Have You Lost Money to a Crypto Scam or a
Broker Fraud?
We spend a lot of time online. In fact, we may spend more hours a day online than off. We have myriad apps and platforms for buying things, banking and trading.
It’s never been so easy, quick or convenient to use financial services. However, with new opportunities come new dangers. The number of online scams continues to break records every year. Law enfocement authorities worldwide identify crypto scams as the fastest-growing type of fraud.
Thousands of people lose money to online frauds of all kinds every year. However, almost no one is going to stop going online. The key is knowing how to identify potential scams and taking steps to keep your money safe online.
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The Problem of Crypto Scams
When the word ‘cryptocurrency’ comes to mind, people either think of it as the wave of the future or an outright scam. Even in the best of circumstances, cryptocurrency is risky given the volatility of bitcoin prices. However, many argue that digital currencies are here to stay.
Is Crypto a Scam?
Many financial experts were skeptical about cryptocurrencies when they were first introduced. However, many of these skeptics have become crypto investors. People may ask, ‘Is crypto a scam?’ The answer to this question is that there isn’t anything inherently fraudulent about digital currencies. However, cryptocurrency is used as a vehicle for many types of fraud.
Cryptocurrency was designed as a way to eliminate fraud. It’s ironic, then, that digital currencies have become the payment method of choice for cybercriminals. The blockchain, where cryptocurrency trades take place, is thoroughly encrypted and was intended to be hacker-proof.
Also, the blockchain was designed for transparency. Every transaction is recorded on the blockchain permanently and can’t be reversed or erased.
However, the blockchain is also anonymous. When we make a bank transfer, we need to know the names and contact information of the people who receive it. However, none of this information is required for bitcoin transactions.
When we send cryptocurrency, it goes into anonymous bitcoin wallets that can be held by anyone, including scammers. Crypto scammers take advantage of the anonymity of the blockchain to give them cover for their illegal activities.
Types of Crypto Scams
There are almost as many types of crypto scams as there are varieties of fraud. Any fraud that uses cryptocurrencies as payment can be classed as a crypto scam. The following are some of the most common types crypto scams:
There is a growing interest in crypto trading. Although not all bitcoin brokers and crypto trading platforms are fraudulent, the number of crypto trading scams outnumber legitimate opportunities. That’s why it’s important to research brokers well before opening an account. The best way to keep your money safe from crypto trading scams is to ensure any broker you work with is fully licensed and transparent clearly stated terms and conditions.
People look for love online, which can carry its own delights – and risks. There is no secret that there are a lot of dodgy characters lurking on social media and dating sites. Not only can we get our hearts broken – but our savings are in danger as well. When the topic turns from romance to money, it’s time to break up, and fast.
Many of us have gotten WhatsApp spam. People often infiltrate WhatsApp groups or get our numbers and try aggressive marketing tactics on people. Many of these are frauds, and also include crypto scams. The scammers take advantage of the loose regulations on WhatsApp to target people.
Not many people really understand how crypto mining works. That’s understandable since it takes a tech and mathematical whiz to solve complex problems on supercomputers that produce cryptocurrency.
Rather than participate in crypto mining directly, traders may want to invest in the production of cryptocurrency. A crypto mining scam is a fake opportunity to invest in this process. Of course, nothing is really mined. Most often, cyber criminals will steal the money and disappear.
NFTs or non-fungible tokens are the new wave of digital assets. People use NFTs to preserve intellectual property online, and these tokens are one way to virtually preserve and exchange art and logos. Like ICO scams, which encourage investments in fake coins, scammers will encourage people to invest money in NFTs that are either non-existent or have little value.
Social media is a great way to meet people and interact about just about anything. It’s no surprise that it’s also ripe ground for crypto scams. Cybercriminals find people on social media who want to make money fast. They take advantage of their desperation, create fake personas to inspire confidence, and end up stealing their money.
Merchant and Broker Scams: How to Spot Them
Although crypto scams continue to grow, there are still plenty of ‘old-fashioned’ frauds, including broker scams. Whether the goal is to buy a new home, send a kid to college, or grow funds for retirement, investing is seen as the best solution to expand a nest egg.
Although there’s no doubt that investing is a good idea and often profitable, many people throw caution to the wind when investing. It’s easy for those who aren’t familiar with how trading scams work to hand over their savings to an unlicensed broker who promises them miraculous returns.
