MYRTLE BEACH, S.C. (WBTW) – For one North Carolinian, it started with the promise to earn enough money to buy a house.
After meeting “Vether Weber” on a dating app, the person was then coached how to create an account, obtain a loan and then “invest” in cryptocurrency. Then, after sending more and more money, Weber’s messaging account was disabled, their contact information disappeared and they’d blocked their victim.
By the end, the person had lost $75,000 to the cryptocurrency scammer, according to their firsthand account to the Better Business Bureau.
That scam, reported in February, is the highest dollar amount someone in the Carolinas has lost to a cryptocurrency scheme, a type of fraud that has seen an exponential increase since the start of the pandemic, according to officials.
The February scam included sending money to a French bank. The fraudster then claimed the investor had made money, but needed to send more to pay for taxes. The scammer pressured their victim to give more, claiming that they couldn’t lose time and risk not making as much.
In other scams, hackers broke into social media accounts to convince users’ friends to invest in cryptocurrency. Then, after the money went through, the scammers vanished.
Nationwide, there were more than 1,680 cryptocurrency scams reported to the Better Business Bureau from Jan. 1, 2020, until mid-July of this year, according to the agency. There were only a couple hundred in the five years before the pandemic hit.
There were five cryptocurrency scams reported in South Carolina from 2015 until the end of 2019. The most someone lost during that time was $2,000.
Then, from 2020 until mid-July of this year, there were 17, with the highest loss coming in at $10,000.
One person in the Carolina Forest area in Horry County lost $4,500 last November after a scammer convinced them to send bitcoin and gift cards to buy office equipment as part of a work-from-home scheme.
In Sept. 2020, a person in the Florence area paid a scammer $500 as part of a cryptocurrency pyramid scheme after being told they had to recruit two other people in order to qualify to make $4,000 from that “investment.” Then, they were told them had to complete a “flower” of 15 people to get the money. When the victim questioned it, they were then taken off weekly worker calls.
“If I had known this I wouldn’t have joined at all,” a Better Business Bureau complaint, which has been edited by News13 for clarity, reads. “This occurred during the start of the pandemic and I was trying to get money to save everything I worked for and was scammed for $500.”
In another case, a victim worked with a person named “Bella Hendricks” with Tradevalo, which is not a legitimate business, to make $5,200 off a $500 investment. After four days, the investor was told they’d made more than $7,000 and had to “upgrade” and pay a $2,000 deposit to get the money because they’d made “too much.” The victim asked what happened if they didn’t pay, and the scammer never responded.
Not all cryptocurrency scams involve investing, according to Bailey Parker, the communications director for the South Carolina Department of Consumer Affairs. In most cases, is also being used as a way to demand payment, since cryptocurrency is essentially untraceable.
“Once you spend crypto, once you initiate that transfer, you are not going to get that money back,” Parker said.
Scams typically demand that a consumer use a specific, usually odd, type of payment. While those used to mainly be wire transfers or gift cards, prepaid debit cards and cryptocurrency are being added to that list.
Parker said those untraceable methods are used in common schemes like a “grandparent scam,” where a fraudster claims they’ve kidnapped a victim’s family member and demands money in return for their safety.
In 2020, Parker said that $100 million nationwide was lost to cryptocurrency scams. Last year, it ballooned to $680 million.
Younger age groups appear to be more susceptible to cryptocurrency scams than elderly generations, according to a 2021 report from the Better Business Bureau, with men more likely to fall for them than women.
Cryptocurrency payments were used in 3.4% of scams across all age groups. It’s the most common payment for those between the ages of 25 to 34, where cryptocurrency makes up 5.5% of payments to scams. Among the elderly, it drops to the bottom of the list.
However, while cryptocurrency schemes make up only 1.9% of reported scams, people tend to lose more money on them. When looking at scam as a whole, half of people lose less than $169. When it comes to cryptocurrency, more than half of people lose more than $1,200. And when targeted by a cryptocurrency scam, 66% of people will lose money.
Online purchase scams still remain the most risky one consumers face, but from 2020 to 2021, cryptocurrency jumped from the seventh to the second most risky type of scam. In Canada, it’s now become the most risky scam.
Parker said that there’s a misconception that the elderly are scammed more than any other generation. But while Millennials fall for more schemes, the elderly tend to lose more, likely because they have more wealth than younger Americans.
Cryptocurrency scams can also be advertised by social media influencers.
“We always want consumers to be wary of a crypto that is brand new, because it is very easy for people to advertise crypto or another product that is fake,” Parker said.
Other red flags include if an online seller demands payments only be made in cryptocurrency, if investment opportunities are advertised as a limited-time deal or if a person guarantees there will be a return on an investment within a short period of time.
“We want consumers to be on guard, not that we want to scare people, not that we want them to be paranoid, but we want them to be aware of the reality as you are shopping online, as you are investing in new types of investments,” Parker said. “We always want to be protecting ourselves, first.”
The number of people being scammed – along with how much they are losing – is likely much higher than reports indicate. Parker said many people won’t alert authorities because they are embarrassed or haven’t lost any money.
However, she said people still need to report so that agencies know what is happening and can educate consumers and businesses. And even if a victim hasn’t lost money, they might have given away their personal information, which can then be used for identity theft.
In some cases, Parker said alerting authorities about a scam might mean the victim can get some of their money back.