Crypto Scam Beware!

I have heard some unbelievably sad stories this tax season and it is only the 3rd week we have been preparing and filing returns.

An older Iowan came to our Free Tax Prep site this week and showed me 2 police reports she had filed earlier this month. She received a call on a Sunday from someone informing her that the IRS was on their way to her home to arrest her because she owed $3000.  She was told that if she paid them immediately, the problem could be resolved.  Of course, the bank was not open but, she could pay them with Bitcoin and there happened to be a Bitcoin ATM just down the street from her home.  She was warned that she had to stay on the phone with them the entire time this transaction was being handled.  One ATM would not dispense the full amount, so the scammer stayed on the phone with her the whole time she drove to the next closest Bitcoin ATM which was in Minnesota. 

Her children got involved when she called them because she now had no money to pay rent or buy food or medications.  The two police reports did nothing to help her recover her losses so, her children helped her enroll in the SNAP program (Supplemental Nutrition Assistance Program) to ensure she had food and a friend lent her $300. 

BEWARE: For victims of a crypto scam, recovering funds is extremely unlikely.  Crypto scams are common. The Federal Trade Commission (FTC) received nearly 6,800 complaints of cryptocurrency investment scams from October 2020 through March 2021, up from 570 in the same period a year before. Reported losses grew more than tenfold to above $80 million.

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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