Fraud experts explain growing cryptocurrency-based scams at community event

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The Brown County Sheriff’s Office has investigated over $4.6 million lost to cryptocurrency scams since the beginning of 2024, according to Sgt. Justin Raska.

A relatively new scam format in which scammers direct victims to convert cash into cryptocurrency through crypto ATMs is exploding. Cryptocurrency ATM-involved scams in Wisconsin increased by 99% in one year, Department of Financial Institutions attorneys supervisor Robin Jacobs told a room full of Green Bay area residents Oct. 16.

“What the cryptocurrency ATM allows you to do is get cash money from your bank or a regular bank ATM, deposit your money into the cryptocurrency ATM and then it’s converted to crypto and sent to a criminal’s virtual wallet,” AARP Wisconsin senior program specialist Courtney Anclam told the Green Bay Press-Gazette. “Scammers are coaching people through how to set up the account you need to send money virtually.”

Cryptocurrency scams were a primary focus of AARP’s Scam Jam, a fraud prevention event hosted Oct. 16 at the University of Wisconsin-Green Bay. The event was intended to raise awareness and educate community members on common scams experts are seeing and how to avoid them.

“Folks are here because scams are so prevalent right now,” AARP communications director Jim Flaherty said. “It’s all about education. … What we always say is, the more you know about something that’s coming, the better you’re well-armed to be able to protect yourself.”

Cryptocurrency imposter scams are on the rise

Imposter scams are the type that typically comes to mind when you imagine a scammer: someone impersonating another person, business or government entity in order to trick you into providing personal information or money under false pretenses. What’s new with cryptocurrency-based scams is how the scammer is collecting your payment.

Instead of requesting your bank information or sending you a payment link, cryptocurrency scammers are directing victims to crypto ATMs and instructing them to put cash into the machine, which then goes directly to their virtual wallet, Anclam said.

Many people aren’t very familiar with cryptocurrency and how it works, Anclam said, plus, crypto ATMs look similar to regular ATMs. Often, scammers won’t tell the victim they’re doing a crypto transaction, leading the individual to believe they are making a regular payment with cash, she said.

In Green Bay, 20 cryptocurrency ATMs are within a half mile of the city’s center, Jacobs said. They can be found in grocery stores, gas stations, liquor or tobacco stores, hardware stores, malls, laundromats and hotels, she said.

Once your money has been converted and is in the scammer’s virtual wallet, it’s almost impossible to get back, Flaherty said.

With any potential imposter scam, the best thing you can do is verify the information you are being told before acting, said Michelle Reinen, the Trade and Consumer Protection Administrator for the Department of Agriculture, Trade and Consumer Protection. If you receive a call asking for your personal information or telling you to make an urgent payment, hang up and call the person or entity yourself from a phone number you know to be legitimate.

Jacobs also reminded Scam Jam attendees that “nobody in a legitimate business or in the government is going to come to you and say you have to pay for something in crypto.”

AI makes imposter scams more believable

Another focus at Scam Jam was AI and how scammers are using technology to make their scams more believable. One scam the consumer protection department sees often involves the use of AI to mimic a loved ones voice and convince a victim their family member is in desperate need of money, Reinen said.

In what’s referred to as a grandparent scam, scammers can use AI to make it sound like your family member is calling to say they have been arrested or in a car accident and need immediate help. It only takes about three seconds of audio to clone a voice, Reinen said.

Scams using AI to create celebrity deep fakes are also growing, Flaherty said. If it appears a celebrity is engaging with you on Facebook, he said, it’s most likely a scam.

Being wary of things you see on or communications you receive over the internet is vital to avoiding scams, Anclam said, especially as new technology allows scammers make them appear more real.

Scammers prey on vulnerability, so stay vigilant

Scammers prey on vulnerability and panic, Flaherty said. Whether it is sending you a link to sweepstakes you won or posing as a law enforcement agent claiming you’ll be arrested on the spot if you go to a police station before paying a fine, he said, scammers are trying to get you to act quickly.

One of the best things you can do to avoid scams is to “be a little suspicious” of things you see online or are told by an unknown number, Anclam said. Don’t take everything at face value, and if something feels off, verify it for yourself.

Instead of acting immediately in response to an urgent or threatening message, “take a moment to stop and think,” Reinen said.

Vivian Barrett is the public safety reporter for the Green Bay Press-Gazette. You can reach her at vmbarrett@greenbay.gannett.com or (920) 431-8314.

This article originally appeared on Green Bay Press-Gazette: Fraud experts say cryptocurrency, AI based scams are on the rise