Cryptocurrency Investment Schemes are the Riskiest Business

 Fighting Fraud
By Better Business Bureau Serving Greater Cleveland

Consumers duped by cryptocurrency (“crypto”) scams often face staggering losses. In 2021, the average reported loss was around $8,000, but some individuals reported losing their entire life savings to fake crypto investment schemes. Worse still, victims of these scams are at risk of further fraud when they turn to “cryptocurrency recovery services.” Unfortunately, many of these services are scams themselves.

Cryptocurrency recovery companies that request upfront fees to recover lost cryptocurrency are scams. Very few legitimate companies will offer to help with technology, data recovery or account-specific issues, but these companies cannot recover stolen funds themselves. Typically, only banks and financial institutions can reverse charges and recover funds in certain crypto-related scenarios.

Scammers may even pose as law enforcement or other government officials. Legitimate government resources will never ask for money or charge fees to help a consumer obtain a crypto refund. Government agencies cannot guarantee refunds either. In limited circumstances, some government agencies, like the Federal Bureau of Investigation (FBI), may be interested in attempting to recover funds through their Financial Fraud Kill Chain (FFKC) process which aids in recovering large international wire transfers stolen from US citizens.

Since cryptocurrency scams are now considered the riskiest scam type, BBB Cleveland is providing the following tips on handling losses and identifying crypto recovery scams.

Report Cryptocurrency Scams Immediately – Contact your bank to reverse unauthorized transactions and report the scam to local police, the FBI, and the Federal Trade Commission (FTC). Additionally, file a report with the Better Business Bureau (BBB) at bbb.org/scamtracker.

Research Any Individual That Contacts You Regarding Cryptocurrency Recovery – Verify any organization or individual’s legitimacy by searching for complaints and scam reports online. Confirm if a government agency is genuinely trying to contact you by checking their official websites and public phone listings.

Don’t Trust Communications Guaranteeing a Refund – Most money lost in cryptocurrency scams cannot be recovered. Any entity promising a guaranteed refund is likely a scammer.

Never Pay Upfront For a Refund – Legitimate government agencies will never ask for a retainer or fee to recover cryptocurrency. The FBI may get involved in recovering losses over $50,000, but they do not charge for this service. Learn more and file scam reports at the FBI’s website,ic3.gov.

Beware of Fake Recovery Checks – Scammers might issue fake checks that exceed the lost amount and ask victims to return the “overpayment.” These checks will bounce, causing further financial loss.

If you encounter a scam, whether or not you’ve lost money, report it to BBB’s Scam Tracker at bbb.org/scamtracker.

If individuals have spotted a scam (whether or not they’ve lost money), they can report those to BBB.org/ScamTracker. Consumers can file a complaint at BBB.org/Complaint. Have additional questions? Reach out to your BBB at 216.241.7678 or [email protected].  Have a scam to report? Report it to BBB.org/ScamTracker.