At the end of February a reader who we will call Joan was on Facebook and came across an article that looked like it had come from a reputable Irish news source highlighting how a reputable Irish television personality had made a serious amount of money following a judiciously placed investment in cryptocurrency.
The article was peppered with quotes from other well-known Irish celebrities who had also made a lot of cash in crypto.
You probably know where this is going, right?
But Joan didn’t.
On the Money: the personal finance newsletter from The Irish Times
Christmas dinner for under €35? We went shopping to see what the grocery shop really costs
One in four PAYE workers are overpaying tax. Can you claim money you’re owed?
Typical price paid for home by first-time buyer up €88,000 on five years ago
“There was a link in the content and I clicked on the link and signed up to receive a call,” she writes. “Within five minutes a guy called me, asked me some questions about my age and, because I was in my 50s, he offered me a discount to make a deposit.”
He told her the deposit was normally €250 but he signed her up for €200. Happy days, she thought.
“I gave him my credit card details to make the payment. He told me that the platform worked on Artificial Intelligence and that I would have nothing to do but watch my investment grow. He then told me that I would be assigned an account manager who would phone me the next day to set me up for trading.”
Sure enough the call came and the “investment manager” – a man called Max – had Joan download an app on which she could see her €200 was now €208.
“Max told me that he operated on a 10 per cent commission made from my profits and he would deduct his commission in mid April,” she says.
“He asked me how much money I wanted to make and I said a few thousand euro would be great. He said I would not make that kind of money with a €200 deposit, so he gave me some profit figures if I could deposit more money. He told me that bitcoin value was at an all time high and that a ‘housing’ profit was coming mid April 2024 and that the more I had invested, the more profit I could return. I asked him where was this company based and he said Switzerland. Max and I spoke every 2-3 days on the phone, mainly him updating me on my profits,” Joan writes.
Then, two weeks after the first contact, Max sent Joan a message on Telegram saying “his compliance department needed identification from me for compliance, so I sent him pictures of my driving license, back and front, he also asked for me to send him a shot of me holding my driver’s license”.
By the end of March, Joan had invested €8,500.
“I asked Max what would happen to my profit balance in mid April and he said I could withdraw some or all of my money in which case I wouldn’t pay any taxes. If I left some or all of my money there, I would have to pay tax, but I would only pay tax on my profit,” he said.
“He told me I would receive a tax certificate for tax paid in Switzerland and the rate of tax there is 15-20 per cent. This Max guy even sent me a very nice Happy Easter message to me and my family! He sometimes asked if I needed to withdraw money to which I said ‘no’ and that I was happy to keep my investment growing,” Joan says.
“I now realise that he was asking me this question because if I did want to withdraw some of my money, that he would tell me there would be a tax to be paid and would have asked me to hand over more money for this withdrawal.”
At the end of March she told a friend of her investments.
“She was really suspicious that I had been scammed and when I googled the company all the reviews were saying it was a scam. I got very nervous then about the fact that I could have been scammed,” she continues.
“So I tested the Max guy by asking for a withdrawal of my money on Thurs 4th April 2024. He sent me on a ‘withdrawal form’ which set out that I would have to pay tax and commission of €1,800 for withdrawing the €9,000. I told him that I didn’t have any more money to pay the tax/commission. I said that I wanted to withdraw my deposit in which case I didn’t have to pay any tax. I then told him that I wanted to close on my deposits (this is how he referred to my money on the exchange market) and he told me I was making a very big mistake that I was going to lose all my profits. I told him I was in a financial crisis and that I need my deposit money, which was now €8,500.”
Max told her she would have to wait a week to get the money out and Joan thanked Max for his help.
“On Monday April 8th I opened up the Telegram App to send Max a message about getting my money and discovered that Max had deleted all our Telegram conversations and that the login to my investment account was also gone.”
The depressing reality is that her money is most likely gone for good as she has clearly fallen victim to an investment scam.
We sent the details to Niamh Davenport from FraudSmart, the anti cybercrime unit of the Banking and Payments Federation of Ireland.
“Investment scams, including cryptocurrency scams, are on the rise and becoming increasingly more complex and sophisticated,” she says. “Fraudsters hide behind websites, which can appear to be legitimate and use social media and online advertising to target victims with promises of high returns, often leading people to share personal and financial information.
“Once a victim has authorised a payment and the money has reached the fraudster’s account, the criminal will quickly transfer the money onwards to numerous other accounts, often abroad, where it is then cashed out.”
She stresses that anyone who believes that they have been a victim of a fraud should report it to both their bank and An Garda Síochána as soon as possible. Every reported case of fraud is investigated thoroughly and banks and financial institutions will do their best to assist customers in recovering their funds, if possible.”
Ms Davenport adds that because fraudsters are increasingly targeting consumers directly, “it important for us all to know how to protect ourselves. In particular, the public should be cautious of adverts online and on social media platforms, even if they are paid or sponsored ads using familiar brand or business names. Pause for thought and contact the company independently to verify the details.”
