Police in London have shut down a ‘boiler room’ in the city’s center that was looking to entice people by cold calling them to invest in a fraudulent, and non-existent, cryptocurrency.
Discovered in the heart of London’s square mile, around the corner from the Bank of England, a large call center was found to be cold calling potential investors, selling the hype that has surrounded cryptocurrencies recently. However, they were selling a false dream as their product was fraudulent, fake, and non-existent digital currency.
A man was arrested on suspicion of helping set up this call center which had been lucrative in its fraudulent activities thus far. Nine victims reported to Action Fraud, the UK’s consumer fraud, and cyber crime watchdog, that they had lost an estimated £160,000 in total.
In an article in The Telegraph, a police spokesman explained the scam:
Victims were cold called by salespeople who allegedly persuaded them to invest in a cryptocurrency that does not exist and is therefore worthless.
An Attractive Proposition
The fraudsters used the recent boom, and mainstream media attention, that has followed digital currencies such as Bitcoin in order to entice investors with promises of huge returns. The claims they were making were hard to ignore, but not entirely false as Bitcoin’s value alone has increased by $3,680 per coin alone this year.
On top of that, the excitement and promise of ICOs have many investors scrambling to be a part of the next big coin as these investment opportunities offer huge returns in small amounts of time.
In this instance, however, the fraudsters were offering people access to a coin that does not even exist in a clear scam. It led to a number of people reporting these activities to Action Fraud which led to the police getting involved.
New Breed Of Investment Fraudsters
Investment fraudsters like these are nothing new, but the use of cryptocurrencies as a bait is a new tactic as there are still many different scams involving digital currencies.
Detective inspector at the City of London Police Mark Forster explained:
Investment fraudsters are still targeting people throughout the country and they employ aggressive sales tactics which are often used to pressurise unsuspecting victims into parting with large sums of money. […] These people often base themselves in the City as they believe having an address in a prestigious financial district will help to legitimise their fraud.
Forster warned the public that businesses rarely cold call customers and persuade them to purchase investments.
“I urge anyone who is cold called and offered investment opportunities to simply put the phone down,” he said. “A legitimate company will never cold call you and put you in a position where you need to make an investment on the spot.”
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