With today’s economic uncertainty and increasing media coverage of cryptocurrency, some consumers are falling victim to investment scams and other cons involving one or more types of digital money.
Cryptocurrency, often called
crypto, is not government-backed; it can be highly volatile and risky.
Common types of crypto include Bitcoin, Ethereum, Binance and Ripple. Scammers like to request crypto because it lacks many of the same protections that other payment forms provide and is hard to trace once the money is sent.
If you’ve fallen victim to a cryptocurrency-related scam, the federal Commodity Futures Trading Commission (CFTC) suggests taking these six steps:
- Stop sending crypto. If you’ve already sent cryptocurrency to a scammer, the scam might not end there. For example, the scammer – posting as a government official, a recovery company or an attorney – may suggest that, for a fee, he/she will get your lost funds back. This is never true; it’s part of a recovery scam to simply steal additional money from victims.
- Gather documentation. Be sure to write down all the scam details that you recall, including conversations you had and the date/time of these calls, chats or messages. Be sure to save any website addresses, screenshots, phone numbers, email messages and email addresses as well as any receipts or statements of any payment types you used to pay the scammer (credit cards, crypto, money transfers, prepaid money cards, etc.).
- Protect your identity and financial accounts. If the scammers have your payment information, take action to block their access to your accounts. If you gave out your personal information, such as a Social Security number, consider putting a fraud alert or security freeze on your credit reports by contacting the three major credit reporting agencies (Equifax, Experian and TransUnion). Fraud alerts and credit report freezes are free and do not affect your credit score.
- Report the scam to relevant authorities. These authorities may include state agencies (such as the Ohio Attorney General’s Office and the Ohio Department of Commerce’s Division of Securities), federal agencies (such as the CFTC and the U.S. Department of Justice) and local authorities (such as a local police department or sheriff’s office).
- Begin seeking financial recovery. Review your homeowner’s insurance policy for fraud loss and/or identity-theft protection. Speak with a tax professional to find out about any opportunities to claim financial losses if you itemize your deductions. Talk with a reputable financial adviser and/or nonprofit credit-counseling organization about how to help repair any debt and deal with financial losses.
- Reflect on what led to the scam. The CFTC says: “Routine activities can lead people to becoming targets, and returning to those activities could start the process all over again. These routine activities could include being active in investor social-media groups or chat rooms, commenting on videos, signing up for trading courses, special offers, free giveaways, or investor newsletters.”
It’s important to stay vigilant and to recognize that once a scammer has stolen funds, your personal information may be sold to other scammers on the dark web. Be sure to keep your guard up and especially watch out for recovery fraudsters seeking to gain access to more of your money under the guise of helping to recover lost funds.
Consumers who suspect a scam or an unfair business practice should contact the Ohio Attorney General’s Office at www.OhioProtects.org or 800-282-0515.