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APP Fraud and Scam Compensation

Crypto Scam Recovery Claims:
Refunds for Authorised Push Payment (APP) Fraud

Quick Guide

  • Online scammers are taking advantage of people who see investing in cryptocurrency as the ‘next big thing’ and a quick way to make high-value returns.
  • If you have lost out to cryptocurrency investment fraud then TLW may be able to help claim from your bank as they have a duty to protect their customers from fraud.
  • Our specialist team work on a no-win no-fee basis, you pay us nothing if your crypto scam compensation claim is unsuccessful.

Lost money due to a cryptocurrency investment scam or fraud?

You may be entitled to compensation if your bank failed in its duty to protect you.

Regrettably, we cannot assist if:

  • You transferred your money to the scam before July 2019.
  • You transferred money using a bank which is not UK based.

What is cryptocurrency?

Cryptocurrency is a digital currency – it doesn’t exist in the physical sense but can be invested or traded in much the same way as traditional stock and shares. How it exists and is transferred between people is complex, but investors have an encrypted digital ‘wallet’ containing cryptocurrency units. Many people see cryptocurrencies such as Bitcoin, Litecoin and Ethereum as a good opportunity for investment, hoping for rapid and high returns.

If you have lost out to cryptocurrency investment scammers, TLW Solicitors may be able to help you claim a refund.

Start Your Compensation Claim Online

or call us on 0800 169 5925

Cryptocurrency scams, like many other financial scams, can leave people feeling tricked and embarrassed. Banks have a duty to apply due diligence when looking after your money and must have procedures in place to protect vulnerable customers, highlight unusual or high-value transactions and block or delay them, where appropriate. In the first instance, your bank should be asked to investigate fraudulent transactions.

If the bank refuses to refund the lost money, a complaint can be made to the Financial Ombudsman Service (FOS). FOS is a Government backed body set up to resolve disputes between banks and their customers. When a complaint is made to FOS, they will conduct an independent review to establish what would have been a ‘fair and reasonable’ response from the bank.

There have been a number of recent FOS decisions supporting customers who have been the victim of a push payment scams, including cryptocurrency scams.

As the claim is made against the bank, this can help circumvent the anonymity and complexity of the blockchain.

Many push payment scammers appear professional and genuinely interested in helping you make good returns on your investment. They use sophisticated online marketing techniques including social media and email to get potential cryptocurrency investors interested in making quick and substantial returns.

Once they have made contact, the scammers initially gain your trust by asking you to transfer a small amount to invest in cryptocurrency. You may well have access to an online trading account and see that your money is there and growing, as promised. There then usually follows more demands for money, for increasingly large amounts, with increased urgency.

Then out of the blue (or upon a request to withdraw money), access to your investment account is blocked, your investment manager cannot be reached, and your money has disappeared.

Like many financial frauds, crypto scammers are using increasingly sophisticated ways to trick people into parting with their hard-earned cash. Some of the common scams include company impersonation, stolen ‘wallets’ or illegal trading.

Scammers have created fake cryptocurrency trading websites, fake social media channels and fake crypto wallets using very similar domain names to legitimate ones. These clone firms may include testimonials and trading records, to make the sites appear more trustworthy and believable.

Other sites are designed to be phishing pages – to steal your personal information, including genuine passwords and recovery phrases you hold to genuine crypto wallets. Once they have your details, passwords can be changed, so you no longer have access to your own accounts.

Since January 2020, crypto asset businesses must comply with Money Laundering Regulations and be registered with City watchdog, the Financial Conduct Authority (FCA). Any firm not registered with the FCA is trading illegally and should have returned any crypto assets to its customers and stopped trading by January 2021.

Authorised Push Payment (APP) fraud is where you give permission to your bank to make the transfer to the other person’s bank account, believing they are a genuine company, not a clever impersonator who is scamming you.

Unfortunately, online APP fraud is becoming increasingly common. An authorised push payment is one where you authorise your own bank to make the transaction. Once the authorised payment is made, the scammers usually transfer your money into another account, often overseas, details of which you never know, so the money is effectively lost.

If you are paying for goods or services with cryptocurrency, double-check that the retailer you are dealing with accepts crypto as a means of payment – not all do.

If you are investing in cryptocurrency, watch out for people who contact you out of the blue for example through social media, email campaigns, messaging apps or by phone, guaranteeing high returns, quickly. If it seems too good to be true, it probably is! The value of cryptocurrency goes up and down frequently and so there are never any guarantees as to how cryptocurrency investments will perform.

If you are researching cryptocurrency investments online, watch out for online adverts that look professional and link to genuine-looking websites.

Do your research:

  • Are they registered with the FCA?
  • Have there been any complaints against them?
  • Is the firm genuine or a clone, pretending to be someone else?

If you are not sure, take your time and don’t be rushed into making an investment. Speak to family and friends and seek advice from an independent financial adviser.

The short answer is very little. Cryptocurrency investments may not be FCA regulated. They are considered very high, speculative investments and you should be prepared to lose all your money if something goes wrong. If they are not FCA-regulated, then you may not be able to get help from the Financial Ombudsman Service (FOS) or Financial Services Compensation Scheme (FSCS).

