New forms of payment may open the door to new forms of fraud. Scams committed through Bitcoin ATMs (BTM) are only increasing, according to data from the Federal Trade Commission (FTC)). November will mark two years since the third largest cryptocurrency brokerage platform, FTX, quickly collapsed due to a large-scale fraud that cost its investors millions, but that is not the type of scheme the FTC is warning about. This is a smaller-scale scam that harms people like you, your neighbors, and especially the elderly. A scheme that has already defrauded $66 million in the first six months of the year, just counting the reported cases.
Last year, the losses recorded in reported cases amounted to 114 million, 10 times more than in 2020. Authorities believe that these amounts are only a visible part of the reality of these scams because most of those that have been perpetrated are not reported. The FTC describes as “enormous” the growth of these frauds perpetrated through BTMs that in recent years have been installed in 24-hour convenience stores, gas stations and other popular areas. These are machines used to buy or send cryptocurrencies for which scammers have found a darker use.
The average reported loss per incident is $10,000, an amount that destroys family budgets for a long time. According to authorities, people over 60 are three times more likely to report being victims of this scam than young people.
How does it work?
There is no one script for this scam, which forces you to be doubly alert, but in most cases the victim receives a call or text message about suspicious activity on their accounts or unauthorized spending. In other cases, they receive a security alert on their computer in the name of Apple or Microsoft. This is something that puts many users on guard who believe in the veracity of these communications, and they are completed with a phone call in which someone plays the role of a representative of a government office (even the FTC). These calls finish telling the story that all the money the victim has is at risk or that their accounts are being used by criminals in money laundering, drug trafficking and other crimes.
The second step is the scammer’s offer to fix this situation, asking the victim to deposit money into a BTM for safekeeping. According to the FTC, these BTCs are called “safety deposit boxes.” “They ask the victim to go to their bank, withdraw the money, go to a nearby BTM or perhaps a specific one to deposit that amount. The victim will receive a QR code via text message to scan on the machine and once that happens the deposited money will go directly into the scammer’s pocket,” describes the FTC.
Distinguishing legitimate calls and text messages from scams is becoming increasingly difficult for even the most trained in distinguishing situations that may result in fraud. And staying alert is a job that is becoming more complicated and requires more verification.
For starters, the FTC recommends that you never open a link to a web page that has been sent to you, and don’t respond to unexpected calls or texts that appear on your cell phone. If you think a message, for example, about non-payment of your last electric bill may be true, call the utility company directly, but with the company’s phone number that you have, not the one provided in the text. Never use the phone number or website attached to the message and ask about the incident.
Please note that government agencies will never call you by phone unless they have first contacted you by letter. Calls claiming to be from the police, IRS, FTC, SEC or any other agency, without any written legal communication or visit, are fraudulent.
“We have been calling for several weeks but we have only just managed to speak to you now, but please know that tomorrow or this afternoon we will cut off your electricity for non-payment.” This line or variations on it, which requires you to act quickly, should put anyone who hears it on high alert. Scammers rush their actions to avoid verifying the allegations they make or speaking to someone who will dismantle the plot or have suspicions about it.
There is no payment emergency that can be solved by paying at a Bitcoin ATM or using a prepaid or gift card. No business, no government agency will ever ask you for anything like that. If you get to the point on a call where they tell you that, hang up the phone, stay calm and celebrate that your money is safe at that moment. If you are a victim of fraud, report it to the police and the FTC at ReportFraud.ftc.gov.
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