Devon adviser helps client 'scammed' out of £220k by crypto

Philip Milton, of PJ Milton & Co in Barnstaple, Devon, said he had taken on a new client who had been 'duped' by glossy online advertising and invested heavily into cryptocurrency. 

He came to Milton, feeling "clearly vulnerable" to ask for help. 

Milton said: "A new client shared how he had been duped to become involved in ‘cryptocurrency’. But contrary to the many adverts noting what wonderful gains everyone was making, his forays cost him £220,000 – a sum he could certainly ill afford.

"It was funded ultimately by maxing-out credit cards, all aiming to retrieve what he had lost before."

Effectively, where we come across such cases we try to do whatever we can, at our cost.Philip Milton

He added: "He was unable to realise that had been happening and without having someone unrelated to talk about things, the outcome became inevitable.

"I was very sorry to hear about this and have started to work with them to repair the holes in their finances and to put things back on the straight and narrow."

However, Milton warned this was not the first case the company has encountered with significant sums involved. He added: "Another was a man who gambled all of the value of his mother’s house, which he had just inherited, as he didn’t know what to do with the money.

"He did not have much wherewithal behind him at all and it has all gone."

Regular communications

Such examples are why the Devon-based company, which has just renewed its Corporate Chartered Status with the Chartered Insurance Institute, has been attempting to educate clients and prospective clients through regular newsletters and communications. 

Milton added: "Effectively, where we come across such cases we try to do whatever we can, at our cost. This can be investigating whether it is a real scam or simply falling for the ‘duping’ by the crypto regime and capital lost ‘legitimately’ in some instances.

"Very often ‘they’ don’t know the difference and it is not just crypto – it is any and all scams. 

There are a lot of people who are 'in love' with crypto.Philip Milton

"We then look for regulated protection, if any at all and start delving into whatever other possible routes which could exist - as well as counselling of sorts to try to repair the psychological damage the victim will often have suffered as well."

He pointed to Facebook and social media adverts for 'investments' such as whisky, some of which are purporting to give high double-digit or even triple-digit returns.

Milton added: "Only on Thursday some wealthy clients of mine, who have just sold a second home, asked me ‘What do I think of whisky as an investment as I keep seeing adverts of the great returns on Facebook’... it is soul destroying sometimes. Even the regulatory system doesn’t seem to understand that.

But while the company does "indeed publicise scams and try so hard to warn our readers (clients and non-clients)", there is only so much an adviser can do. 

"There are a lot of people who are 'in love' with crypto and thus rationality has gone, as they believe in it without constraint. 

"Any challenge to their love is akin to making an accusation of stupidity, which could encourage them ‘the wrong way’ even more."

Regulatory action from the FCA

Over the past few years, the Financial Conduct Authority has been working with platforms such as Google and Facebook to tackle spurious or suspected scam advertising, as well as issue regular warnings to Britons about putting their money into unregulated 'investments'.

As reported by FTAdviser at the time, the Financial Conduct Authority amended or withdrew 4,151 financial promotions between July and September 2022 in a heavy crackdown.

This was the highest level since the City watchdog started publishing the data.

At the time, a spokesperson for the FCA said: “We are aware that scammers are targeting consumers searching for investments online, in particular through search engines such as Google and social media such as Facebook, Instagram or YouTube.

“This means consumers often need help to understand which products and services are not necessarily authorised or regulated by us.”

simoney.kyriakou@ft.com