Fraud Prevention

Most victims are contacted via Indeed for a new job where you are asked to buy Bitcoin for your company. If this happened to you, you are likely the target of a scam.

Victims are sent money via e-transfer or cheque for large sums of money to their bank account. They are then asked to withdraw the cash and use it to buy Bitcoin as part of an employment application process. The thieves usually offer a reward of $50-$100 for the victim’s assistance. A few days later the money sent via the e-transfer is linked to a stolen bank account and the transfer is reversed, leaving the victim with a negative balance and no Bitcoin. 

We strongly recommend you report the job as a scam on the platform it was listed on. This will help prevent others from being defrauded.

Overview: 

The scammers will claim to be the CRA and, in an attempt to gain their trust, provide personal information about the target. The scammers will state the target owes a large sum of money in taxes to the CRA.

They will then claim that, should the target fail to immediately pay their taxes through a Bitcoin ATM, they will be sent to jail.The scammers will do everything they can to keep the target on the phone in order to pressure them into making the transaction.

Common Targets of the CRA Phone Call Bitcoin Scam: 

• The elderly 
• Recent immigrants, 
• The young (students with little knowledge of legal systems) 
• Workers who receive payment under the table.

How the Scam Works: 

Once the scammers have convinced their target that they owe money to the government, a QR code will be sent to the target via SMS or email. This QR code is the scammer's Bitcoin wallet address, to which the Bitcoin will be sent. Once the QR code is scanned by the ATM, the target will be told to deposit their cash into the Bitcoin ATM, to convert it to Bitcoins.

After completing the transaction, the Bitcoins will be sent to the scammer's Bitcoin wallet address. Once the Bitcoin have left an ATM, it is impossible to recover the funds. This is because Bitcoin transactions are anonymous, irreversible, and virtually untraceable.

The transaction can be viewed on the blockchain — the decentralized public record of all Bitcoin transactions. However, it is impossible to act on this information alone since transactions are not linked to identities, but to anonymous addresses. 

Prevention? Stay Alert

Scammers who use this Bitcoin ATM scam use emotion and stress to cloud the judgment of their targets. The scammers will do everything in their power to keep the target on the phone, for as long as possible, to ensure they do not try to contact help. By pressuring the target into acting immediately, the scammers often get results quickly, before the police can become involved.

The CRA will never ask for payment in Bitcoin or demand payment through a Bitcoin ATM. Should the caller demand payment in Bitcoins, hang up immediately and contact the authorities. If you are unsure, tell the scammers on the phone you will call them back when you have some time. Do not provide the callers with any personal information. 

Overview

This job/employment scam takes advantage of those who are seeking work. Individuals are offered a job without needing to have an in-person meeting with the employer. The target is then asked to receive money from an unknowingly-compromised bank account.

Following this, they are asked to withdraw cash in order to purchase Bitcoin from a Bitcoin ATM. These Bitcoin are, in turn, sent to the wallet address of the scammer.

Common Targets of Bitcoin ATM Job Scam:

• The elderly 
• Recent immigrants 
• The young (students with little knowledge of legal systems) 
• Workers who receive payment under the table. 

How it Works: 

The scammer will contact a job seeker through email or a phone call to offer them a job. If the job seeker believes that this job offer is legitimate, they will accept their offer and follow the scammer's subsequent instructions, which involve: 

1. Funneling money from a compromised bank account controlled by the scammer, into the target’s bank account; this is done via Interac e-Transfer or with a cheque. 
2. The target will then be instructed to withdraw most of the transferred money, with the difference being the target’s compensation. The target is then requested to use the withdrawn money to buy Bitcoins at a Bitcoin ATM and send the Bitcoin to the scammer's wallet address. 
3. When the compromised bank account holder discovers money missing, they will report it to their local authorities, who will ask the bank to reverse the transaction. After the transaction is reversed, the target will be left at a loss, having already withdrawn the money. 

Prevention? Stay Alert

Most jobs will require a physical presence for an interview. It’s important to be wary of all offers that seem too good to be true: 

• Always be skeptical when being offered a job without needing to attend an interview. 
• Be particularly cautious of any jobs that claim to be ‘remote’ or ‘work-from-home’. 
• Be wary of any job offers made on-the-spot, through an email or a phone call.  
• It is also very important that you never accept money transfers from anyone you do not know. Most certainly, the chances are that the funds are coming from a compromised bank account. 
• A job will also most certainly never involve conducting business out of a personal bank account. 
• Any job that is this easy to obtain, with easy pay, is most likely too good to be true. It is always good to have a healthy dose of skepticism.

