Cyprus watchdog warns of scammers impersonating its representatives

abdelaziz Fathi

The Cyprus financial watchdog said on Friday there was evidence of fraudulent impersonation of its officials who are engaged with firms under CySEC’s supervision.

The regulator warned about persons who approach clients of suspended brands, or those under investigation, claiming that they can help them recover their capital.

The Cyprus Securities and Exchange Commission said investors should not be lulled into any correspondence ‎trying to usurp its identity to defraud them in an “advance fee scam,” in which victims are often asked to pay a fee upfront before they can receive promised compensation.

These scammers may contact clients of regulated entities, often via email which appear genuine. They carry the name, address, official stamp and logo of CySEC and fraudulently copy CySEC officials’ signature, it warns.

“For that reason, CySEC would like to remind the public that it never sends unsolicited correspondence to investors or members of the public, nor does it ever request any personal data, financial or otherwise. CySEC has no authority or jurisdiction to collect fees for any purpose from individual investors, nor does it have authority to appoint anyone to do so on its behalf,” the regulatory body said.

Scamming the scammed

While there are variations of these fraudulent tactics, CySEC advises investors to be cautious of any person that offers to help them return their money.

This activity is typical of the fraud mechanism known as a ‘recovery room.’  Although the CySEC could help investors who have lost money, the regulator doesn’t charge fees, guarantee their money back, or give special preference to anyone who files a formal complaint.

The scam artists buy and sell lists of clients of brokers under investigation so that they promise the recovery of money suspended for a fee in advance.‎

These recovery scams are defrauding the victims one more time, and according to the CySEC, investors should look for some red flags. For example, victims are contacted by individuals pretending to be CySEC officers or appointed representatives to perform investigations or other services.

These sorts of scams use a variety of lies to add credibility to their pitch, and once the victim shows interest, they send a series of official-looking documents to assure him that money is waiting in his account and can be recovered for a fee.

“Individuals claim to be CySEC officers, appointed representatives of CySEC (e.g. legal advisors), other Cypriot supervisory authorities (e.g. the Central Bank of Cyprus or the Financial Ombudsman) and/or other real or fake bodies, such as «the Insurance Indemnity Guard»,” the CySEC notes.

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