Ireland's banking, insurance and investment watchdog has issued new warnings about the dangers of investing in cryptocurrencies.
A new report from the Financial Services and Pensions Ombudsman (FSPO) for 2021 shows that the agency handled more than 5,000 banking, insurance and investment-related complaints resulting in €7 million settlements last year.
Acting Ombudsman MaryRose McGovern revealed a notable increase in the number of complaints made to the FSPO in the area of investment and cryptocurrency fraud, where the financial and personal impact of these fraud incidents was very significant.
It includes a woman who lost €20,000 that she borrowed to invest in cryptocurrencies and later discovered was a scam.
"Consumers should be aware of the risks posed by investing in unregulated activities, such as cryptocurrency trading, which often carries a higher risk and level of volatility than regulated product offerings," McGovern said.
His comments follow a similar warning from the Central Bank last week, which said consumers should be aware of aggressive advertising and promotion of cryptocurrency investments.
The €7 million in settlements included €4.6 million in mediation settlements at 1,153, €941,328 in compensation to whistleblowers following formal investigations and €944,167 paid to whistleblowers to resolve complaints during the formal investigation process of the FSPO.
27% of the complaints (1,257) received were related to insurance products, with the most common complaints being related to claims handling or the denial of an insurance claim.
In addition to the 600 Covid-19 related complaints received in 2020, a further 275 new complaints were received in 2021 where the complainant entered Covid-19 as an element of their complaint.
Mortgage-related complaints represented 23% of all complaints received in 2021. This includes 250 new tracker mortgage complaints during 2021, 12 years after the first tracker mortgage complaints were received in 2009.
