocurrency as a new and exciting investment, hoping for large and quick financial gains, but it is not without considerable risk, given that many of the firms involved are unregulated.

Authorised Push Payment (APP) fraud, or bank transfer fraud is where the scammer gains the victim’s trust through often online marketing techniques and manipulation. Usually starting with a small, low risk investment, the victim is persuaded to send money from their bank account. This then quickly escalates to more regular and higher payments.

As the fraud victim believes the transfer is genuine and legitimate, the money is often lost before any alarm bells ring and the victim may be too embarrassed to do anything about it. These payments are usually made abroad, often making it impossible to trace or recover what has been lost.

Urgently contact the police and also your bank if you think that you may have been scammed. You can also report any suspected scamming activity to Action Fraud, the National Fraud and Cyber Crime Reporting Centre.

There may be a criminal investigation by the police if you have lost money as a result of the fraud. If a criminal prosecution is successful, the court can order compensation. But this is not always possible, particularly if the fraudster is overseas or has no assets with which to pay any compensation.

In addition to criminal proceedings, you may have the basis of a complaint and claim against your bank if you feel that they did not do enough to protect your account.

Our Head of Professional Negligence, Sarah Spruce, said:

“Banks and financial institutions are tightening their rules and processes to help reduce APP fraud as happened in Mr Bosley’s case, but fraudsters are usually one step ahead. We have worked with clients who believed the transactions they were making were genuine and legitimate, so their money was lost before alarm bells rang.

Authorised push payment (APP) fraud is becoming increasingly common and can affect people of all ages and walks of life. For this reason, we urge people to be vigilant – as well as looking out for your own financial protection, also watch out for close family and friends, particularly the elderly or young adults who may not be used to managing their money and are susceptible to online ‘get rich quick’ schemes, such as investing in cryptocurrency. Victims often feel too embarrassed to say anything about being scammed, but it is important to report the crime quickly and seek help.”

Currently, banks are only encouraged to refund money lost due to APP fraud – and not all will pay out. Where there is a dispute between the bank and customer, a complaint can be made to the Financial Ombudsman Service (FOS). FOS will examine the circumstances of the scam and the bank’s response, given that banks will be more familiar with such fraud than their customers. We have previously reported on a case where a cybercrime victim of APP fraud relating to cryptocurrency investment recovered substantial compensation from FOS.

Our specialist APP fraud team has years of experience in successfully dealing with complaints to FOS. We understand the claims process, the information that needs to be gathered and the time limits that apply.

If you, a friend or a loved one has been conned into making payments to investment fraudsters, then please get in touch with our specialist team for a confidential, no-obligation discussion. You can call us on 0800 169 5925, complete the callback enquiry form or email info@tlwsolicitors.co.uk.

Time limits can apply and so anyone wishing to bring a claim should do so without delay.

Meet Our Team

Meet Sarah, who heads up our experienced Authorised Push Payment Fraud Claims team.

Sarah and her colleagues are on hand to help with your claim.

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