Sample Bitcoin ATM Job Scam Email: 

Hello (Target’s Name),

My name is Mark Lantrip. I am the Sr. Human Resources Manager at ConstructConnect Canada, Inc.

("ConstructConnect Canada").

I came across your resume on an online job board (Indeed) and wanted to reach out to you to see if you or someone you know might be interested in a contract opportunity.

We are looking for a Commercial Account Manager Assistant. We are looking for an individual who is proactive, self-motivated, energetic.

What ConstructConnect Canada can offer you:

• Winner of Best Workplaces (Benefits, Perks & Incentives)
• Flexible hours / Casual work environment
• Training Budget
• Competitive Benefits Package
• Awesome new development machines (full accessories & dual monitor)
• Salary for Full time: 40 hours/week (1320 CAD)
• Salary for Part time: 20 hours/week (660 CAD)

Requirements:

• Place of residence Canada
• Organization skills for successful workday planning
• You have customer service and computer skills
• Ability to multi-task, prioritize and manage time effectively
• Knowledge of the PC and basic knowledge of Microsoft Office.

Finding the right job is hard work. It takes time and effort to get to know a company – to be sure it’s the kind of place where you can make an impact, somewhere you want to invest your talent and energy, and do your life’s work. We’d like to save you some of that effort by applying to you, first.

If you’re impactful, ambitious, and passionate about shaping the future of commerce, check out our resume and reply to this email. We will begin your employment.

If you are not interested, please let us know and we will not bother you again.

If you are not currently seeking employment, or if you would prefer I contact you at some later date, please indicate your date of availability so that I may honor your request.

Regards,

Mark Lantrip

Sr. Human Resources Manager

ConstructConnect Canada, Inc.

3760 14th Avenue, 6th Floor

Markham, Ontario L3R 3T7

Tel: 1-800-465-6475

Overview:

The RCMP Phone Call Bitcoin Scam involves convincing the target that they are indeed the RCMP. The scammers will claim to have one of the target’s loved ones in custody. The criminals will explain that the only way for the family/friend to be released is if the target transfers a set amount of Bitcoin to the QR Bitcoin address provided. This scam has also been known to involve not only Canada’s federal police, but can involve scammers purporting to be regional or local police forces as well.

Common Targets of Bitcoin ATM Job Scam:

• The elderly 
• Recent immigrants 
• Younger people (students with little knowledge of legal systems) 
• Workers who receive undisclosed payment

How it Works: 

Scammers use technology to mask their actual phone number: the caller ID will often show a legitimate RCMP phone number. They do so in an attempt to scare their target into paying the “police” (or sometimes a “designated lawyer”) a large sum of Bitcoin in order to have their loved one “freed”: 

1. Once the scammers have convinced their target to pay for the release of said loved one, the scammers will send their Bitcoin wallet address in the form of a QR code. 
2. The QR code will be sent to the target via SMS or email. 
3. When the QR code is scanned by the Bitcoin ATM, the target will be told to deposit their cash into the machine, to convert it to Bitcoins. 
4. Once the Bitcoins have been sent to the QR address the transaction cannot be stopped or reversed. At this point, the scammers will often make additional excuses or reasons as to why the target must send additional funds to the QR address.

Prevention? Stay Alert: 

Absolutely no sector of the police or government requests payment of bail (or similar) in the form of Bitcoin.

If you suspect that the individual with whom you are speaking is not a legitimate police officer, be sure to ask for their name and badge number. Hang up the phone, then contact the police to confirm the validity of the caller’s identity.

In some instances, the scammers will have a very sophisticated network, and may even provide the information of a real police officer.  Under no circumstance should you provide the caller with any personal information. Inform the scammer that you will cooperate with the authorities by providing the requested information, in-person, at a police station.

Romance scammers create fake profiles on dating sites and apps, or contact their targets through popular social media sites like Instagram, Facebook, or Google Hangouts. The scammers strike up a relationship with their targets to build their trust, sometimes talking or chatting several times a day. Then, they make up a story and ask for money. Please stay vigilant while using these apps or Social media websites. 

