FTC Alerts Public to Rising Crypto ATM Scams

The Federal Trade Commission (FTC) has reportedly issued a warning about crypto ATM scams, with new data showing that the amount of money consumers have reported losing to scams involving Bitcoin ATMs rose nearly tenfold since 2020, topping $110 million in 2023.

And older people are getting scammed the most. Consumers over the age of 60 were more than three times as likely as younger people to say they've been swindled out of cash in these scams, the agency said.

Bitcoin ATMs look like traditional ATMs and operate similarly, in that they can be used for both deposits and withdrawals, but the transactions involve cryptocurrencies. According to one estimate, there are nearly 32,000 in America today, up from just over 4,000 at the start of 2020. 

In many of the incidents uncovered by the FTC, fraudsters contact a victim, or the victim inadvertently gets in touch with fraudsters, and fraudsters claim to be customer service representatives flagging an attempted identity theft or an account breach.

They would eventually send the targets a square QR code connected to a digital wallet. The victims are usually directed to scan the QR code and deposit cash into the Bitcoin ATM, which converts the cash into Bitcoin, which is immediately transferred to the scammers while the victims believe they are protecting their assets.

There are many ways for a scammer to successfully fabricate a scam. The fraudsters pretend to be employees of a government agency or business, including major tech firms like Microsoft or Apple, according to the FTC.

Scams often start when bad actors get a hold of victims’ phone numbers, many of which are increasingly available on the “dark web.” Scammers usually contact victims claiming to flag urgent problems with accounts, sometimes through messages that appear to be legitimate alerts such as pop-up notifications.

In one case, a woman was scammed out of $31,500 after her iPad received a message that looked like a security alert, which led her to a scammer who told her she had been hacked. The fraud group included people posing as an Apple tech support specialist, a bank representative, and two government officials. 

(Source: NBC News)