Where there is money, there will always be scammers who try to steal it. And digital money is easier to steal and get away with since the criminal can remain anonymous. Before you buy, sell, exchange, send, or even talk about Bitcoin or other cryptocurrencies with a stranger, be aware of these commonly observed scams to help protect yourself and your investment.
The Top 4 Scams We See at Coinsource
Our live 7-day-a-week customer support department works with many users who have questions about suspicious deals or may have experienced some kind of a scam. These are the 4 most frequent that we see:
- Classified ads, Craigslist ads asking buyers to pay with Bitcoin.
NEVER send Bitcoin to someone you haven’t met face-to-face. You wouldn’t put cash in an envelope and mail it to a stranger, no matter what kind of a deal they offered. So don’t send Bitcoin either!
- Goods and services offered online, or via email or text, or some other electronic media. THIS INCLUDES tickets to events, concerts, theme parks, etc. Especially if it’s a “special deal” only for those who will pay in Bitcoin.
If it sounds too good to be true… DON’T send Bitcoin to someone you don’t know.
- Rent, landlord, lease, bed & breakfast or other types of lodging, vacation deals, etc.
Again, your landlord’s email might have been hacked… check in person to see what’s up. Don’t fall for demands for payment or threats about non-payment.
Plain and simple: the IRS or state tax authority do NOT accept Bitcoin and will NOT call, email, or otherwise solicit you for payment of taxes in Bitcoin.
Remember, it’s not like paying with a credit card or check that you can stop payment on. When you pay with Bitcoin, it’s exactly like handing cash to someone. You can’t get it back.
Other Common Scams to Avoid
This is a scam primarily targeting men, but is also being reported by women. It’s quite simply a blackmail attempt by a stranger to extort Bitcoin in exchange for keeping quiet about an affair you don’t want anyone to know about. The sender may claim to have hacked your computer and found all your contacts so they can send “proof” to them if you don’t give up some Bitcoin.
One example letter stated “I know about the secret you are keeping from your wife and everyone else. You can ignore this letter, or pay me a $8600 confidentiality fee in Bitcoin”. Whatever the threat, report this scammer and don’t send them anything!
Scammers set up fake exchanges online offering very competitive market prices in order to lure people into thinking they can cheaply buy some Bitcoin. Only use reputable exchanges when buying or selling Bitcoin, or avoid the problem completely by using cash and a Bitcoin ATM.
If it sounds too good to be true, it probably isn’t real. If you see a special offer for free Bitcoin or other cryptocurrencies, just say no! And report it to whichever social network or website you see it on. These scammers get you to send a small fee to register, or they just want your personal info, and they promise to send you Bitcoin.
We all know that celebrities help sell everything from cheap mortgages to better denture adhesive. Scammers are taking advantage of our vulnerability to celebrity influence and are using photos and email addresses that look authentic. Some take you to a website that also looks authentic. What they want you to do is invest with cryptocurrency or traditional currencies, and they promise great returns on your investment. Don’t fall for the impersonation scam, whether it’s a celebrity, or even someone in your network of contacts.
Keep malware off your computer, phone, tablet devices, and any electronic device connected to the internet. It is very easy to get infected with malware if you’re not protected by antivirus software. Some malware is able to change a bitcoin wallet address so that when you think you are sending bitcoin to a specific address, it gets sent to the hacker’s address instead. Doublecheck any bitcoin address before you hit “send”!
Meeting in Person
Bottom line: don’t exchange Bitcoin for money or vice versa with someone you don’t know. If they want to meet in person, you could be getting set up to be robbed or injured.
Never click on a link in an email that asks for password or login info. These emails are so sophisticated and look so authentic, that they convince users to click through to fraudulent sites that gather your account information to steal from you. If it’s a legitimate email from a reputable retailer or service, you should be able to go to their website (NOT using a link in the email they sent you) and get their authentic customer service phone number. That way you can verify whether the email is legitimate or not.
Like phishing emails, phishing websites look like the real deal and fool many users into logging in or downloading something that turns out to be malware. Links to phishing websites can even be found in ads or sponsored results.
Some malware showing up will partially or completely block access to your device unless you pay a ransom in Bitcoin. If this happens to you, take your device to a trusted computer professional to clean it and don’t send Bitcoin to anyone! Often times this type of malware gets installed on your device by pretending to actually be free anti-virus software. Or software that will help your computer run better.
For every legitimate alternative coin (altcoins), there are scammers inviting people to be among the first to invest in or participate in a private sale of a “new” type of cryptocurrency. Their websites may look legitimate and they may boast about a huge community of investors or supporters, but you’re much better off not taking a chance that your good money or authentic Bitcoins could be stolen.
Unfortunately, these aren’t the only scams out there that users need to be aware of. A good rule of thumb is to always research and authenticate any individual, company, service, or software before ever giving them information, money, or anything else of value.