How to spot scammers in crypto?


How to spot scammers in crypto?

Hey Friends, this month’s topic is: Beware of scammers, especially in Blockchain!

Today I would love to tell you a story about the craziest scam I’ve been targeted with until now, but previously I want to show you a few ways to understand scam and protect yourself a bit better from scammers.

Common ways you could be scammed

First, there are thousands of crazy scams going around, unfortunately I couldn’t list them all, so here are the most common ones in crypto, due to my own experience.

1) The probably most common way is Phishing, here the scammers “fishing” for your personal information, mostly in emails that look serious from organization or people you could know or that sound somehow interesting to make you click on links or attachments. If you do click them, they usually try to get some log-in information and maybe credit card Data from you.

Most common samples:

  • Mails from your Boss or managers of your Company telling you they’ve lost the online banking credentials or ask you to directly pay someone.
  • Mails to look as they would come directly from your Bank asking you to fill an authorization form or grabbing for your Log-in through a pop-up

2) On the second place I have discovered Advanced Fee Fraud. Here somebody is requesting you to send out money upfront for e.g. shipping or processing fees in return for goods, money or else. If you pay the scammers either disappear or come up with a bunch of other charges, usually going higher every time (Kind of a Funnel for Scammers). Here it’s typical that they contact you very often once you reply and try to pressure you.

Examples:

  • The typical “Nigerian Prince” e-mails, where he is telling you a insane story and try to get your passport as well as asking you to send some money upfront to help him recover his family’s money or anything like that.
  • The most common one in crypto like send me 1ETH to get 2ETH back, or send me a fraction of BTC to pay the transaction fees for a gift upfront
  • The African Sculpture Scam – Read about my own experience very detailed later in this Blogpost
  • Could take a lot more faces: Lottery scams, Pet scams, Romance Scams, Rental scams, Online sale scams and so on….

If you would like to know more about the different types of scam or currently undergoing a suspicious deal you want to crosscheck if it could a type of scam, I recommend reading the following websites:

1) https://www.scamwatch.gov.au/types-of-scams - The official site about scams from the Australian government.

2) https://www.moneyadviceservice.org.uk/en/articles/types-of-scam a very detailed list of possible scams easily explained.

But, how to spot a scam?

To prevent yourself from scams, you need to discover them before it’s too late. As there are loads of different types as described before it’s sometimes harder than you think. That’s why we’ll show you now a few points on how to discover if somebody is tricking you.

1) The easiest way is your inner red light turning on if it’s too good to be true There are almost no golden opportunities or get rich quick schemes, and if there are some, they’ll be presented to you from an old friend, not a stranger you’ve never met before.

Even when it’s more common in the “Blockchain World” than anywhere else to do some crazy profitable deals you shouldn’t fall for that so easily. Even if the greed hits, try to stay a bit suspicious if someone you don’t know tells you about a “once in a lifetime” opportunity.

2) Disclosure of (additional) Information seems to be a problem. Mostly the scammers will present a few, pretty official looking documents from their own if it’s useful to the story. If you then ask for more information, they will find a bunch of excuses to either decline your request or to delay the process. So, if it takes a few hours for additional photos of e.g. your contact person or the goods involved you should at least further investigate the situation. Also, if they send documents that are blackened on important parts, try to get them in their original version and verify the author. Probably here’s something faked.

3) As every good salesperson does, the scammers will try to pressure you timely. They put a sense of urgency into the deal, e.g. a short timeline to take the opportunity or higher cost if you wait and think for a few days. But rather than normal sales guys they are pretty aggressive in their attitude. Once you try to get some delay and keep your mind clear, they will simply not stop contacting you and often other involved persons will appear. They do it by reason to trick your mind and don’t let to overcome so many thoughts that it could be a fake. Stepping back from the situation, put your phone on mute and meditate for 10min could really do magic here.  

