Published: December 21, 2021 on our newsletter Security Fraud News & Alerts Newsletter.
The FBI Internet Crime Complaint Center (IC3) published an alarming alert. In this case, it was to warn the public of fraudulent schemes leveraging cryptocurrency ATMs and Quick Response (QR) codes to complete payment transactions. According to the alert, “The FBI has seen an increase in scammers directing victims to use physical cryptocurrency ATMs and digital QR codes to complete payment transactions.”
We see that thought bubble above your head. What is a QR code, you ask? Well, they’re everywhere. They are those little codes with squiggly lines that we see all over the place now. They can be scanned with our smartphone cameras to download apps, look at restaurant menus, and pay our restaurant tabs.
QR codes can be used at ATMs that are specific for cryptocurrency wallets and can be used to transfer money between sender and recipient. The cybercriminals have started using these codes to receive payments from victims. By doing this, it makes it nearly impossible to track the payment or find out who the criminals are. It’s a great stealthy scam.
These scams include one where the scammer impersonates someone familiar to the victim. It could be someone from law enforcement, a government organization, a law office, etc. They also have used the ever-popular romance scams, where they gain trust from someone they’ve “matched” with and then take them to the cleaners, and also using lottery schemes. In these, the scammer attempts to convince their victim that they’ve won some kind of sweepstakes, lottery, or award.
What all of the ruses have in common is that they all are asked to use a special QR code to make a transaction at the special ATM and that code belongs to the scammer’s cryptocurrency wallet. Once at the ATM, the victims are asked to make a transaction. They insert “money” that can purchase cryptocurrency and then transfer it using the provided QR code.
The FBI warns, “Cryptocurrency’s decentralized nature creates challenges that makes it difficult to recover. Once a victim makes the payment, the recipient instantly owns the cryptocurrency, and often immediately transfers the funds into an account overseas. “
Don’t despair. The FBI has offered up some helpful tips that apply to this scam, as well as numerous others:
Never send a payment in any type of currency or gift card to someone you have only spoken to online. This applies even if you think you have a relationship with the individual.
Simply, don’t scan a QR code and send payment via a physical cryptocurrency ATM to anyone.
Remember that representatives of legitimate companies won’t solicit personal information from you via the phone, nor will they ask for cryptocurrency payments in this way. If you need to verify something, contact the number listed on your card, account statements or from the organization’s official website.
If you don’t recognize a phone number calling, but they claim to be someone you know and ask for cryptocurrency, don’t respond.
Question if someone states they can only accept cryptocurrency, yet identifies themselves as the government, law enforcement, a legal office, or a utility company. It’s highly unlikely that any such organization will instruct you to wire funds, send checks, send money overseas, or make deposits into unknown individuals’ accounts.
If you do use cryptocurrency ATMs, avoid those that advertise anonymity and only require a phone number or e-mail. These may be non-compliant with U.S. federal regulations and may facilitate money laundering.
Lastly, if you are in the process of making a cryptocurrency ATM transaction and the ATM operator calls you to explain that your transactions are consistent with fraud and advises you to cancel the transaction, you should listen.
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