When scammers look to take your money, they want to be paid in a way that the victim cannot recover their funds. Gift cards have received a lot of publicity by crime prevention and consumer protection agencies because once you have given over the card or the card number to a scammer, it is almost impossible to get your money back.
Recently I reported an observation by the AARP Fraud
Watch Network that scammers are using cryptocurrency more to take money from
their victims. Cryptocurrency is another form of payment that does not have
many protections for the person making payments.
The Federal Trade Commission (FTC) has recently issued
a report that shows cryptocurrency is becoming the payment method of choice for
scammers. The Better Business Bureau (BBB) has also detected this trend.
According to the FTC, consumers reported losing over
$1 billion to fraud that involved cryptocurrencies. That is one in every four dollars
lost to fraud are paid in cryptocurrency.
Scammers have numerous ways to use cryptocurrency in
their scams. The FTC notes that the number one scheme is through investment scams
involving the currency. A total loss of $575 million has been lost to
cryptocurrency investment fraud from January 2021 through March 2022. Scammers
claim big returns by “investing” in the new currency. But the “investors” only
lose everything that they have paid to the scammer.
Romance scams are the next favorite scam. Scammers
entice their “love interest” to invest in cryptocurrency. Cryptocurrency
romance scam victims lost $185 million.
Next is some sort of impersonation scam with the
scammer claiming to be from a well-known business or government entity. The
scammer claims that the victim’s money is at risk due to fraud or a government
investigation with the only way to protect their money is to convert it to
cryptocurrency. Consumers lost $133 million in crypto losses.
Scammers contact their victims through an ad, post, or
message on social media. In the reports that the FTC has collected, those who
specified the platform where the scam began, 32% said they saw it on Instagram,
26% on Facebook, 9% on WhatsApp, and 7% on Telegram.
The demographics of who has lost money is interesting.
According to the FTC, people between 20 to 49 “…were more than three times
as likely as older age groups to have reported losing cryptocurrency to a
scammer.” People in their 30’s were hit hardest, with 35% reporting a median
loss of $3,200. People in their 70’s, while only 10% reported a loss, lost the
most with a median loss of $11,708.
The FTC concludes the following about cryptocurrency
scams:
·
Only scammers will guarantee profits or
big returns.
·
No one legitimate will insist that you buy
or pay in cryptocurrency.
·
If an online love interests asks you to
send them money in cryptocurrency or claims you can make a killing investing in
crypto, pull the plug, find someone else.
South Snohomish County Crime Watch:
https://ssnoccrimewatch.blogspot.com/2022/05/scam-update-scammers-continue-to-adapt.html
Federal Trade Commission:
https://consumer.ftc.gov/articles/what-know-about-cryptocurrency-scams
Better Business Bureau:
https://bbbfoundation.images.worldnow.com/library/259c7333-0fb3-4bc0-a059-4b116594c473.pdf
AARP:
https://www.aarp.org/money/scams-fraud/info-2019/cryptocurrency.html
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