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Consumer Crackdown: Cryptocurrency scams skyrocket in 2021

Fraud losses hit 10-year high
Published: Feb. 23, 2022 at 1:20 PM CST
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InvestigateTV - When Samuel Woody downloaded an app on his phone for business, he never thought he’d be a victim of a scam.

“All I was trying to do was just do a good thing by helping my church,” said Samuel Woody.

Just one day after downloading the app, Woody said he got a call from a third party claiming his account had been hacked. Caught off guard by the call, Woody said he quickly gave the unknown man his personal information.

What he didn’t realize was that he was turning critical financial information over to fraudsters.

“I panicked, naïve to what was going on,” Woody said.

He said the man then convinced him to withdraw $3,800 from two credit union accounts and convert that money into cryptocurrency.

I got a receipt back and the whole time the manager was telling me I was going to get my money back and I never did,” Woody said.

He eventually learned he wasn’t speaking with a manager at all, he had been scammed. Woody said he then filed complaints with law enforcement, the Better Business Bureau, and federal agencies to try to get his money back. He said while he managed to recover a portion of the funds, it wasn’t nearly enough.

“I was really upset, you know, these guys need to be caught because they can do other people like that,” said Woody.

Woody is not alone. According to the National Consumers League, 2021 was a banner year for scammers. Losses to fraud hit a 10-year high and cryptocurrency-related deals were one of the fastest-growing scams.

“Cryptocurrency is in many ways the holy grail of payment methods if you’re a scammer,” said John Breyault.

Breyault heads up Fraud.org at the National Consumers League. He said scammers prefer cryptocurrency because it’s immediate and not reversible.

Breyault said the NCL wants to strengthen regulations on financial apps and cryptocurrency exchanges to stop fraud.

“I think we’re really reaching a tipping point where regulators here in Washington are starting to wake up to the fact that these new technologies sound great, but fraudsters know how to use them too and it’s costing American consumers billions of dollars,” Breyault said. “Something needs to be done.”

Not only are scammers using cryptocurrency as payment in traditional phishing scams, some also pose as brokers to persuade you to invest.

Experts we spoke with said to protect your money, search online for the company and cryptocurrency name to make sure it’s legit before investing and be careful of guarantees and big promises.

If you’re a victim of a cryptocurrency investment scam, report it to the Federal Trade Commission, the Attorney General’s office, and the Better Business Bureau. Your case could result in legal action. To find a complete list of the top ten scams reported to the National Consumer’s League in 2021, go to Fraud.org.