If you think you have been the victim of a cryptocurrency scam, contact your bank immediately and report it to Action Fraud, the National Fraud and Cyber Crime Reporting Centre. If you have lost money, that may lead to a criminal investigation by the police.

If criminal proceedings are taken and there is a successful conviction, then the Court can award compensation. However, it can sometimes be difficult to trace the fraudster, particularly if they are abroad, or they may no longer have any assets with which to pay any compensation.

As the world becomes more and more digital so, it seems, is our money, even to the point where currencies are becoming digital. Cryptocurrencies are a form of digital asset that uses blockchain technology and encryption to secure transactions.

The attraction of cryptocurrencies for investors is that it is decentralised, so doesn’t rely on banks, and allows them more freedom to diversify their investment portfolio. The volatility of crypto also gives it the potential to return impressive gains (and also hefty falls).

Bitcoin is probably one of the most well-known cryptocurrencies, introduced in 2009 as the one of the first decentralised virtual currencies. Its popularity can also be attributed to its security measures – transactions are secured using advanced cryptography, which make it virtually impossible to counterfeit or manipulate transactions with the currency.

As impressive as this sounds, however, it does not make Bitcoin investors immune to the tactics of sophisticated and ever evolving cybercriminals looking to get their hands on your hard-earned money.

While Bitcoin itself may claim to be more secure than traditional currencies, the convenience, returns and popularity of it and cryptocurrencies generally, make it a target for scammers.

Cybercriminals are using sophisticated tricks, such as impersonation, manipulation and social engineering techniques to con unsuspecting investors out of thousands of pounds. Some of their tactics include:

  • Posing as a genuine crypto investment firm, and convincing victims to transfer their money or crypto wallets.
  • Using the lure of ‘free coins’ or credits to convince victims to put money into a crypto wallet – in the hands of the fraudster.
    In the UK, all businesses trading in cryptocurrency assets must comply with anti-money laundering (AML) regulations, counter terrorist funding (CTF) regulations and be registered with City watchdog, the Financial Conduct Authority (FCA).

The FCA also publishes a warning list of unauthorised firms, so anyone thinking of investing in Bitcoin, or any other cryptocurrency, should always start by checking that list before parting with any money.

Any cryptocurrency investor, whether they are making their first foray into investment or already have a sizeable portfolio, should make – and keep – themselves aware of the red flags of cryptocurrency fraud, such as a Bitcoin cryptocurrency scam. Some warning signs include:

  • Being contacted out of the blue.
  • A sense of urgency, time limitations or pressure.
  • Secrecy around the investment, such as being told not to share the information with friends or family.
  • Fake websites.
  • High-profile celebrity endorsements.

The most important thing to remember when considering investing in Bitcoin, or any other cryptocurrency, is that if it seems too good to be true, it more than likely is.

Genuine firms will not pressure you into making a quick decision or become angry or aggressive if you decide to take some time to consider your options. If there is any suspicion about whom you are talking to, check the FCA website, online reviews, news articles and double check that the details you have are for a genuine investment firm.

If you believe that you have been the victim of a Bitcoin investment scam, the first thing you should do is contact your bank, the police and Action Fraud, the UK’s fraud reporting service, immediately.

In the UK, banks have a responsibility to consumers to detect and prevent scams in a number of ways:

  • Monitoring accounts to detect any suspicious activity.
  • Pausing, or completely blocking, transactions that do not seem genuine.
  • Adding extra security steps for payments of a certain type, or for new payees.
  • Intervening directly in relation to any suspicious transactions, for example to overseas accounts, or for large, unusual amounts which are out of character for the account holder.

APP scam tactics are constantly changing to get around banks’ security measures. However, as experts, banks should also be keeping up to date with the latest reports in the industry and updating their processes to keep ahead of the scammers.

If you have been targeted by a Bitcoin scammer, using your bank account to make transactions, and your bank is refusing to reimburse the lost funds, you may be able to make a claim for an independent investigation if you believe there was more that could have been done to prevent the scam.

The Financial Ombudsman Service (FOS) is an independent, Government backed organisation that investigates and resolves disputes between consumers and financial firms in the UK.

Cryptocurrency is a type of digital asset that uses encryption techniques to secure and verify transactions, through blockchain technology, rather than relying on centralised banks. Ethereum is an open source blockchain platform with its own cryptocurrency called Ether, which has emerged as one of the most popular crypto platforms since its launch in 2015.

Investing in cryptocurrencies has become a popular choice for those looking for potentially high return investments or to diversify their investment portfolios.

However, as with any activity involving the movement of money, cryptocurrencies like Ethereum are not immune to scams or fraud. As with any investment, if it seems too good to be true, then it probably is!

Where there is money, there is fraud, and Ethereum crypto scammers are using increasingly sophisticated methods to con people out of their savings including impersonating genuine investment firms and using stolen crypto ‘wallets’.

In the UK all crypto asset businesses must comply with Money Laundering Regulations and be registered with City watchdog, the Financial Conduct Authority (FCA). Any firm not registered with the FCA is trading illegally and should have stopped trading by January 2021. It’s important to be aware of these scams and to do your own research, such as checking the FCA warning list, before investing in cryptocurrencies.

