New year's resolution: Avoid crypto scams

Here’s a New Year’s Resolution we could all benefit from: be vigilant about cryptocurrency scams. Fraud involving crypto investment schemes and crypto as payment in other schemes skyrocketed in 2022, according to the Federal Trade Commission. Reported losses exceeded $1 billion.

Last year, the evergreen online romance scam turned into crypto “investment opportunities” – starting on such platforms as Facebook, Instagram, and LinkedIn in addition to dating sites and apps. The target can see their assets gaining value as they continue to invest more money, only the crypto exchange they are on is fake. When they try cashing out, they’re told they must first pay excessive fees, and they don’t get their money back.

In the ‘crypto as payment’ schemes, criminals convince targets that some urgent matter requires quick payment and direct them to a nearby crypto-ATM machine that converts cash into electronic currency. These losses are virtually unrecoverable.

The best way to avoid these scams – really any scam – is to know about them so you can avoid engaging from the start. Seek a financial advisor’s guidance on investing, and anyone pressuring you to pay by crypto to address and urgent or time-sensitive matter is a criminal.

Utility bill scams

Winter is upon us and with temperatures plummeting in many areas, keeping the heat on is critical — a fact that criminals try to take advantage of. They impersonate utility companies, threatening to cut off service if an immediate payment isn’t made. The goal of these crooks is to create a sense of urgency so the target acts quickly to pay the alleged past-due balance.

If you get a surprise visit or call from the “utility company” this winter, hang up and don’t engage. Contact your utility company in a way you know to be legitimate (online account, app, or customer service number from a prior bill) to determine if there is a problem with your account. And know that no legitimate company will seek immediate payment for a new-to-you issue.

When a favor is really a scam

We all want to be helpful, especially when the request comes from our boss, a friend or a community leader. This instinct is something criminals take advantage of. That’s why you should be suspicious of any urgent message that asks you to “do me a favor.”

These scams can impersonate a boss needing last-minute gift cards for an employee appreciation event, or a local faith leader who needs a quick favor of you to buy gift cards to support a family in need. These quick gift card requests promise reimbursement, which never comes.

Be aware of short, urgent text messages, emails or social media messages asking for your help purchasing gift cards. Criminals can hack into the profiles of friends, family, and community members to send messages in their name. In the professional space, the message often looks like it’s from your employer, but the criminal may have added a letter or number to the sender information.

Like so many scams, this one relies on getting the target into a heightened emotional state – of course you want to respond to your boss quickly or help your faith community support those in need. If you ever get a message asking for your help buying gift cards, contact the sender in a way you know to be legitimate and verify. Chances are the request was from a criminal scammer.

Credit repair scams

If you’re like a lot of Americans, you spent a lot this holiday season and you might be in the mood to tackle your debt in the New Year. Getting yourself out of debt is hard work and it is time intensive. Be wary of offers of guaranteed quick fixes.

Criminal scammers prey on financial fears by offering simple solutions. These offers usually involve up-front fees (which are illegal), bad advice like stopping communication with your creditors and vague details on what services they provide. If you need help getting out of debt, turn to an organization like the nonprofit National Foundation for Credit Counseling.

Be a fraud fighter! If you can spot a scam, you can stop a scam.

Report scams to local law enforcement. For help from AARP, call 1-877-908-3360 or visit the AARP Fraud Watch Network at http://www.aarp.org/fraudwatchnetwork.