Crypto scams are now on the rise, with scammers seemingly setting their sights on younger demographics. A recent press release from Consumer NZ highlighted the case of a tax accountant in Auckland who lost $100,000 to such a scheme.
The woman identified as Rachel was approached through a dating site. The conversation with her match shifted from the dating site to WhatsApp. Consumer NZ noted that this shift was a warning sign as dating platforms use algorithms to track user conversations and pick up scam trends. They then remove identified scam profiles.
With the conversation now on a more private platform, Rachel found herself being convinced to try out bitcoin trading. Her match, named Haoyu, sent her a link to his supposed trading app. The scam was well devised and elaborate with the app incorporating a fake Forex mirror app. There were also readily available customer service representatives responding to any questions posed by Rachel. She started her investments in small amounts, but this quickly escalated to the point she had sunk about $100,000 in the platform. It was when she found she could not withdraw her funds that Rachel realised she had been scammed.
Cert NZ has previously warned about crypto scams that have reputedly caused financial losses of about $500,000 in the March to June period. The amount may even be higher as few victims report their losses. The cybersecurity government agency has highlighted that cryptocurrencies are high risk and very volatile. They have warned that investment opportunities that offer high guaranteed rewards were likely too good to be true.
The Financial Markets Authority has also received 158 complaints concerning investment scams and fraud during the first half of 2021. Investor capability manager, Gillian Boyes, has noted that cryptocurrencies are being pitched by scammers as a hot investment. The lack of regulation sadly means that those that are duped will find it difficult to get back their money. Boyes is advising investors to not get embroiled in such investments just because a friend recommends it or it pops up on social media.
Netsafe’s Angela Boundy has echoed similar sentiments and pointed out that some of the social profiles being used by scammers are being hacked or socially engineered. This has made it easier to convince victims that they are being approached by friends or family to invest. Consumer NZ is also advising those being approached about such investments by people they know through social channels to be wary and seek to confirm it is the true person by reaching out to them through other channels.
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