Luno accused of 'hijacking' users’ funds

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Naspers-owned crypto-currency exchange Luno has been accused by some of its customers of “locking” their accounts, leaving them without access to their funds when they need them.

Luno (formerly BitX) is a Bitcoin company headquartered in London, with operations in SA, Indonesia, Malaysia, Nigeria, Singapore, the UK and 35 other European countries.

The company was founded in 2013 and the exchange was set up by Timothy Stranex and CEO Marcus Swanepoel, a former investment banker.  

It recently said it has over 2.5 million customers (wallets) across 40 countries.

Going to and fro

A frustrated Luno account-holder contacted ITWeb, alleging that: “My experience with these people [Luno] is less than satisfactory. I invested R200 000 in May and June 2019. Shortly after this, my account was ‘locked’, apparently for security reasons.

“After much toing and froing and a lot of frustration, I insisted on a return of my funds. Again lots of getting jerked around and I eventually received R100 000 from my one account. It is now almost a month and despite many, many communications with them (all via e-mail or Web chat because there is no telephone contact) I am still no wiser as to why the account was locked and whether I will ever see my money returned.

“I am beginning to feel I have been scammed and I have reported the matter to the Hawks who also seem to think I have been duped. They [Luno] keep asking for proof of payment for the deposit which I have now sent on many occasions but nothing happens. All I get is a mail saying they are looking into it. My money has now been ‘hijacked’ for over a month.

“I have lost a lot of money during this debacle as Bitcoin went from R124 000 to R198 000 (when I should have been refunded). It is now dropping again so any payment now is at a lower value.”

Luno says this issue has since been resolved.

Other users took to consumer complaints Web site Hello Peter to vent their frustrations. Said one user: “Since May/June this year, I have been trying to make contact with Luno. I even have ticket numbers generated by their system but to date, no call nor e-mail.

“It’s been more than three weeks with my account blocked, I cannot be able to do any further. They asked me for proof of payments and I immediately sent them the documents. But their response has been extremely long.

“Later on, they decided to close my account. They took so long to reverse the money back to my bank account. Now they are holding my money and I am not able to continue with my business. There is no one to contact only support chat. I am extremely frustrated and I feel this is very unprofessional. If you want to disable an account for a security concern, the response takes ages.”

Another user complained: “My first foray into Bitcoin. A nightmare. They decided to ‘lock’ my accounts for security reasons. Despite many interactions with the support team, my account is still locked after 11 days.

“I cannot transact at all and despite all my chats and calls, my account remains closed. The reason given is they are ‘protecting me from being scammed’ as maybe I am naïve in dealing with Bitcoin. After incredible frustration I asked them to simply return my money. Three days later, the money is still showing in the account and my account is locked. The help and support team now will not assist as ‘it is being dealt with’. I would think that refusing to return my money is illegal and I will be reporting this to the authorities. An absolute disaster. Am I being scammed by Luno????”

Fraudsters are also targeting unsuspecting users using SMS. One of the SMSes that Luno confirmed to be a scam reads: “Dear Luno User, Update your Luno account on the 3 D Server to avoid termination. Tap -->****** to validate your wallet.”

Monitoring fraud

In response to the complaints, Marius Reitz, Luno’s general manager for Africa, says Luno closely monitors accounts for clues and patterns of fraudulent activity in locations where fraud is higher than the benchmark the company has set, or where it has noticed a rise in fraud attempts.

“It’s in our customers’ best interest that we have preventative measures in place to ensure we’re not dealing with impersonators.”

Reitz adds that Luno has a “self-lock” feature which it includes in all notification e-mails which the customer can turn on if they suspect their account has been compromised.

“We deal with all incidents on a case-by-case basis and automatically send out communications after sign-up about how to enable two-factor authentication. Our processes have been meticulously put in place to best protect our customers from external threats.

“If we have locked a customer’s account due to suspicious activity then they are able to contact Luno’s customer success team via the help centre and we will go through a series of security questions and procedures to unlock the account.”

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