Investment scams involving cryptocurrency have resulted in significant financial losses for Houstonians, with victims losing anywhere from $10,000 to $1 million per person. The scams are becoming more sophisticated, employing artificial intelligence and chatbots like ChatGPT to generate relatable and coherent English communication. This makes it difficult for victims to identify the scams as the scammers can make it seem like they are in the United States or use translation tools to communicate effectively.
According to the FBI, investment scams across the United States saw victims lose $3.31 billion last year, a significant increase of 127% from the previous year. Cryptocurrency investment scams alone accounted for $2.57 billion of these losses, representing a staggering 183% increase.
Cindy Quintanilla, a forensic accountant with the FBI, believes that these scams are underreported, indicating that the number of victims and the economic losses may be even higher. She highlights the unique nature of these scams due to the combination of the number of victims, the volume of scams, and the speed at which they occur. Often, victims don’t realize they have been scammed until weeks or months after they have already sent money. The irreversible nature of cryptocurrency transactions makes it imperative for victims to report the fraud as soon as possible.
Scammers employ various methods to recruit victims, such as establishing personal connections on dating websites or through text messages. They exploit vulnerabilities by focusing on individuals’ needs for companionship, financial stability, or other personal desires. Quintanilla emphasizes that scammers thoroughly research their victims on social media platforms to create profiles and identify vulnerabilities to exploit further.
Once a connection is made, scammers may steer the conversation toward cryptocurrency investment opportunities, sharing their own fabricated success stories and promising significant returns for the victim. The FBI highlights that scam victims are not limited to any specific age, gender, or educational background. The scammers behind these schemes are highly sophisticated and spend time ensuring the scams appear legitimate and convincing.
To enhance the credibility of their schemes, scammers often create fake websites that display fraudulent gains to deceive victims. These websites resemble legitimate financial platforms and trick victims into believing that their investments are growing. When the scammers have drained the victim’s finances, they may claim that the money is stuck and request further payments for taxes or customs fees to release it.
Unfortunately, victims often turn to the internet for help in recovering their money, only to fall into the trap of fake companies promising assistance. These victims end up being scammed again, exacerbating their losses. The FBI has noticed a trend of victims becoming hesitant to report the scams, possibly due to embarrassment or distrust.
It is crucial for individuals to remain vigilant and exercise caution while engaging in online investment opportunities. Recognizing the signs of scams, such as high-pressure tactics, guaranteed returns, and requests for immediate payment, can help protect potential victims from falling prey to these fraudulent schemes.
Source: KTRK Houston (ABC 13 News)
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