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According to BBB, cryptocurrency fraud is the riskiest scam for consumers today
Cryptocurrency and other investment scams are now the riskiest scams in the United States, with cryptocurrency scammers often scamming their victims out of thousands of dollars, the Better Business Bureau said.
Scammers have found creative ways to rob investors of their money, the BBB said in its annual report relationship on the biggest scams of 2023, based on 67,000 scam reports.
According to the BBB, about 80% of Americans targeted by cryptocurrency and investment scams lost money last year. The average dollar amount lost was $3,800, “but many people lose much more” in crypto scams, She said Anna Werner, CBS News national consumer investigative correspondent.
Hackers use social media, video game platforms or text messages to contact people and brag about how well they are doing financially thanks to a cryptocurrency investment. After the targeted victim responds, the conversation quickly turns into a question, Werner explained.
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“This is where scammers trick you into buying, trading or storing digital assets – like cryptocurrency – on fraudulent exchanges,” Werner said.
Cryptocurrency is an unregulated investment space, which federal regulators and consumer advocates say makes it ripe for fraud. The popularity of cryptocurrencies exploded during the pandemic as some investors became curious about the craze and poured funds into bitcoin, ethereum, solana and other tokens. Today, the sector boasts a market capitalization of $2.65 trillion Forbes.
While cryptocurrencies have proven profitable for many investors, they are not risk-free. Companies that were once considered legitimate have since imploded, like FTX, once one of the largest cryptocurrency exchanges in the world. FTX dissolved in 2022 amid an $8 billion funding shortfall and allegations that former CEO Sam Bankman-Fried had taken client money to prop up a struggling hedge fund.
Cryptocurrency investors did too reported losing billions of dollars due to hacks or scams. A 70-year-old California woman filed a lawsuit this year against Chase Bank after her lost $720,000 to a scammer in a crypto scam.
Rounding out the list of top financial risks in 2023, the BBB named employment scams as the second riskiest scam. That’s when a scammer contacts a victim and convinces the person that they have been hired at a company and need to complete employee information.
In reality, the scammer is stealing someone’s personal information. Victims lost an average of $1,995 in employment scams last year, the BBB said.
According to the BBB, online shopping scams are the third riskiest. Victims typically log in to a fake website to purchase an item, but the scammer does not deliver the product. The BBB said victims lost an average of $71 in these types of scams last year.