Whilst scammers are becoming increasingly sophisticated with their tactics to get access to your cryptocurrency assets, there are a number of red flags that might suggest that your ‘exciting investment opportunity’ in Ether may not be all it seems, warning signs include:

  • Unsolicited or unexpected contact: always take your time to research and verify anyone who gets in touch out of the blue about an investment, even if you have filled out a call-back form online.
  • Pressure and urgency: scammers will likely use high-pressure tactics and a sense of urgency or give time limits to convince you to make a payment without giving you the chance to think it through properly and take advice. Always take your time, a legitimate firm will not pressure you.
  • Asking for personal details: never give your personal information or passwords to anyone, whether it is for your bank account, email, phone, computer or crypto wallet.
  • Flashy websites and social media accounts: Scammers can create fake websites or social media accounts that look very similar to real cryptocurrency exchanges or wallet providers, they may even use celebrity endorsements to make the scheme seem more legitimate. Always double-check the authenticity of a website or social media account before making any transactions.

If you suspect that you may have been the victim of an Authorised Push Payment Ethereum scam, contact your bank, the police and Action Fraud, the UK’s fraud reporting service, immediately. Your bank should investigate the report, and sometimes the police may start a criminal case.

While you may initially feel embarrassed or ashamed to have been the victim of a targeted cryptocurrency scam, there is no need to feel that way. For these criminals, scamming people is a business, a full time job and they are getting increasingly good at it, always developing their tactics to make the most from unsuspecting victims.

Banks in the UK have a duty of care to consumers to detect and protect their customers from fraud, such as cryptocurrency related Push Payment scams. This includes:

  • Security checks.
  • Data protection measures.
  • Processes to highlight suspicious activity.
  • Acting swiftly to pause or stop payments entirely if they do not seem legitimate.

If your bank has failed to sufficiently protect you from a cryptocurrency scam and refuses to compensate, you may be able to take your case to the Financial Ombudsman Service (FOS), for an independent investigation. FOS is an independent, Government backed body responsible for investigating disputes between financial institutions, such as banks, and their customers.

Our team can help – we have many years of experience in financial claims, including dealing with FOS cases. We understand the process, the time limits to be followed and the often complex legal arguments and defences the bank may raise.

Combining our experienced team and digital case management systems means we proactively pursue your claim and aim to get the best possible results.

As the claims are made against the banks that allowed the payments to be made, this can help circumvent the anonymity and complexity of the blockchain

The specialist fraud team at TLW Solicitors are helping many clients recover refunds on a no-win, no-fee basis. If you have a claim, we will deal with your claim from start to finish, whilst keeping you up to date as the case progresses.

The steps in the claims process are:

  1. Submit your claim with us by completing either the online claim form, request a callback, telephone our office, or email us using the contact details provided.
  2. A member of the fraud team will discuss your claim with you and advise whether you may have a claim that we can deal with.  If we can assist you, we will send you our welcome pack which contains useful information on what to expect throughout your claim as well as details of what information we’ll need from you.
  3. You will be assigned a case handler. If following an initial assessment of your case we think you have a claim, we will be in touch to go through the next steps. If we don’t think you have a claim, we will provide our reasons why so that you may consider other options.
  4. Your case handler will ask for and review any additional documentation needed to progress your claim, this will include contacting the banks involved on your behalf. You will be kept up to date by email and phone calls if required.
  5. Depending on the circumstances of your case and due to a wide range of factors outside of our control, making a refund claim can take several months to complete – as your case progresses, we will try to give you as much information as possible about the likely timescales. We will continue to update you on your claim, and you will be able to contact your dedicated case handler if there are any issues or concerns.
  6. We work on a ‘no win, no fee’ basis, which means that if your claim is unsuccessful, there will be no charge for the work we do.

Members of TLW Solicitors’ APP Fraud and cryptocurrency scam team have been featured in a BBC One series, ‘Northern Justice’. Episodes from the programme show how TLW lawyers helped scam victims recover substantial compensation. Full details about the BBC series and how TLW successfully supported our clients can be found here.

We offer a free, no-obligation assessment of your case and will make a decision on whether or not to pursue your claim. If we do take on your case, we operate on a ‘no win, no fee’ basis, meaning you do not pay us anything if your refund claim is unsuccessful.

If you think that you, your friend or a relative has been the victim of a cryptocurrency scam, then please get in touch with our specialist team for a confidential, no-obligation conversation.

You can call us on 0800 169 5925, email info@tlwsolicitors.co.uk or complete either the make a claim online or callback forms below.

It is important to get advice as soon as possible as strict time limits can apply.

Meet Our Team

Meet Sarah, who heads up our experienced Crypto Scam Claims team.

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

TLW Solicitors pledge to:

  • Always fight your corner.
  • Explain anything you don't understand.
  • Provide full transparency on our charges.
  • Never ask for any upfront payment.
  • Recover the best compensation we can.
  • Keep your personal information safe.
  • Respond quickly to any queries.