Beware of Bitcoin scammers

Beware of Bitcoin scammers

Red Deer butcher and bistro spreading the word about bitcoin scams

Mercedes Messinger has learned to spot those under the spell of Bitcoin scammers.

When they come in to use the Bitcoin ATM in her shop, they often have cellphones pressed to their ears, clearly taking instructions from some distant guide.

Another sign is the newcomer’s reluctance to talk to — or even make eye contact with — staff at Messinger Meats, an artisan butcher and bistro in south Red Deer, and the only location for a Bitcoin ATM in central Alberta.

In the two years she has had the machine in her shop at 2067 50th Ave., she estimates she has spotted — and in most cases, been able to warn — about 20 people in the sights of a scammer.

The fraud takes a variety of forms. But the end result is the same. Victims are convinced to plug thousands of dollars in cash into the Bitcoin ATM to send the money to another party.

Sometimes, the scammer convinces their mark they are in trouble with the law and need to pay up right away or face jail.

Other times, the caller poses as someone from the Canada Revenue Agency who claims the recipient owes thousands in back taxes. The scams are so sophisticated, the crooks sometimes pretend to transfer calls between various offices in the federal government or to the target’s own accountants.

Other times, catfishing — pretending to be someone else online — is the angle. People are coerced into sending money to someone who contacted them posing as a distant relative or possible friend or romantic interest.

Often, a hard-luck story follows with the inevitable request for cash — in Bitcoin, of course.

“It’s incredible with what they come up with, actually,” said Messinger. “It’s amazing, and people are so scared, they fall for it.”

She and her staff have managed to convince many to not plug their wads of cash into the machine. However, some don’t listen, and their heartbreaking stories have led her and daughter Vanessa to make it their mission to spread the word about the Bitcoin scam.

One woman showed up in an expensive car and deposited $9,000 into the Bitcoin machine. Soon after, she was back, livid and demanding her money back.

Another man put in around $6,000 to $8,000, convinced by the scammer that he was on the line with the Canada Revenue Agency and he better pay up or be at the mercy of the bureaucratic Big Brother.

“I think I went up to him three times and he shushed me away,” said Vanessa.

“He came back a half hour later and he wanted to rip the machine out,” said her mother. “It was a nightmare.”

There have been the success stories, too. A young Syrian man came in ready to convert thousands into Bitcoin.

Terrified he would lose his residency status in Canada, he had gone around to friends to borrow the $6,000 he had been told was vital to his future in Canada.

The Messingers talked him out of it in time. “He was so happy. He was so relieved.”

Vanessa said one day, a 17-year-old girl came in already in tears, phone in hand, because the caller on the other end of the line was convincing her she owed money.

Vanessa asked her if she owed any money she knew of. The answer was no.

“Then why are you putting money in the machine?” she asked her.

“It’s just this fear they put in people’s heads,” she said.

Messinger posted her own warning sign on the machine as soon as she noticed the scam. She has been working with Bitcoin Solutions, the Edmonton-based company that provides the machine and 42 others across Canada, and the RCMP to highlight the scam.

RCMP announced on Thursday it was distributing warning posters throughout Alberta. The sign is already on the Messingers’ machine, which is also under constant video surveillance that she can see in her office.

It warns “STOP — DO NOT use this Bitcoin machine if you are not in control of the QR code you scan.”

The QR code is typically sent to the victim’s phone and is held up to the Bitcoin scanner and links to a location for the money to be sent to.

Once sent, it is gone forever. Unlike PayPal or etransfers, there are no electronic trails to follow the money.

Bitcoin Solutions president Adam O’Brien said it is difficult to know how many people have been scammed. The company spreads the word through education and signs posted on its machines.

It is also working on software to make it harder for victims to follow through with a dodgy transaction.

O’Brien said they saved someone from being victimized on Thursday who had come to their Edmonton office seeking help.

“Potential victims should understand that they should never use the machine if the Bitcoin are going somewhere that they do not control,” he warns.

If the QR code or digital wallet being scanned is not yours, you are likely being scammed.

Canada Revenue Agency and other government agencies or corporations do not accept Bitcoin and they will not threaten you with jail for unpaid bills.

O’Brien said the scam is not new. iTunes gift cards and prepaid phone cards were earlier variations.

“We are doing everything we can to prevent this and we really appreciate Mercedes and the team at Messinger for helping us in that mission with their boots on the ground,” he said.

From the Messingers’ experiences, there is no typical target.

“They have all kinds of faces. You can’t pinpoint who they target,” said Mercedes.

Messinger is worried conditions are ripe for more victims. Alberta’s recession means many are struggling financially, they may owe money, so they are more easily convinced that phoney collectors are the real deal.

Tax time is coming too, which makes the Canada Revenue Agency scam seem more plausible to some.

So why keep the machine?

Messinger said it is not for the money. She gets a small amount to have the machine in her store. It is a service she can provide to some of her customers and others who use Bitcoin for online purchases.

There are a few Bitcoin investors who stop by to play the market. About five to 10 people a day use the ATM.

If she got rid of it, the machine would go to someone else, she reasons. And who’s to say they would have the same enthusiasm for trying to spot scamming victims.

“Seeing those that we saved gives you such a good feeling.”

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