BBB Warns Consumers to Exercise Caution with Cryptocurrencies such as bitcoin

press release from BBB

The use of e-currency is on the rise among consumers, and many major retailers have begun accepting this exciting new form of payment for online transactions. Unfortunately, with its growing popularity, savvy scammers are now using e-currency as a way to target victims.

E-currency – also known as cryptocurrency – is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds. It does so while operating independently of a central bank.

Fraudsters are attracted to e-currency because it offers largely untraceable, irreversible transactions which cannot be overseen by a bank or government authority. In many cases, the individuals behind these scams are able to create elaborate ploys to convince consumers they are legitimate and trustworthy.

Bitcoin continues to be the most popular and recognizable form of e-currency; however, others such as LiteCoin, Etherum (Ether), ZCash, Dash, Ripple, and Monero have recently emerged – all of which are advertised to be improved or modified versions of Bitcoin.

Here are the most common forms of e-currency/cryptocurrency scams that consumers need to watch out for:

1.)      High-Yield Investment Scams. These scams attract consumers with promises of high interest rates on investments. They operate like pyramid schemes, which generate returns for older investors through revenue paid by new investors, as opposed to legitimate business activity and investments. Consumers will see small daily returns in their accounts, but eventually the returns stop and the scammers run off with all the investment funds.

2.)    Bitcoin Wallet Scams. All users of Bitcoin require a “wallet” to store, send, and receive their currency. Sadly, scammers have discovered ways to create fake wallets and defraud consumers. These fake wallets are downloaded by consumers and operating within a few days. Once the deposit level reaches a certain limit, the funds are removed by the scammers and consumers are left empty-handed.

3.)    Bitcoin Phishing Scam. These scams usually involve consumers receiving emails to inform them they have won or been gifted bitcoins. In order to collect their e-currency, they must click on a link leading to a wallet, where their username and password is required. To the victim’s surprise, the provided link is to a fake wallet site and scammers have now gained access to the victim’s wallet and the Bitcoin held therein.

4.)    Bitcoin Donation Scams. These are instances where scammers have created fake donation pages, asking consumers to donate in Bitcoin. Even when donating, it is necessary to research the cause, the charity, and the person behind it thoroughly before arranging the transfer of any e-currency.

5.)    E-Currency Exchange Scams. E-Currency exchange scams are often linked to employment or advance fee loan scams. Consumers are sent funds via e-transfer, credit card, or cheque, and are asked to exchange the funds for Bitcoin. They are then instructed to deposit the funds in another Bitcoin account to pay for interest charges or office supplies (depending on the nature of the scam). Eventually, the initial payment is found to be fraudulent and the consumer is held accountable to pay for the initial funds that were transferred.
Industry Tips for the Use of E-Currency:

1.)      If you decide to entrust funds to any digital investment service, ensure you thoroughly research the company. Find out if they are properly incorporated, registered, and operated by reputable industry professionals. Look for information about their marketplace reputation on If any company guarantees you high returns, be cautious. There is never any certainty in the investment world.

2.)    Avoid using any wallet or exchange holder that is not reputable or professionally operated. Look online for reviews, complaints, and community feedback. Avoid companies offering exceptionally low fees.

3.)    Be suspicious if you receive a notice for a transfer of funds that you were not expecting. When in doubt, contact the sender to confirm that he or she has initiated your transfer.

4.)    Examine the links in the emails you receive. While scammers often use a legitimate website in the text of the email, holding your mouse over the link will reveal the actual URL.

BBB warns that, when dealing with e-currency, it is best to treat your funds as carefully as cash in the offline world. If you lose it, it is highly unlikely that you can ever get it back.

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