Santander Customers Losing £1m to Crypto Scams Every Month

Lured by online advertisements for unmissable investment opportunities and reeled in by influencers, Santander UK customers are reporting losses of £1 million a month to crypto scams, with the largest thefts involving remote access hijacking of their device.

In these devious scams, fraudsters pressure would-be investors to download software to support them opening cryptocurrency accounts, preying on users ignorant of the high-tech and often byzantine world of cryptocurrency. However, these downloads of remote access software give the cheat full access to the target’s computer. 

When the victim then opens a crypto account and deposits money in it, the scammer can hijack it, freezing out the customer and making off with both their fiat currency and any cryptocurrency they hold. These losses are usually unrecoverable.

In one case highlighted by Santander, a “Ms C” followed someone on social media who promoted crypto investments. She messaged the user, asking for help starting her own investments. Over a period of three weeks that user persuaded Ms C to transfer £3,200 into two accounts, presumably money they would use to open accounts on a crypto trading platform for her. 

However, Ms C never received any official documentation and, after she received another request for funds from a different name and questioned it, the social media account was deleted and she was unable to reach her crypto contact again. When she contacted the trading platform, she was horrified to discover they had no accounts registered under her name.

When Santander attempted to recover her money, it found that all the transfers were spent by the recipient with an hour of being made.

The targeting of Ms C over social media is typical of crypto scams: Instagram, Discord, Reddit and other platforms are flooded with advertisements and posts from investment influencers promising unbelievable returns. Many times these promotions will use the likeness of a celebrity or are directly flogged by the celebrity themselves. Even Kim Kardashian, among the most-followed faces in the world, has promoted altcoins through social media.

Santander says would-be crypto traders shouldn’t see a celebrity’s seal of approval as a guarantee an investment is safe.

Chris Ainsley, head of fraud control at Santander UK, said: “We’re seeing more and more cases where fraudsters use complex cryptocurrency jargon, high pressured sales tactics and fake celebrity endorsements, along with the promise of significant rewards, to lull people into a false sense of security.

“Now more than ever, it’s so important to take the time to research where your money is going before you make a payment. If you don’t, you risk simply never seeing it again.”

Researching should involve checking through regulator the Financial Conduct Authority’s (FCA) website if the company you’re buying crypto from is a legitimate registered firm, not unregistered, a clone or fake. You should call the number listed on the FCA’s website before you set up a payment to a firm and every future time you make a payment, even if you think it’s going to the same place you transferred funds before.

You should also check the FCA’s ScamSmart, a tool that can help you identify whether an investment is legitimate and whether it’s on the FCA’s Warning List of known scams.

Santander says customers should never allow anyone to remotely set up a cryptocurrency wallet on their behalf, upload their ID documents or manage investments for them.

Crypto scams increased in prevalence and cost over the pandemic: Action Fraud received 5,581 reports about crypto investment scams in 2020, involving losses totalling more than £113 million, on an average or more than £20,000 each. Action Fraud says just one in 10 crypto scams are reported to it, suggesting the scale of the problem is much larger.

In July, Santander blocked all payments from UK customers to major cryptocurrency trading platform Binance over concerns about scams operating over the exchange, as did Barclays and NatWest.