Social media has become a powerful tool for businesses and, unfortunately, scammers. It’s the easiest way for a stranger to reach out to you, who may not use a real account.
While these companies fight fraud, it’s too easy to misrepresent your profile. Within minutes, you can make up an identity or supplant someone else’s.
Social media becomes dangerous when there are so many scammers a few clicks away trying to get your money.
- Why Are Crypto Scams On Social Media?
- Types of Crypto Scams on Social Media
- Red Flags
- How to Prevent Crypto Scams on Social Media?
Why Are Crypto Scams On Social Media?
But how exactly do they do it?
a. Ecommerce fraud: As a seller, they offer a fake product. As a buyer, they may make a fraudulent refund/return
b. Phishing. They pose as your social media security bot. Your account has ‘security issues’ and asks for your data in a phishing site
c. Money-making schemes. They promote investment opportunities with big promises and an upfront cost involved
d. Advance-fee scam. They offer you a prize for a ‘refundable’ upfront fee
The most common are:
e. Payment fraud. They meet buyers on other P2P websites and bring them to social media. So they can’t ask for help and get no purchase protection
Ideally, scammers want to steal your money anonymously and with no refund option. That’s why they use cryptocurrencies. And the best way to promote Bitcoin schemes is through social media.
Types of Crypto Scams on Social Media
Crypto scammers are on social media for the opportunity: ignorant people. Even though millions are joining the crypto world, most people don’t understand how it works. So if a scammer shows up, they are less likely to get caught.
Here are six ways people are getting scammed right now:
#1 The Giveaway Scam
Have you seen the free money experiment? If you get out and start gifting cash on the street, people will avoid you.
- “It looks suspicious.”
- “It could be a trap.”
- “They’ll probably make me pay later.”
For some reason, this logic doesn’t apply to social media. It looks perfectly right that a celebrity offers to double your cash on a live stream. And while giveaways happen all the time, they rarely involve Bitcoin.
Here’s how the trick looks.
You watch videos on Youtube (typically about finance) when a live stream shows up as recommended. The thumbnail shows a famous person with the words “5000 BTC GIVEAWAY.”
When you click, you’ll find a pre-recorded interview on the left. On the right, you find the event instructions:
“To participate you just need to send 0.1 BTC to 25 BTC to the contribution address. We will immediately send twice the amount to the address you sent us from (0.2 BTC to 50 BTC).
You can only participate once.”
There’s a QR code, a Bitcoin address, and an info page. There are also lots of video likes. What could go wrong?
Well, they may not deliver. You send the amount to the address, and that’s it. Nobody pays you back: it’s advance fee fraud.
Yeah, it’s one of those that make you think: “How could I fall for this?”
- The imposter typically uses a business celebrity or a millionaire
- In crypto, it’s fairly reasonable to double your money overnight
- Videos have many likes and the offer expires when the live stream ends
But these aren’t as common as impostor comments
#2 Imposter Comments
If you visit any respectable channel, you’ll be able to find a response on almost every comment. It’s a profile with the same photo and name as the host, giving the same reply to everyone else:
“Thank you for your comment. For more assistance, message me on [phone number]”
It’s currently the most spread plague on Youtube. Scammers have programmed these bots to comment as soon as a video comes out. And even though they rarely work, someone eventually falls for it.
Needless to say, it’s an identity thief, and nobody can do anything to make them stop. While reporting works, that’s just one account banned out of the dozens of fakes created every day.
Assuming you follow the instructions, you’ll be texting a scammer on some platform such as Whatsapp or Telegram. As for what they do next, that’s up to your imagination: advance-fee scams, money-making schemes, work-from-home, payment fraud, phishing…
If you’re in social media groups instead, scammers will contact you first under the stolen identity.
#3 Phishing & Security
Does the following sound familiar to you?
“Hello, Your [social media platform] account has been suspended for security reasons. If you want to restore your account and prevent future issues, contact us immediately with the following (shortened) link/number.”
A guy creates a mail profile under a name like “[email protected]” They find a generic security response from the actual platform and use it as a template. They add a phishing link and send it to you.
Click the link, enter your details, and they just stole your information.
But there are other versions of it.
For example, you may find on social media a message from an entity like Twitter, Facebook, Instagram, or Bitcoin itself.
“Verify your account on our official page to upgrade your account security. Complete the process and get a $50 reward within 48 hours.”
It’s the same trick to steal information. And while there are many phishing templates, security-related messages are the most effective.
#4 Pump & Dump Groups
Whether pump-and-dumps are scams or not is up to interpretation. Essentially, a trader plans to buy a coin and tells everyone about it. Hopefully, you buy it before the pumper, get your ROI, and get out quickly.
The question is: How do you trust these people with your money?
Just because they say something, that doesn’t mean they’re going to do it. And if they are going to pump, why not buy as early as possible? Why would you tell others to buy, so you buy more expensive?
The following makes more sense:
First, the trader buys the stock. He then convinces large groups of people that he holds millions and is about to buy that one coin.
He creates a pump group on Telegram and schedules the event. Naturally, people try to anticipate and buy it, driving prices up. This creates fear-of-missing-out (FOMO) and heightens the price.
Finally, the trader sells when he sees it convenient. The masses think he pumped it when in reality they did. Since there are more buyers than sellers, there’s gonna be losers.