4) The story sounds crazy but on the edge to possibility. Story’s from scammers are always a bit crazy and you’ve probably not heard something like that before. Even if they could be possible under some circumstance, there are no similar things around if you try to DYOR on what they’ve told you. That’s often a sign it comes straight out of their mind. The best example here is definitely the “Nigerian Prince”

5) You seem to be talking to talk to important people, but you can’t find anything on the internet. Scammers often impersonate other people and act as they’d be really important in some matter, e.g. big bank managers, investment specialists, your supplier’s manager or even politicians in another country. But all of them have one in common. If you research, you’ll not find much information about them. Seriously, in 2019 almost every halfway important person can be researched on the internet. There are some cases where they may keep their privacy but anyway you should become a bit cautious here.

And then, how to investigate a scam?

Once you’ve discovered you may be scammed you can directly block every contact to that scammers, if due to any reason you’re unsure whether it’s a real deal or could be scam there a few things you could do to build more confidence on the situation also some online tools can help to discover the truth.

1) If somebody sends you a passport copy to build up trust, ask for a videocall to verify the person asap. Even a picture with him or her holding the passport doesn’t bring full security, as you know they are parts of a lot of KYC processes on all kind of exchanges and could be stolen too. A videocall ensures you at least the Passport pic is real.

2) You can use websites to check the authenticity of images or even PDFs to see if the document itself has been manipulated or if a picture is photoshopped. Some good sites are https://extractpdf.com or https://imageedited.com 

3) Company’s registered as Limited company’s or similar will usually have a company no. XXXXXXX Which you can use to get additional information from the company countries government websites, at least if you’re dealing with businesses in Europe or US. So if somebody sends you a company registration to build further trust, maybe you should look a bit closer. For instance, company houses in the UK or for Germany the “Bundesanzeiger” will bring some clearance. Here is almost every registration detail available to the public. But, do not only check for names, also look closely if the business was registered in person, by a notary or just submitted electronical. This easily can be done with a stolen passport online in some countries. If you’re unsure about the authenticity after your investigation you can simply call the authority that has issued the Passport.

4) If you did your research in some cases you may find a website referring to the person you’re trying to deal with. If that is the case, have a look if there are contact details. If they are different from that one you using to stay in touch with that person? Try to reach out to that ones mentioned on the Website and tell them a bit about the deal and that you’ll like to verify you’re dealing with them. If they don’t, they will tell you, if it’s a real deal they won’t be angry if you do some research. If all seems to fit, you can research the website itself at its registrar company or an online information service like https://whois.com , if it’s online since a few weeks or some months only, it’s not a good sign.  

5) If due to any reason, any person asking you to make bigger payments you should better ask for including an escrow in the deal. It’s building another layer of trust, but make sure it’s an official one and is fully registered in your country to manage other people’s money, often lawyers or notary’s do this kind of work. It’s important here that you search for them as if another scammer is presented as an escrow you’ve not won much.

What to do when you ‘re sure you’ve been scammed?

1) Once you’re sure you have been scammed, the first thing is to save some information. Take screenshots from the conversations and save all documents and involved contacts before you make sure to block everyone of them. Do not stay in touch further with these people it will not bring any good. Just block all contacts and never ever reply to them again.

2) If you really have been scammed you may report it to your local police station and if this is covered maybe show your police report to the insurance afterwards (yes, there are really scam insurances available). If nothing really happened or you just don’t want to involve the police, there are several sites to report scams Try to publish some useful information about the people that scammed you and provide names of all participants as well as the story of the scam. This makes sure their stolen identity’s will become worthless and other people may be warned once they research the same scam.

3) Write, blog or vlog about your scam. Don’t be ashamed, everybody could have undergone the same. Tell the story of your scam openly and share any relevant information on your personal website or social media to have a similar effect as in point 2) and make it a bit harder for the scammers the next time.

My personal experience

Have I been scammed? Yes, I’ve been scammed recently. They took around 300 Euro, my Passport copy and my company registration in a “valuable African sculpture scam”. So, if you’re ever dealing with me about a bigger distance and for a bigger sum, simply ask for a video or in person chat. I would never disagree. Also, I just got a new passport. My stolen one was valid until May 2019, don’t believe If somebody shows it to you. Maybe I’ll tell you more in another Blog somewhen…

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