Cryptocurrency and other investment scams are now the most dangerous type of scam in the United States, with cryptocurrency scammers often scamming their victims out of thousands of dollars, the Better Business Bureau said.
Scammers have found creative ways to trick investors out of their money, the BBB said in its annual Biggest Scams of 2023 report, which is based on 67,000 scam reports.
The BBB reported that about 80% of Americans targeted in cryptocurrency and investment scams last year lost their money. The average dollar amount lost was $3,800, “but a lot of people lose a lot more than that” to cryptocurrency scams, said Anna Werner, national consumer investigative reporter for CBS News.
Hackers use social media, video game platforms, or text messages to contact people and brag about how financially successful they are due to investing in cryptocurrencies. Werner explained that after the targeted victim responds, the conversation quickly turns to a question.
“This is where scammers pressure you to buy, trade or store digital assets — such as cryptocurrencies — on fraudulent exchanges,” Werner said.
Cryptocurrency is an unregulated investment space, which federal regulators and consumer advocates have long said makes it ripe for fraud. The popularity of cryptocurrencies has exploded during the pandemic as some investors became curious about the craze and poured money into Bitcoin, Ethereum, Solana, and other tokens. Today, the industry has a market value of $2.65 trillion, according to Forbes.
While cryptocurrencies have proven to be profitable for many investors, they are not without risks. Companies that were considered legitimate at one time later collapsed, Like FTX, which was once one of the largest cryptocurrency exchanges in the world. FTX collapsed in 2022 amid an $8 billion shortfall in funds and allegations that former CEO Sam Bankman-Fried took client money to prop up a struggling hedge fund.
Cryptocurrency investors did too Reported loss of billions of dollars Due to hacks or fraud. A 70-year-old California woman filed a lawsuit this year against Chase Bank after… I lost $720,000 to a fraudster in a cryptocurrency scam.
To compile a list of the top financial risks in 2023, the BBB ranked employment scams as the second most dangerous. This is when the scammer contacts the victim and convinces the person that he or she has been hired by a company and needs to complete employee information.
In reality, the scammer is stealing someone's personal information. Victims lost an average of $1,995 in employment scams last year, the BBB said.
Online purchase scams were the third most serious, according to the BBB. Victims usually log in to a fake website to purchase an item but the scammer does not deliver the product. Victims lost an average of $71 to this type of scam last year, the BBB said.
