Cryptocurrency scams on the rise, and officials warn it’s one of the most risky
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The following is a news release from the Better Business Bureau.
IDAHO FALLS – Scams related to cryptocurrency jumped from the seventh riskiest scam in 2020 to the second riskiest in 2021, according to the 2021 BBB Scam Tracker Risk Report, released earlier this month. Although cryptocurrency scams made up only 1.9% of the scams reported to BBB Scam Tracker in 2021, the average reported median dollar loss reported for these scams was $1,200 — much higher than the overall median dollar loss of $169 for all scam types. The annual report analyzes scams reported to the Better Business Bureau.
A BBB report on cryptocurrency scams was released on Thursday. It focuses on digital currencies, the tactics scammers use to take advantage of people, and what consumers can do to protect themselves.
Online purchase scams maintained the top spot as the riskiest; this scam type made up 37.4% of all scams reported to BBB Scam Tracker in 2021, with 74.9% reporting a monetary loss. Employment scams dropped in 2021, from second riskiest to third. The susceptibility and median dollar loss of this scam type dropped slightly, while the number of reported scams increased from 7.1% in 2020 to 7.8% in 2021.
“Scammers shift their tactics constantly and appear to have expanded their use of cryptocurrency to perpetrate fraud,” said Melissa Lanning Trumpower, executive director of the BBB Institute for Marketplace Trust, which produced the 2021 BBB Scam Tracker Risk Report. “Cryptocurrency scams were riskier in 2021 with 66% of those targeted by this scam type losing money and a reported median dollar loss of $1,200. Scammers are using social media and other means to promise investment opportunities with great returns and low risks, which is a huge red flag. We received many reports of people being targeted on a variety of social media platforms after their friends’ accounts were hacked.”
While susceptibility (the percentage of people who lose money when targeted by a scam) decreased in 2021, the median dollar loss rose 47.0%. Credit cards remained the highest reported payment method with a monetary loss, followed by online payment systems. Payment made via cryptocurrency that resulted in a monetary loss more than doubled from 2020. The payment methods with the highest median dollar loss were wire transfer ($1,450), cryptocurrency ($1,200), check ($900), and prepaid card ($700).
Regarding age, online purchase scams were the riskiest for all age groups in 2021. Cryptocurrency scams were the second riskiest for ages 25–64. Employment scams were the second riskiest and third riskiest across several age brackets.
Interestingly, investment scams were the third riskiest for ages 18–24 for the first time since BBB began publishing the risk report. The rise of cryptocurrency scams as the second riskiest overall in 2021 may play a role in the rise of investment scams for this age group.
More than 44% reported losing confidence or peace of mind because of the emotional impact of being targeted by a scam and about 35% reported losing personal information. About the same percentage of people (55.5%) reported losing time as reported losing money after being targeted by a scam.
“Time is money, and our survey results reflected this,” Trumpower explained. “We can’t ignore the fact that there are many other non-financial impacts of being targeted by a scam.”
For more highlights from the 2021 BBB Scam Tracker Risk Report, click here. Go to BBB.org/ScamTracker to report a scam and learn more about other risky scams on BBB.org/ScamTips.