In late February, a reader whom we shall refer to as Joan discovered an article on Facebook which appeared to be from a trusted Irish news outlet. The article chronicles the story of a well-respected Irish TV personality making significant profits from a wisely chosen cryptocurrency investment. The piece was laden with testimonials from famous Irish celebrities who, too, had amassed considerable wealth from cryptocurrency.
You would likely see where this story is headed, wouldn’t you? Regrettably, Joan didn’t.
“There was a hyperlink buried within the story, which I clicked on and registered to receive a phone call,” writes Joan. “Barely five minutes later, a man rang me, queried about my age, then upon knowing I was in my 50s, offered a discount on a deposit.”
The usual deposit was €250, but he enrolled her for €200, which Joan found delightful.
“I provided him with my credit card information for the transaction. He explained that the system operates on Artificial Intelligence and assured that my sole responsibility was to observe my investment flourishing. He then informed me that an account manager would be assigned to me who would contact me the next day to prepare me for trading.”
As promised, a call arrived the next day from an individual named Max who claimed to be the ‘investment manager.’ With his guidance, Joan downloaded an application that reflected her €200 had grown to €208.
“In my gains, he would take a 10% commission cut, and his earnings would be deducted in mid-April, Max conveyed to me,” Joan recollects.
“He further asked me about the amount I aimed to gain, to which I replied, a couple of thousands of euros would suffice. He opined that it would be challenging to achieve such a profit with a €200 deposit, so he sampled some potential earnings if I invested more money. He suggested that Bitcoin was experiencing its all-time high and forecasted an imminent ‘housing’ profit by mid-April 2024. He further stated that the more substantial the investment, the higher the returns. When I questioned about its location of operation, he mentioned Switzerland. Max and I were in touch every 2-3 days, mostly discussing my progress,” Joan writes.
Two weeks after their initial interaction, Joan received a request from Max on Telegram. He informed her that his compliance department required identification for compliance procedures. Consequently, she sent him photos of both sides of her driving license and a selfie of her holding the license. By the end of March, Joan had invested €8,500 into this venture.
In mid-April, Joan inquired about the future of her profit balance. Max informed her that withdrawing her funds would spare her any tax liabilities. However, if she chose to leave some or all of her funds in the account, tax would be applicable only on the profits. Max explained that a tax certificate from Switzerland, where the tax rate ranged 15-20%, would be provided.
Max, the ever-pleasant individual, sent Joan a warm Easter greeting for her and her family. Occasionally, he’d ask if she needed to withdraw funds, an offer she always declined, preferring to let her investment grow.
Joan later realised that these inquiries about withdrawal were intended to ascertain whether she’d be willing to pay a tax to withdraw her funds, a clear hint that more money was expected from her.
When Joan disclosed her investments to a friend at the end of March, her friend grew suspicious of a potential scam. This prompted Joan to look up the company online, where she found numerous reviews branding it as a scam. This revelation stirred a sense of unease in her, stirring doubts that she might have fallen victim to a scam.
In a recent incident, an individual named Max was put to the test when a client asked him to facilitate a withdrawal of her investment on the 4th of April, 2024. Max responded by sending her a ‘withdrawal form’ demanding a tax and commission payment of €1,800 for withdrawal of €9,000. The client, however, expressed her inability to pay the tax and commission burden, instead, she expressed a wish to retrieve her initial deposit, thereby avoiding any tax obligation. When warned about potential losses, she highlighted her financial difficulties and insisted on the return of her deposit – the remaining €8,500.
While she was told that her withdrawal would take about a week, by April 8th, Max had reportedly not only cleared their conversation history over the Telegram app but also disappeared along with her credentials to access her investment account. The stark truth is that these signs point towards a high likelihood of her falling prey to an investment scam, with slim chances of recovering her money.
These facts were reported to Niamh Davenport from FraudSmart, which is the Banking and Payments Federation of Ireland’s division targeting cybercrime. The unit highlighted the increasing instances and sophistication of investment scams, including those involving cryptocurrencies. Fraudsters use seemingly authentic websites, social media, and online adverts to lure victims with the promise of high returns only to procure their personal and financial data.
Once the client authorises a transaction and the payment reaches the fraudster’s bank, the money is quickly distributed across numerous accounts, often offshore, from where it is cashed.
Davenport emphasised the need for victims to report any suspicions of fraud to their respective banks and An Garda Síochána immediately. She assured that all such cases would be thoroughly investigated, with banks and other financial institutions striving to help their customers recover their money, wherever possible.
Ms Davenport advises that due to the increase of scammers directly approaching customers, it’s essential that we understand how to safeguard ourselves. Specifically, individuals should be wary of advertisements on the internet and social media, even those that are paid, sponsored or leverage known brands or businesses. It’s advised to take a moment to think and reach out to the organisation separately to validate the specifics.