Cryptocurrency scams on the rise during pandemic
VANCOUVER -- The Better Business Bureau is issuing a warning to Canadians after a rise in cryptocurrency scams. In the first six months of this year, nearly a million Canadians have filed related complaints, and many have lost money.
“We’re seeing victims losing $2,500, $8,400, $6,000, $3,000 - these are not small quantities,” said Karla Laird with the BBB of Mainland British Columbia.
There have been many victims in the provice and right across the country, and the scams can take many shapes.
Cryptocurrency trading scams
We reached out to 90-year-old pensioner Richard Wear of Windsor, Ont. who got caught up in a cryptocurrency investment scam.
“I thought, well, this might be a way to make some quick cash,” he told McLaughlin On Your Side.
Wear couldn’t have been more wrong. He got hooked by the flashy ads, seemingly real celebrity and political endorsements, fake reviews and promises of high returns.
Once he signed up, he deposited money into the so-called "trading platform," but when he wanted to cash out, he says, he couldn’t get his money out.
“I got in there to about $1,250,” said Wear.
And Laird says anyone could be at risk.
“Many people are still not quite aware of how it works, what’s required, the dangers, the risks, the advantages, the disadvantages,” she said.
Cryptocurrency job scams
You can also get hooked into cryptocurrency fraud with false promises of job opportunities.
Last year McLaughlin on Your Side investigated two websites that were seemingly offering jobs. Both had fake Vancouver addresses listed on their websites. Once victims had applied to the jobs, they were convinced to make hotel reservations for a youth group supposedly traveling to Canada on an exchange program.
They received thousands of dollars in e-transfers and were told to put the money into bitcoin machines to make the hotel payments. Then - the e-transfers turned out to be fraudulent, and the victims were on the hook for all that money.
"I feel like I should have listened to my instincts at first," said Osibwe Erua, who lost $2,000 before CTV News Toronto reporter Pat Foran intervened and confronted the culprits on the phone.
Laird believes Erua and others who got involved were unwilling partners in fraudulent activity, used to launder money.
Cryptocurrency scam calls
And then there are the scam calls that scare consumers into depositing money into cryptocurrency to help clear their name.
Leona Han of Vancouver got such a call from culprits who had somehow gained access to her social insurance number, pretending to be with law enforcement. The fraudster claimed her name and SIN were being used to set up accounts to launder money. Han was convinced to prove otherwise by "testing" her bank accounts - withdrawing the money and depositing it into bitcoin with a promise to have it returned.
“'You’ll be arrested,' a lot of threats, I got really panicky,” Han said. She lost more than $8,000.
Pandemic sees increase in cryptocurrency scams
The BBB has received 914,000 complaints in the first six months of this year about negative experiences and encounters with fraudulent companies involving cryptocurrency schemes. And the scams ranked fourth on the BBB’s national list of top 10 riskiest scams across Canada last year, with victims losing an average of $3,617.
“These schemes are very sophisticated,” Laird explained.
Cryptocurrency is very complicated for most people to understand, but if you find yourself in a situation where you're not sure, there are a few things you can look out for.
First, always ask yourself, is this too good to be true? Promises of easy money can be a red flag.
Second, be wary of giving out account information or any personal details to a person you don't know or haven't thoroughly researched.
And third, beware of cryptocurrency investment and trading opportunities that promise high rates of return. The Canadian Securities Administrators warns of little regulatory oversight and a lot of risk. Cryptocurrency is not backed by banks or government and is not insured. You don’t have legal protections when you pay with it if something goes wrong, like you would with a credit card.