Consumers Beware – Are Users Realizing Their Surroundings?

Consumers Beware

During 2019 there was an increase in digital crypto crime of 150%, according to a recent report by CipherTrace. Consumers beware! The increase in cryptocurrency crime surged to $4.5 billion. The increase is mostly due to insider theft, along with hacking losses. It’s the lack of transparency in the cryptocurrency market that has challenged regulators and governments to create solutions to fight the malicious insiders that are scamming unsuspecting victims.

Consumers Beware - Are Users Realizing Their Surroundings?

An alleged Ponzi scheme involving crypto wallet and exchange PlusToken was responsible for the loss of around $3 billion scammed directly from customers and users. Consumers beware of these types of scams. Between the Stock market diving, crypto crime, and insider scams, consumers are losing retirement nest-eggs and at the same time missing out on present investment opportunities. Consumers Beware – Are Users and Customers Realizing Their Surroundings? Why do they not realize the danger? Is it pure greed? It seems like consumers are aware of the risks but fail to take protective actions, sometimes even using weak passwords during online activities. According to TheNextWeb.com, one in five users that got hacked at cryptocurrency exchanges were using passwords shorter than eight characters.

Consumers Beware - Are Users Realizing Their Surroundings?
Source:Group-IB

International cybersecurity firm Group-IB has shown that the number of compromised accounts has risen 369 percent since 2017. Consumers beware! A loss of $80 million in cryptocurrency was experienced by at least five of the 19 exchanges. A report generated by Group-IB also reveals that there are currently 50 active botnets that are continuously attacking exchanges and users alike. The botnets are generating 21.5% of their traffic through the Netherlands, and more than 50% through the United States.

Why are Older Adults So Susceptible To Financial Fraud

The average lifespan for Americans in 1950 was 68, compared to 78 now. That has created an older adult population, not just in sheer numbers but they make up a higher perc3entage of the overall population. The older population is wealthier compared to the younger groups.

Nielsen reported that the 50+ population consists of nearly 100 million consumers who are responsible for $230 billion worth of sales in packaged goods, a whopping 49% of total sales. As AARP spokesman Jody Holtzman commented, “You’d have to be an idiot to turn your back on this humongous market.”

Scammers, con-artists, and other perpetrators of financial crime are not only devious but intelligent. Older adults have a higher trust in fellow humans than other age groups. That is part of the reason they are more susceptible to scams. Also, some seniors have no one to leave their assets to when they die so they sometimes have an attitude like; Well, I can’t take it with me when I die, so why not? The lack of interoceptive awareness by older people may be a reason they are targeted so much.

Why Are There So Many Cryptocurrency Scams?

The mainstream use of cryptocurrencies is in its infancy and should be considered a giant leap in financial opportunity and technological progress. There is always an element of danger when venturing into new waters. It’s kind of like when we first starting transversing the open seas, pirates were right behind us to capitalize on the situation of defenseless sailors.

The intention of scammers is to separate people from their hard-earned wealth, and it’s no different in the cryptocurrency world. Due to the widespread hype surrounding cryptocurrencies, they are being used as a lure to fraud many first time investors. Most search engines and social networks are now banning cryptocurrency-related advertising. The sheer number of scams are high because setting up email and other internet crypto scams can be accomplished with a minimum amount of skill or knowledge.

Some Common Cryptocurrency Scams

Fake exchanges and wallets

One note: Always use due diligence and research any financial institution or entity you are considering during business with. Consumers beware!

There are many fake exchanges and wallets on the internet that look like they are legitimate. These fake entities allow you to sign up and deposit funds, traditional currency or cryptocurrency, and then they steal it. They will offer lower pricing and higher returns. That’s always a red flag that should be considered.

Consumers Beware of Phishing attacks

When replying to an email, online ad, or social media ad, always double-check the URL first.

Phishing attacks look like offers that are coming from a trusted entity. Some of these attacks appear to be an email from a company you do business with and when you click the link it sends you to a fake site that asks you for sensitive information for one reason or another. After you enter the information, the perpetrators can use that info to access your real account or initiate a plot to benefit from using your identity. Remember, most, if not all, of the legitimate companies we do business with, do not operate like that. That’s a Red Flag.

“If it doesn’t make sense, it’s not true.”

Judge Judy

Consumers Beware - Are Users Realizing Their Surroundings?
Judge Judy is smiling, but she’s still judging you. 
Photo: Wikimedia Commons

Fraudulent ICOs and scam coins

Many investors are looking for the next Bitcoin and are jumping into the cryptocurrency world. Dozens of new cryptocurrencies launch each month, and alongside these new tokens and coins comes a series of initial coin offerings (ICOs). Since there are lots of investors willing to invest in these legitimate opportunities it seems they would be willing to unknowingly invest fraudulent tokens or ICOs.

With new technologies and innovations there are new terminologies and methods that most are not familiar with. It’s hard to spot a fraudulent scam in the world but there are some general practices that can help keep you safe.

• Get to know the administrators and developers behind the project.

• Always read the complete whitepaper that outlines the technology and methods involved.

• Evaluate the token sale figures as the ICO is ongoing.

• Evaluate the feasibility of the project. Is it too complicated for the landscape? Can it be accomplished by the team involved?

Most of all, always exercise caution. There are many legitimate opportunities out there so don’t be hasty due to FOMO (rear of missing out). The opportunity to realize a large return in a short amount of time can be quite tempting. It is not just the scams you need to look out for, but also the legitimate opportunities that are poorly managed with a lack of proper execution, and not sufficiently funded. The entire project should be evaluated.

Like Judge Judy says, “If it doesn’t make sense, it’s not true.”

What is a Ponzi Scheme

In simple terms a Ponzi scheme is an investment fraud that pays existing investors that were promised unusually high profits with the funds collected from new investors. The organizers of Ponzi schemes promise to invest your money and generate high returns with little or no risk. But in many cases, the fraudsters do not invest the money. Consumers beware of Ponzi Schemes.

What is an Initial Coin Offering (ICO)?

When a company needs money to create a new digital currency or token they will use an ICO as a way to raise funds. Investors can buy into the project and receive the new coin as value of their investment. The company may offer other items or services as value to an investment.

How to Spot a Fraudulent Initial Coin Offering

First off, realize ICOs are speculative investments and always carry a certain degree of risk. Fraudulent ICOs are setup by a company to be a scam from the start. To spot a scam be sure to know who you are dealing with. Get familiar with the entire scope of the project. Are the companies expectations too high? The token sale and the process involved should be 100% transparent. Have a qualified consultant pour over the whitepaper. Consumers beware!

Stay Connected...

Join the other visitors who are receiving our newsletter and learning their way around all things Cyber that may be encountered in their every day lives.

It's time to bring good cyber security practices into our daily lives and where we live.

We hate spam. Your email address will not be sold or shared with anyone else.