Increase in cryptocurrency fraud complaints to the Ombudsman

There has been an increase in cryptocurrency fraud complaints to the State Board of Financial Disputes.

And the Financial Services Ombudsman said he’s still getting complaints about losing tracker mortgages, more than 12 years after he received his first tracker case.

Last year, 250 mortgage complaints were received.

Acting Ombudsman MaryRose McGovern said her office has seen a “noticeable increase” in the number of complaints from people who thought they were investing in crypto assets but ended up losing all their money.

She said the financial and personal impact of these fraud incidents is very significant.

One person lost €60,000 over a three-month period when they instructed their bank to wire funds to what turned out to be a fraudulent company.

Some of the crypto scam victims had borrowed amounts of up to €20,000 to make additional investments in what they believed to be cryptocurrency and later discovered the systems were a scam.

Another complainant lost €29,000 when he was tricked into using a false IBAN to transfer his money, according to a 2021 complaints overview released by the Ombudsman’s Office.

Typically, consumers make a small investment, some investing around €250 in a cryptocurrency asset.

It increases in value, prompting promoters to convince them to invest up to €50,000.

The consumer often borrows around €20,000 as this is the amount they can get a loan for.

When all the money is lost, they go to the bank they borrowed the money from to get the money back.

The bank refuses and a complaint is lodged with the ombudsman.

In most of the complaints published by the Ombudsman, the money has not been recovered.

However, in one instance, a bank granted an overdraft facility with the money to be used to invest in cryptocurrency.

The bank agreed to settle the overdraft, saying it shouldn’t have approved it knowing the client intended to invest in cryptocurrency.

Ms McGovern said: “Consumers should be aware of the risks associated with investing in unregulated activities such as cryptocurrency trading, which very often carry greater risk and volatility than regulated product offerings.”

She said consumers need to be extra vigilant if they don’t know the financial services provider they’re dealing with.

You need to check whether the financial service provider is regulated and whether the protections required by the consumer protection framework are in place.

Mortgage complaints accounted for nearly a quarter of all complaints received by the Ombudsman in 2021.

That includes 250 new mortgage complaints in the last year, about 12 years after the first mortgage complaints were received in 2009.

A large number of complaints about trackers remain unconfirmed, Ms McGovern said.

“Many people continue to believe that they are entitled to a tracker mortgage rate either from the time they took out the mortgage loan or from some date during the life of the mortgage loan, even though they have no contractual or other right to one such a rate,” the report said.

The Bureau has 1,017 active tracker cases that it has yet to resolve.

The Financial Services and Pensions Office is a government-supported service that operates free dispute resolution services for consumers and small businesses who have complaints about financial services and pension providers that they cannot resolve.

The Ombudsman’s office received 4,658 complaints last year and oversaw the payment of €7 million to consumers in compensation. Around 5,010 complaints were resolved in 2021.

A quarter of the complaints related to poor customer service. And the majority of all complaints concerned the banking sector.

More than a quarter of the cases submitted to the Ombudsman concerned insurance companies.

In 2020 the Ombudsman received 600 complaints related to Covid and a further 275 in the past year. Increase in cryptocurrency fraud complaints to the Ombudsman

Fry Electronics Team

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