- Regina Morrison Newman is Shelby County trustee. She writes the regular Wallet Warnings feature.
If you watch the news, cryptocurrency (aka Bitcoin and the numerous others) is all over it with the highs and lows of trading it as well as more people being scammed.
One of our staff members in the Trustee’s Office just received an email supposedly from Venmo that looked like an offer to purchase Bitcoin monthly for a set price. The email was from a scammer that wanted access to her Venmo.
Is there a legitimate reason for someone to send you to a Bitcoin ATM? The short answer is no. Will someone from the government ask you to pay fees or fines in cryptocurrency? Never.
In the past year, our partners at the Better Business Bureau have received at least 187 scam reports involving requests for cryptocurrency payments, resulting in a total loss of $179,000.
Additionally, they have received numerous calls from individuals worried about potential cryptocurrency scams.
Three things to look out for in cryptocurrency scams
Scammers increasingly demand payments in cryptocurrency. Here’s why:
- Lack of Legal Protections: Unlike credit cards, cryptocurrency payments don’t offer legal safeguards.
- Irreversible Payments: Once you send money via Bitcoin or other cryptocurrency, it’s almost impossible to get it back.
- Public Confusion: Many people still don’t fully understand how cryptocurrency works, making them susceptible to scams.
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Most common cryptocurrency scams
- Government Impersonators: Claiming you owe taxes or fines.
- Online Dating Scams: A new online love interest asks for money to help with an “emergency” that you can resolve by sending cryptocurrency.
- Job Scams: Requesting payment for job-related expenses.
- Investment Scams: Promising guaranteed returns with little to no risk.
- Blackmail Scams: Threatening to release compromising information unless you pay in cryptocurrency.
Five tips to protect yourself against cryptocurrency schemes
- Only Scammers Demand Cryptocurrency: Legitimate businesses and government agencies never ask for cryptocurrency payments (unless you are buying other cryptocurrency).
- Avoid Job-Related Fees: Don’t ever pay any fees to secure a job.
- Be Cautious with Online Romances: If someone you meet online asks for money, it’s likely a scam.
- No Guarantees in Investments: Be skeptical of anyone guaranteeing profits or big returns, especially with cryptocurrencies. It is a very volatile investment vehicle.
- Don’t Transfer Money on Demand: Your money is safe where it is. Don’t move it based on a call or urgent demand.
- Report the Scam to BBB’s Scamtracker to warn others.
Some good news for consumers
The Consumer Financial Protection Bureau (CFPB) filed a proposed order in June that would require Freedom Mortgage Corporation to pay a $3.95 million penalty for submitting error-riddled mortgage loan data to federal regulators.
In October 2023, the CFPB sued the nonbank mortgage company for violating both the Home Mortgage Disclosure Act (HMDA) and a 2019 CFPB order. In addition to the civil money penalty, if entered by the court, today’s proposed stipulated judgment and order will require Freedom Mortgage to regularly audit, test, and correct the company’s HMDA data.
“Freedom Mortgage is a repeat offender that has ignored requirements to submit accurate data that help federal regulators maintain a fair home lending market,” said CFPB Director Rohit Chopra. “The CFPB is making sure that Freedom Mortgage pays for their actions as well as institutes guardrails to prevent future violations.”
Freedom Mortgage Corporation is a privately held nonbank mortgage loan originator and servicer headquartered 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 worth almost $100 billion.
Our goal with Wallet Warnings remains the same – to help you safeguard your money. If you have any questions or need any additional information about anything discussed 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 Shelby County trustee. She writes the regular Wallet Warnings feature.
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