BBB and CT Business Owners Warn of Cryptocurrency Scams

With the hype around cryptocurrency, bad actors are in on the action.

The Better Business Bureau said cryptocurrency scams reported to them have tripled between 2019 and 2021, making scams involving crypto the second riskiest of all scams last year.

And, the BBB said it’s costing people around the country and here in Connecticut a lot of money.

Just last year, the BBB received complaints with losses totaling nearly $8 million. The Better Business Bureau Serving Connecticut said those estimates are most likely very low, though, as most people impacted don’t report that they were scammed.

Two Connecticut business owners still can’t believe what they say happened to them.

“I never in my life thought anything like this in my life would happen to me. I thought I’d be smarter than this,” said Lori-Ann Marchese, owner and trainer at Body Construct in New Britain.

But the pandemic took quite the hit on gym owners, so when someone Marchese trusted posted a video talking about investing in cryptocurrency, she thought it could help her business and therefore the clients she cares about.

“I thought I was talking to a client of mine. I’m embarrassed to even say it, but I did give them that money because it was supposed to be like a mentorship program,” Marchese said.

Marchese sent several thousand dollars through an app, money she never saw again.  She realized scammers were in on it when she said they hacked into her Instagram account and started using her image to con her followers on social media to invest.

“They started to send messages as me to all of my following,” Marchese said.

Something all too similar happened to Marchese’s friend, fellow body builder and owner of a massage business in Farmington, Dora Avila. Avila said a connection reached out to her to help with marketing. Once she gave them her Instagram password, she was locked out of her own Instagram page, too.

“The next day, there were posts [on my page] on crypto, houses, cars I’ve never seen or bought, more so taking my advantage of my platform as well as my social following to then go and invade my Instagram and start sending messages to my followers which was horrible,” Avila said.

Sure, Avila didn’t lose cash, but she invested a lot of time into creating a social media following of almost 14,000 people, which she lost when she lost access to her account.

She said she’s reached out to Instagram multiple times for help. We reached out to them multiple times, too.

“We just came out of a pandemic and we own businesses, so coming back from that on top of being hit in that situation was horrible,” said Avila.

Both women said they did everything they could to let their friends and followers know that it wasn’t them reaching out from their accounts about investing in crypto.

Meanwhile, they hope their stories remind all of us to protect your personal information, including social media passwords, and to be wary of whatever we see online.

“Do not do anything, contact the person on the phone first or you’ll end up like me and my friend Dora,” said Marchese, who she’s working with police in hopes of tracking down where her money went.

We reached out to New Britain Police for information.

The Better Business Bureau has these similar tips to avoid cryptocurrency scams:

• Guard your wallet. If you buy cryptocurrency, the security of the wallet is of prime importance. If you lose the key, then your funds are gone permanently.
• Look carefully at email addresses and website addresses. Phishing scams often try to trick people into logging in and then capture the log in credentials. Those then can be used to steal money. Looking for an exchange with an internet search engine may lead to fake sites which advertise and impersonate real companies. Be especially careful when viewing these on a phone.
• Do not pay for products with cryptocurrency. Be careful if someone asks you to pay with Bitcoin or another cryptocurrency. No one with the government will ever ask for this form of payment.
• Beware of fake recovery companies. Scam companies sometimes claim that they can recover stolen money – for a fee. These are usually scammers.
• Watch out for fake reviews. Scammers often create fake reviews for their own companies.
• Be wary of celebrity endorsements. It can be tempting to rely on a prominent figure who has invested in cryptocurrency. But those endorsements are often not authorized and even if they are, the celebrity may be paid for the effort and may not know more about it than you do.
• Be careful about claims made on social media. This is the most commonplace for people to encounter investment scams.
• Be wary of “friends” who reach out to you on social media and tell you how they made money with cryptocurrency. Accounts are frequently compromised. Call your friend by phone to see if it is really them.
• Do not believe promises of guaranteed returns. No one can guarantee how an investment will perform.

The BBB of CT said it’s very important to report a scam or register a complaint so you can help prevent something similar from happening to your fellow community members. The BBB suggests these avenues and your local police, too:

• Better Business Bureau — file a complaint with BBB.org if you lost money or report a scam online at BBB.org/scamtracker.
• Federal Trade Commission (FTC) — file a complaint online at reportfraud.ftc.gov or call 877-FTC-Help.
• Internet Crime Complaint Center (IC3) — file a complaint online at ic3.gov/complaint
• U.S. Securities and Exchange Commission — SEC.gov/tcr