Don’t Get Bit(coin) by Crypto Scammers

Fighting Fraud
By Better Business Bureau^® Serving Greater Cleveland

Cryptocurrency is the latest craze in the investment world, and that — combined with many people’s confusion on the topic — makes it the perfect breeding ground for scammers to take advantage of unsuspecting victims. BBB’s latest study, Cryptocurrency Scams, details the history of the currency and its dangers to those unfamiliar with it.

Cryptocurrency is a digital payment system that does not rely on banks to verify transactions. It does not exist in physical form, like paper money, but rather as lines of computer code digitally signed each time the currency travels from one owner to another. Cryptocurrency allows person-to-person sharing anywhere in the world without any central authority, such as a bank, tracking transactions or reporting to any government agency. There are different types of cryptocurrency. Bitcoin is the cryptocurrency most are familiar with (and that most scammers request), but there is also Ethereum and thousands of other types of cryptocurrency on the market. 

Scams involving cryptocurrency can take different forms. The most common type of cryptocurrency-specific scam involves investing. Scammers will contact victims unsolicited and promise fantastic, unrealistic or downright false returns on their investment. Scammers also ask for bitcoin as a payment method for other types of scams. Most of these schemes are for online purchases, employment scams, tech support scams, or even fake requests to pay utility bills.

Scammers use the growing number of bitcoin ATMs to their advantage. With these ATMs, often found in places like gas stations or convenience stores, victims only need to insert $20 bills, scan the scammer’s QR code, and then their money can be sent anywhere in the world.

A senior citizen in Mansfield recently lost $5,500 to ransomware scammers posing as “Geek Squad” employees, using a bitcoin ATM at a gas station. The consumer granted remote access to her computer after she was notified she needed to make a payment to Geek Squad. The scammer used the remote access to “accidentally” withdraw $5,000 from the consumer’s bank account, which he said he would refund, and then advised the consumer that she needed to deposit $500 in a Bitcoin machine at a Marathon gas station in Ashland instead to make payment. 

Be incredibly careful when anyone asks you to pay with bitcoin or another form of cryptocurrency. BBB provides these tips for anyone considering using cryptocurrency:

• Cryptocurrency transactions cannot be reversed. It is like sending cash

• Safely secure digital wallets containing cryptocurrency, as if they are house keys

• When in doubt, contact companies directly using the information provided on official websites and not websites sent by scammers

• Make certain that the web address of any exchange or other site is the real one. Fake websites are widespread and may look very professional

• Be skeptical of a romantic interest or a friend urging you to invest in cryptocurrency online. Talk to friends on the phone or in person to be sure someone has not hacked their social media accounts.

• Claims of a guaranteed return on any investments, especially cryptocurrency, are always false

If individuals have spotted a scam (whether or not they’ve lost money), they can report it to BBB.org/ScamTracker. Additional Questions? Reach out to your BBB at 216-241-7678 or [email protected]. For more news and tips visit BBB.org.

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