We were walking along the side of the Danube near the Parliament. A young "Italian" man approached us asking if we knew where he could change money. As we tried to help home, an older man approached saying he was the Police looking for potential drug problems and money laundering. He looked official and showed us a "police" authority. He asked the young man to show what he had in money and then us. Unfortunately I showed him my UK notes, he took them and then appeared to put them back. It was only some time later I found he had kept the notes.
I then read of this as a scam and how to deal with it. So beware anyone who says he is Police, not in uniform. Ask to be taken to a police station but never show any money.
We wrote this off and still enjoyed our three days in Budapest.