GARDAÍ HAVE WARNED of an increase in investment fraud scams during the pandemic, with the majority of victims losing over €40,000.

During the Covid-19 pandemic there has been a 120% increase in these types of scams, which include investment opportunities in cryptocurrencies, rare metals, shares or overseas land investments.

Gardaí have said more people have become vulnerable to these scams during the pandemic because they are concerned about their finances.

Steven Meighan, Detective Inspector at the Garda National Economic Crime Bureau (GNECB), said in the last 12 months people have been particularly concerned about their finances and want to “make sure they have enough for a rainy day”.Before the pandemic, the majority of victims of this type of fraud were men over the age of 55, but since the start of the pandemic gardaí are seeing people from all age groups coming forward. 

In an eight-month period from January to August 2020, approximately €3 million was reported as stolen through an investment scam. The bureau is currently investigating 48 cases, with the majority involving €40,000 to €50,000. The largest sum involved was €250,000, which was lost by a retired professional who invested their life savings and a lump sum. 

Mighan said many cases involve virtual currencies because people may have read about them in the news and have some level of familiarity with them. Detective Inspector Meighan said some people seek out these investments and come across websites that look professional, with false endorsements from celebrities.

“It’s important to note that these celebrities have nothing to do with it, their images are just being used,” he said. “And there is nothing illegal about the things they [the scammers] are trying to sell. People can legitimately buy rare metals, cryptocurrencies and properties abroad, but all of this is just a lure.”

He said in some cases people receive messages through social media telling them about a “great money-making scheme”.“Then they’ll get a phone or video call. The fraudster will call and say they’re an investment manager, they’ll show you lots of glossy brochures and charts and returns and tell you that if you give them money they’ll invest it in bitcoin and give you a 20% return in two weeks.Meighan said the scammers will present as well-dressed professionals on video calls who often “bamboozle people with the language and the charts”.

“Then they’ll say ‘I’ll take the hassle out of it for you, download this software onto your computer’. This hands remote access to the person and they’ll open legitimate accounts, the injured party will enter details, maybe a copy of their passport,” he said.“The scammer then has your username, password, all your security questions and sometimes even your bank account information and password. All they have to do then is transfer your money away.”

The money is usually transferred into a legitimate cryptocurrency exchange in Europe and then quickly moved outside Europe to third countries where it is harder for gardaí to trace it.

This crime is under reported, Meighan said, because many people are embarrassed that they were “caught out”. “When we work with our money laundering colleagues in the banks and other institutions and with Europol and Interpol, we can see where the money is flowing to and where it’s coming from and we can see how under reported it is,” he said.

Detective Inspector Meighan said anyone who reports these scams to gardaí can be assured of “absolute confidence”.  Although in many cases the money can not be recovered, he said there is a chance if people report the crime early. 

“We’ve had some good successes if the money is still in Ireland or in the EU. The sooner people report it the quicker we can take action,” he said.“The initial step is a transfer from an Irish bank account to a well-regulated exchange in Europe and if reported early enough it’s possible those transactions can be frozen and recalled and the money recovered. The longer it goes on the more difficult it becomes to recover.”  

 

How to avoid Investment Fraud scams?

• If it is too good to be true, it probably is
• Do your own research and be wary of wild claims
• Always seek independent financial and legal advice before making any investments
• Check the various registers on the Central Bank of Ireland’s website
• Use regulated investment firms where possible (Virtual assets are not currently regulated in Ireland)
• Do not respond to unsolicited approaches or cold-calls
• Don’t click on links for websites that you don’t know
• NEVER EVER disclose your bank account passwords or codes
• NEVER allow anyone remote access to your computer

Further information on investment and other fraud types can be found on www.garda.ie and www.fraudSMART.ie