Michigan Attorney General Dana Nessel is warning consumers about a new scam involving Bitcoin ATMs.
The AG’s office said a common Bitcoin ATM scam targeting older adults starts with a fraudulent message or phone call. The call might be from someone claiming to be with Apple, Google, another well-known company, or even law enforcement. The scammer tells the victim that their financial accounts have been compromised. The call recipient is told they need to take immediate action to prevent unauthorized transactions on their account. If the scammer is pretending to be from a law enforcement agency, they might even threaten the victim with criminal prosecution or jail time if the victim doesn’t pay a fine right away.
“Because money sent through Bitcoin ATMs is nearly impossible to recover and these machines lack oversight and regulation, they have become an attractive option for criminals engaged in fraud and money laundering. Staying informed can protect consumers from falling victim,” – Attorney General Dana Nessel
Victims are then instructed to withdraw large amounts of cash from their bank accounts. They are told to deposit the funds into a Bitcoin ATM. The cash is inserted and converted into Bitcoin. The victim is directed to scan and send a receipt or QR code to the scammer. The moment that transaction is completed, the AG’s office said the money is gone — permanently. Traditional bank transfers, wire transfers, or credit card transactions have fraud prevention measures. That is not the case with unregulated Bitcoin ATM transactions.
Without regulation, the attorney general said victims of Bitcoin ATM scams have no meaningful consumer protections. Financial institutions have fraud prevention departments that monitor transactions. Banks can file suspicious activity reports (SARs) to investigate potential fraud. Unfortunately, Bitcoin ATMs operate outside these safeguards. They allow scammers to steal money quickly and anonymously.
To avoid becoming a victim of a Bitcoin ATM scam, the AG’s office said to remember these key points:
- No legitimate company or government agency will ever ask you to deposit money into a Bitcoin ATM. If someone makes such a request, it’s a scam.
- Beware of urgent requests. Scammers create a sense of urgency to prevent victims from thinking critically about the request.
- Do not trust caller ID. Fraudsters can spoof phone numbers to make it appear as though they are calling from a trusted source.
- Never download unknown software or grant remote access to your devices. This can allow scammers to take control of your personal information.
- Talk to your bank before making large withdrawals. If you’re instructed to move money in an unusual way, seek advice first.
- If you believe you have been targeted by a scam, report it immediately. Scams can be reported to the Michigan Attorney General’s Consumer Protection Team and local law enforcement.