Even sophisticated investors can lose thousands, if not millions to broker scams. That’s why it’s important to do due diligence before opening an account and steering clear of the following:
- Unlicensed or third-rate licence
- No transparency or list of credentials
- No names of people who run it or contact information
- Vague terms and conditions
- Fees that are higher than the industry average
- Fake bonuses
- Guarantees of returns
- Lack of communication
- Warnings from regulators
- Legal action was taken against the broker
- Refusal to grant withdrawals
If you’ve already signed up with a broker you suspect is fraudulent and seek fund recovery, close your account and speak to our experts today.
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Types of Fund Recovery
If you’ve lost money to fraud, the next step is to pursue fund recovery. It’s important to be careful about fund recovery services. Steer clear of companies that guarantee they will get 100% of your money back in just days. False guarantees are what got a lot of people in trouble in the first place, and it’s not worth risking getting cheated again.
Our professionals will work closely with you and have your back through the fund recovery process. Like doctors and lawyers, fund recovery services can’t promise to recover every penny in a short amount of time. Instead, there are many factors involved that can determine the relative success of fund recovery efforts. However, if you have our experts on your side, you can greatly increase the chances of fund recovery success.
Credit Card Chargebacks
One of the most common types of fund recovery services is credit card chargebacks. If you notice an unauthorised charge on your credit card bill, you can ask the bank that issues the credit card for a chargeback. This simply means a reversal of charges from the recipient’s card back to yours. When filing a chargeback request, it’s important to understand how credit card companies define 'fraud'. We tend to use fraud broadly to denote any dishonest financial service. However, credit card companies and payment platforms will define a transaction as fraudulent only if it wasn’t authorised. This means that if your account was hacked or someone got a hold of your credit card and used it, you can file a fraud complaint because you didn’t authorise the charge. However, if you willingly made a transaction with another party you suspect is a scam, the credit cards won’t define this as fraud. Instead, you’ll have to go through the chargeback dispute resolution process. This means making your case and the merchant will make theirs and the issuing bank, like a judge, will resolve the dispute by either granting the chargeback or siding with the merchant and validating the original transaction.
Venmo and Zelle Chargebacks
Venmo and Zelle are quick and convenient payment platforms that allow you to send and receive money instantly. Unfortunately, this is good news for scammers. The speed at which these transactions are made makes it easier for frauds to make off with other people’s money. There aren’t refunds on Zelle and chargebacks are tricky. If you made a Zelle or Venmo transaction using a credit or debit card, you can seek assistance from the issuing bank for a chargeback.
Bank Wire Recalls
As most of us know, it usually takes a few business days before a bank transfer is completed. During this time, it may be possible to cancel a bank transfer. For instance, if you’ve sent money to a broker that you discover may be a scam, you could, theoretically, stop the transfer and have the money returned to your account. In reality, bank wire recalls aren’t simple, although they are success stories. Banks are understandably not quick to recall transfers or freeze funds. However, if the customer provides evidence that the other party is a suspected fraud, it can be done.
Bitcoin Chargebacks
The term bitcoin chargebacks is used advisedly. Often the term 'chargeback' is a synonym for fund recovery. However, in the strictest sense, bitcoin chargebacks aren’t possible because no transactions on the blockchain can be reversed or cancelled. However, if we use the term bitcoin chargeback loosely to mean crypto recovery, it is indeed possible.
PayPal Chargebacks
The PayPal chargeback process is similar to credit card chargebacks. If a charge is unauthorised, you can file a fraud complaint. If you authorised it, you and the merchant will be able to make your case to PayPal, which will resolve the dispute.
Crypto Recovery Process
The crypto recovery process is more complex than credit card chargebacks, but with crypto recovery experts, it’s achievable and often successful. The following are the main steps in the crypto recovery process:
- Client consultation
- Document gathering
- Crypto investigation
- Crypto reports
- Strategy planning
We start the crypto recovery process with a client consultation during which we gather information about your case. We will then ask you to provide documentation, including communication and screenshots providing information about the suspected scam.
We then begin the crypto investigation process using advanced technology and bitcoin forensics to trace the pattern of transactions on the blockchain and discover the identities behind bitcoin wallets. Following the investigation, we provide crypto reports that will help law enforcement track down those behind the crypto scam. Our professionals will help you plan a strategy to approach the authorities and get results.
Want to Get Started with Fund Recovery?
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Our professionals are industry leaders in the field of fund recovery. The Fundrecovery Australia team has extensive experts in all types of fund recovery from forex broker scams to crypto scams and more. We put our talent to work for you and will help you pursue fund recovery with leading solutions and strategies. When it comes to fund recovery, we’re the real deal.
