According to the banking ombudsman, cryptocurrencies are making life increasingly difficult for customers and banks.
In 2022, the Ombudsman for Banking Services and Investments (OBSI) answered over 10,000 inquiries from the public. A 40% increase over a year, while 2021 was still record-breaking.
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The majority of inquiries are related to banking (up 56%), but investment-related inquiries are up 8% year-on-year, mostly driven by cryptocurrencies.
“Fraud has risen sharply during the pandemic. Consumers seem less aware of the risks they run when dealing with people they don’t know. And as our world becomes more sophisticated and electronic, more and more people are transacting online, so there are more opportunities for scammers, too,” said Mark Wright, Director of Communications at OBSI.
Be fooled by cryptos
Here’s an example of the “new” cryptocurrency-related complaints: “He’s an investor who’s not sure who he’s dealing with. He is told, “If you want to invest with us, we don’t do it in cash, we only do it in cryptocurrency.” So the investor goes to his bank, withdraws his money and buys cryptocurrencies, and then transfers them to a fake account ‘ explains Mark Wright.
The cryptocurrency company from which our investor buys this currency works legally, the bank with which he does business to withdraw his money. But when the investor gives their wealth to others to invest – often in a fake account owned by a fake company – the money is lost there. And it will be very difficult to track.
“When a bank sees a situation like this, where someone is withdrawing a lot of money for an investment, they raise a red flag. Unfortunately, most investors will say, “I know what I’m doing.” They don’t want to be told what to do with their money. But once the money is out of the bank, there’s nothing the bank can do for them,” says Mark Wright.
Regardless, customers typically contact their bank and say, “Why didn’t you arrest me? says Mark Wright. It’s a shame, but that’s the way it is, he adds. Banks tend to have systems in place to alert their customers in such situations, but customers often don’t listen, he says.
A new problem
Cryptocurrency complaints are entering “new territory” for the agency, according to Mark Wright. Since the new regulations last year, several cryptocurrency sellers have decided to become members of OBSI. “We have therefore gone from zero complaints related to cryptocurrencies last year to 52 this year,” he specifies.