That doesn’t mean you lose your money. Not if you buy early and time it right. It means there will be more losers than winners.
Which isn’t that bad if the project has real value. Otherwise, it’s no different from pyramid schemes.
#5 Money-Making Schemes
Since we’re on social media, nothing works better than social scams: pyramids in particular. You just need to convince someone to spend money and convince others to do the same.
At the early stages, it’s ridiculously easy to profit, which is why they become so popular. Ironically, that same popularity decreases their effectiveness. If you found the opportunity on an ad or public group, chances are it’s too late to join.
In the best-case scenario, you break even while other affiliates profit from you.
Even if you get in early, there’s a psychological trick. You will “earn” so much that you won’t want to withdraw your money. Eventually, the system collapses, the agency can no longer pay its members, and there’s nothing you can do about it. One day, the whole platform vanishes.
And it all starts with that one guy messaging you on Telegram. Or that Facebook Group invite.
Maybe it wouldn’t be such a risk if you didn’t need to pay to participate.
#6 Support Teams & CEOs
When was the last time a company CEO casually texted you on social media? For someone who makes millions, it doesn’t look like a good use of their time.
It may give the impression that they’re a small team and care about the community. But it all falls down the moment they ask for the unreasonable:
- “We will need your credentials to resolve the issue.”
- “Make a test deposit to the following address.”
Look, CEOs are busy managing the company. And the support team is busy managing support requests at the website. They don’t get paid to text on social media (unless the client requests it).
If they do have media channels, they will let you know this on the description.
If for whatever reason you fall for the trap, you’ll lose your money. You’re just following instructions from a scammer.
#7 Payment Fraud
If you buy and sell online this will happen to you eventually. After you agree on the offer, the other party will want to continue the business on social media.
Escrow services on Escrow.com? Let’s talk on Whatsapp
Freelance offers on Fiverr? Write an email instead
Trading crypto on LocalBitcoins? Let’s do it on Facebook Messenger
You’ll get a cheaper offer outside the platform because you’re no longer paying brokerage fees. However, the platform is no longer responsible for mistakes and payment fraud. You are.
The scammer will likely use Paypal Goods & Services or any refundable method. And you’ll be required to use an unsafe method: crypto, wire transfers, Paypal Friends & Family.
The moment they limit your payment options, you know the offer is too good to be true. That’s the catch. And you can’t report them on the actual platform because you didn’t trade with them there.
Pay the fee and keep it simple.
There’s no use in knowing these scams if you can’t avoid them. With the following clues, you can recognize those schemes, prevent them, and save other people.
Keep in mind: just because someone uses some of these tricks, that doesn’t make them a scammer. One is acceptable, two is suspicious, and more than two is dangerous.
Hidden Social Proof
Scammers want to highlight the positives while hiding the negatives.
Whether it’s social media or a website, you’ll find screenshots of comments and testimonials, even though they may be fake.
What if you want to leave an opinion? You may find that they’ve hidden the number of likes/dislikes, or comments are turned off. If they were good, they would never do that.
So you know something is wrong.
This one is ambiguous. It makes sense with Twitter since you have limited characters (which doesn’t apply to links anymore). Outside that platform, shortened links are an excuse. It says that you don’t want people to know where the link leads.
Also, you can edit the end of these links. You can type anything you want and be more convincing.
You can check where it goes with whereitgoes.com, but if it’s shortened, you already know it can’t be good.
Social Media Assistance
If you have an issue with the company, you first visit the Help page. You scroll down and click on Contact Support. You write an email, call a number, or enter a chat window.
When you finish, you get an email with your conversation, and maybe a customer satisfaction form.
It’s the only method companies use. If you reach out via social media, the most you’ll get is general information. They always redirect you to the site.
Facebook, Twitter, or Telegram isn’t the right place for troubleshooting. Customer support only addresses cases created in their support center.
If you get a support message on Telegram and are unsure, go to the company group. You should find the admin usernames listed in the pinned post.
If the username doesn’t match, you got an impostor.
They private-message first
With all the members in the group, isn’t it strange that their limited staff messages you? They don’t have the time. You must message them first.
Maybe you got a support message: “How may I help you?” Or someone inside the company mentions a money-making opportunity.
- If they text first, it’s suspicious
- Share the text with the admins
- Check their profile and username
If you asked something in a group, maybe you expected this response. As a rule, admins never message in private. They will message you in the group chat and reference their website.
There’s limited time
You never have enough time to think about it.
The coin pumps this evening. The giveaway ends within an hour. The group only accepts members registered today.
When there are time limits for no reason, it’s typically to hide a scam. Scammers limit their exposure so that they don’t stumble with smart people who will report them.
Why would you spend lots of money you can’t refund in a split decision? It looks that the FOMO is greater than the fear of getting scammed.
How to Prevent Crypto Scams on Social Media?
Knowledge is the first step to protect your finances. Know that most companies never manage requests outside their website. They don’t ask for passwords and don’t need a “test deposit.”
- If you get a message from someone who looks like an admin, read the group description. There, you’ll find the moderators’ usernames/phones/emails. If it doesn’t match, block them
- Do NOT make specific questions on a social media group. Scammers will message you in private. If you think you need personal assistance, use the website and the contact data provided there
- Report scammers and mention them in media groups. That’s how you prevent others from getting conned