News
Scammers ask for cryptocurrency payments
Legitimate businesses and government agencies never ask for cryptocurrency payments (unless you are purchasing another cryptocurrency).
Regina Newman | Guest Columnist
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- Regina Morrison Newman is a Shelby County Trustee. She writes the regular column Wallet Warnings.
If you follow the news, you will notice that cryptocurrency (i.e. Bitcoin and others) is everywhere, with the ups and downs of its trading and the fact that more and more people are getting scammed.
One of our staff members in the Trustee’s office just received an email that looked like it was from Venmo and looked like an offer to buy Bitcoin monthly at a fixed price. The email was from a scammer who wanted access to his Venmo.
Is there a legitimate reason for someone to send you to a Bitcoin ATM? The short answer is no. Will anyone from the government ask you to pay fees or fines in cryptocurrency? Never.
Over the past year, our partners at Office for the best commercial activities have received at least 187 reports of scams involving cryptocurrency payment requests, resulting in a total loss of $179,000.
Additionally, they have received numerous calls from people concerned about possible cryptocurrency scams.
Three Things to Watch Out For in Cryptocurrency Scams
Scammers are increasingly demanding cryptocurrency payments. Here’s why:
- Lack of legal protections:Unlike credit cards, cryptocurrency payments do not offer legal guarantees.
- Irreversible payments: Once you send money via Bitcoin or another cryptocurrency, it is nearly impossible to get it back.
- Public confusion:Many people still don’t fully understand how cryptocurrencies work, which makes them vulnerable to scams.
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The Most Common Cryptocurrency Scams
- Government look-alike: To declare that you have to pay taxes or fines.
- Online Dating Scams:A new online love interest asks for money to solve an “emergency” that you can solve by sending cryptocurrency.
- Job Scams: Request for payment of work-related expenses.
- Investment Scams: It promises guaranteed returns with little or no risk.
- Blackmail scams: Threaten to disclose compromising information if you do not pay in cryptocurrency.
Five Tips to Protect Yourself from Cryptocurrency Schemes
- Only scammers ask for cryptocurrencies: Legitimate businesses and government agencies never ask for cryptocurrency payments (unless you are purchasing another cryptocurrency).
- Avoid work-related errands: Never pay any commission to get a job.
- Be careful with online relationships:If someone you meet online asks you for money, it’s likely a scam.
- No guarantees in investments: Be skeptical of anyone who promises profits or big returns, especially with cryptocurrencies. It is a very volatile investment vehicle.
- Do not transfer money on request: Your money is safe where it is. Don’t move it based on an urgent call or request.
- Report the scam to the BBB Scamtracker to warn others.
Some good news for consumers
The Consumer Financial Protection Bureau (CFPB) has filed a proposed an order issued in June that would have required Freedom Mortgage Corporation to pay a $3.95 million penalty for submitting erroneous mortgage loan data to federal regulators.
In October 2023, the CFPB sued the non-bank mortgage company for violating both the Home Mortgage Disclosure Act (HMDA) and a CFPB Order 2019In addition to the civil monetary penalty, if issued by the court, the judgment and order entered today will require Freedom Mortgage to regularly verify, test and correct the company’s HMDA data.
“Freedom Mortgage is a repeat offender that has ignored requirements to submit accurate data that helps federal regulators maintain a fair home lending market,” said CFPB Director Rohit Chopra. “The CFPB is making sure Freedom Mortgage pays for its actions and is also establishing protections to prevent future violations.”
Freedom Mortgage Corporation is a private non-bank mortgage originator and servicer based in Boca Raton, Florida. In 2020, Freedom reported HMDA data on over 700,000 mortgage loan applications and originated nearly 400,000 HMDA reportable loans valued at nearly $100 billion.
Our goal with Wallet Warnings remains the same: to help you protect your money. If you have questions or need more information about any of the topics covered here, please call (901) 222-0206. We are happy to help you avoid scams, fraud, and predatory lenders. You work hard for your money, and we want to make sure scammers don’t get it.
Regina Morrison Newman is a Shelby County Trustee. She writes regularly Portfolio Alerts Feature.