(Note: June is Elder Abuse Awareness Month and all monthlong we will be posting relevant content to help raise awareness.)
First, let’s talk about what cryptocurrency is. Cryptocurrencies are digital currencies that don’t require verification by financial institutions and can be used to buy goods or services or traded for a profit. There are different types of cryptocurrencies, such as Bitcoin and Ether. Cryptocurrencies can be bought online using your phone or computer or at a special ATM for cryptocurrency. Buying cryptocurrency can be done through apps, exchanges, or websites.
Cryptocurrency is stored in a digital wallet. It can be difficult or impossible to recover your funds if something happens to your wallet. For example, if you send your cryptocurrency to the wrong person, lose your password, or your digital wallet is stolen or compromised in some way, your money will likely be gone.
Cryptocurrencies lack the legal protections that credit cards and debit cards have. Unlike the U.S dollars you have in an FDIC insured bank account, cryptocurrency accounts are not backed by the government. This means you can’t dispute a purchase of cryptocurrency the way you can dispute a credit card purchase. When it comes to cryptocurrencies, there may not be a process for getting your money back. Cryptocurrency payments sent to scammers are often irreversible.
Signs of Cryptocurrency Scams
Cryptocurrency scams are alive and well, including in Contra Costa County. Learn the following signs of a cryptocurrency scam so you can spot these scams and protect yourself.
- Legitimate businesses or the government will not ask you to pay in cryptocurrency, including to buy something or to protect your money.
- If someone you meet on a dating app or website asks you to buy cryptocurrency, it’s probably a scam. Be especially cautious if you haven’t met the individual making this request in person.
- Don’t trust people who promise or guarantee big profits or big returns. If something sounds too good to be true, it probably is!
- The cryptocurrency trading platform lacks a customer service line or legitimate physical address.
- Many raving reviews or testimonials can indicate a scam. Be skeptical of rave consumer reviews on a cryptocurrency website, those reviews may be fake.
- A cryptocurrency website has many generic awards like “Customer Satisfaction” but it’s unclear who gave the award or you may never have heard of the award.
- Poor spelling, bad grammar, or broken links can indicate a scam.
- The website promises that the more you invest, the more money you’ll get in return. These types of investment plans are too good to be true and are designed to trick you into investing more money.
- If a cryptocurrency platform won’t accept transfers from your bank, it’s likely a scam. Scammers don’t connect their trading platforms to traditional and legitimate financial institutions because the scammers can get caught.
Steps to Protect Yourself
- Don’t send cryptocurrency to someone who contacts you unexpectedly and unsolicited, demanding you pay cryptocurrency
- Never pay a fee to get a job
- Never buy cryptocurrency as part of a job
- Don’t click on links from text messages, social media messages, or emails from people or companies you don’t know
- Don’t answer phone calls from numbers you don’t recognize
What to do if you are Scammed
Report the scam to the following:
- Adult Protective Services: landlines call (877) 839-4347; cell phones call (925) 602-41791
- FTC at ReportFraud.ftc.gov
- Commodity Futures Trading Commission (CFTC) at CFTC.gov/complaint
- U.S. Securities and Exchange Commission (SEC) at sec.gov/tcr
- Internet Crime Complaint Center (IC3) at https://complaint.ic3.gov
- The California Department of Financial Protection and Innovation at https://dfpi.ca.gov/submit-a-complaint/.
- The cryptocurrency exchange company you used to send the money
If you need help reporting the scam, call Contra Costa Senior Legal Services at (925) 609-7900 and we can help you.