CT BBB Conducted Cryptocurrency Fraud Investigation

CROMWELL, CT — Reports of cryptocurrency scams to Better Business Bureau's Scam Tracker tripled between 2019 and 2021, as did the reported losses. Last year, BBB received 2,400 complaints with losses totaling nearly $8 million.

 

Many victims looking to invest in cryptocurrency report that after purchasing it, they could not withdraw their “earnings” and were told they must contribute more money to cover taxes, commissions, or other fees. Ultimately, they lost more than their initial investment. 

 

Cryptocurrency scams rose to the second riskiest scam of 2021 behind online purchase scams. Sixty-six-percent of people reported losing money when targeted by a cryptocurrency scam. Though other scams are more common, victims stand to lose seven times more to cryptocurrency scams. Last year, the average loss from a cryptocurrency scam reported to the BBB Scam Tracker was $1,200 versus $169 for all other scam types.

 

One Connecticut consumer lost $10,000 this year. Another reported investing $200 in a cryptocurrency website. He said he was told he could withdraw $7,034 if he paid an $850 verification fee.

 

"Do not allow yourself to get scammed by this website because I guarantee they'll take your money rather than you make more money than you think," he told Better Business Bureau serving Connecticut.

 

A third victim in Connecticut said she lost more than $300 when she called an imposter phone number she found online to cancel her Amazon Prime membership. She reported to BBB that the representative insisted she download the Bitcoin Wallet app and proceeded to transfer money out of her bank account after gaining access to her email to retrieve access codes. 

 

“…he asked me at the beginning of the call for my full name, email and billing address. He also got my driver’s license picture front and back as he said, ‘this was a part of Amazons refund process.’ He also made me take about 2 selfies and made a pin for his bit coin wallet. After all of this, the phone got disconnected and there was a pending withdrawal of $321.04 transferred from my savings to checking account that was withdrawn from my account. He also transferred more monies but did not get the chance to withdraw it,” she said in her Scam Tracker report.

Results of the Study

 

The emerging popularity of Bitcoin and other types of cryptocurrency has created a fertile environment for scams, according to a new in-depth investigative study by Better Business Bureau^® (BBB^®). The study, found here, examines the many facets of cryptocurrency and the variety of ways criminals are exploiting the cryptocurrency market.

 

Cryptocurrency is attractive to scammers because it is relatively unregulated, difficult to recoup once lost, and is not well understood by the general public. The cryptocurrency market offers new opportunities for tried-and-true investment frauds, particularly given the lack of protections that government regulation has made available to more traditional investors. 

 

Tips to avoid cryptocurrency scams:

 

· Guard your wallet. If you buy cryptocurrency, the security of the wallet is of prime importance. If you lose the key, then your funds are gone permanently. 

· Look carefully at email addresses and website addresses. Phishing scams often try to trick people into logging in and then capture the log in credentials. Those then can be used to steal money. Looking for an exchange with an internet search engine may lead to fake sites which advertise and impersonate real companies. Be especially careful when viewing these on a phone. 

· Do not pay for products with cryptocurrency. Be careful if someone asks you to pay with Bitcoin or another cryptocurrency. No one with the government will ever ask for this form of payment. 

· Watch out for fake reviews. Scammers often create fake reviews for their own companies.

· Be wary of celebrity endorsements. It can be tempting to rely on a prominent figure who has invested in cryptocurrency. But those endorsements are often not authorized and even if they are, the celebrity may be paid for the effort and may not know more about it than you do. 

· Be careful about claims made on social media. This is the most common place for people to encounter investment scams. 

· Be wary of “friends” who reach out to you on social media and tell you how they made money with cryptocurrency. Accounts are frequently compromised. Call your friend by phone to see if it is really them. 

· Do not believe promises of guaranteed returns. No one can guarantee how an investment will perform. 

 

Where to report a scam or register a complaint:

 

·        Better Business Bureau — file a complaint with BBB.org if you lost money or report a scam online at BBB.org/scamtracker. 

·        Federal Trade Commission (FTC) — file a complaint online at reportfraud.ftc.gov or call 877-FTC-Help. 

·        Internet Crime Complaint Center (IC3) — file a complaint online at ic3.gov/complaint 

·        U.S. Securities and Exchange Commission — SEC.gov/tcr

 

Please reach out to Better Business Bureau serving Connecticut if you would like to set up an interview with a Connecticut victim. BBB can also supply you with legally reviewed text messages between victims and scammers. For an additional visual or stand-up click on this website to find a Bitcoin ATM near you.

 

About BBB

BBB is a nonprofit, business-supported organization that sets and upholds high standards for fair and honest business behavior. BBB services to consumers are free. BBB provides Business Profiles on more than 5.3 million companies, 11,000 charity reviews, dispute resolution services, and educational information on topics affecting marketplace trust. Visit BBB.org for more information.