Recognize These Signs: 

1. The person moves the relationship quickly from initial contact to ''love''.
2. They claim to live nearby but work out of the country.
3. They claim to have a good job but ask for financial help.

Think You Are Facing a Potential Romance Scam?

• Never send money – requesting money is a telltale sign of a scam.
• Never agree to accept and transfer money or goods – this is helping someone to commit fraud and it is illegal.
• Never send intimate photos – these open you to blackmail attempts
• Never share personal or financial information – it can provide access to your personal computer and accounts.

If you are a victim of a scam:

• Stop all contact with the alleged scammer.
• Contact your financial institution to halt any outstanding payments.
• Report the situation to your local detachment with as much information as possible.
• File a complaint with the Canadian Anti-Fraud Centre through their confidential online reporting system or by calling 1-888-495-8501.

An example of a romance Scam : "

One day Georgina received a friend request from a serviceman on peacekeeping duties in Afghanistan. She decided to accept the request and allowed 'Jim' to be her Facebook friend. It didn’t start as a romance but he said he was lonely and looking for friends to keep him company while he was stuck on duty in the middle of nowhere. Soon after befriending her, Jim told Georgina he had lost his wife to cancer and his story of looking after her was similar to her own experience when her husband had died of cancer.

‘He then said he was being posted to Nigeria but his time in the U.S military was nearly finished. He sent me pictures that I now know were stolen from someone on the internet. He kept saying he couldn’t wait for us to be together. We became very close and he emailed me every day saying it was easier for him than using Facebook.’

Jim, who was a scammer, told Georgina he liked gemstones and wanted to set up a jewellery store when he retired. He said this was the best part of being in Nigeria because it was close to where the precious stones were being mined and he could buy them very cheaply.

He told Georgina he was coming to see her but had some trouble with his bank card not working in Nigeria and couldn’t get funds to pay for an export tax on his gemstones. Georgina transferred some money to him to cover the tax which he explained was only two percent of the value of the gemstones but still amounted to $15 000. It was a lot of money to send but she figured he was a good and honest serviceman and if things worked out they would spend the rest of their lives together.

All was going well until his stopover in Malaysia. Customs officials seized the gemstones and demanded payment to have them released. This time they were asking $20 000. I told him it would take some time to get the money and I had to borrow against the family home.’

Georgina sent the money to Malaysian officials but was told Jim was now in jail for smuggling and that she needed to contact his lawyer.

‘The lawyer said he needed to get an Anti-terrorism and Money Laundering certificate and this would be another $10 000. He said he also needed to pay for Jim’s court costs plus his own fees and this would be another $5000.’

Georgina sent the money but then Jim said there was another government official demanding payment to extend his visa while he waited for the court to process all the documents.

‘Almost every day I was contacted with a new demand for money. They sent me certificates signed by officials, forms to fill out and bills for everything. If you wanted to get anything done quickly you had to pay another fee. It seemed to me that the whole Malaysian government was corrupt. I don’t know exactly how much money I sent but it was well over $100 000. I didn’t care about the money. I just wanted to help Jim and I honestly thought he would pay me back.’

Even when Georgina ran out of money the demands didn’t stop. Unsure of what to do, Georgina finally talked to the police. They explained that her experience included the common features of a dating and romance scam and it would be very unlikely she would get her money back. She can’t help feeling in her heart that she let Jim down but she knows in her head it was all a scam".

Yes. You will need the address of the Bitcoin wallet you are sending it to (not your own this time, instead use the wallet of the recipient.)

Important: DO NOT SEND FUNDS TO ANY individual you do not know personally. Localcoin is always doing its best to keep our users as safe as possible. However, all transactions are NON-REFUNDABLE/NON-REVERSIBLE.

Yes! Please email [email protected]. We will blacklist the Bitcoin address(es) associated with your transaction(s) to ensure it can no longer be used throughout our suite of services. Localcoin will also restrict your user access in order to complete an internal investigation. This is to preserve any information required for law enforcement and/or government investigations. A Localcoin agent will contact you within 1-2 business days to collect further information regarding your situation. 

We Recommend You Take the Following Actions as Soon as Possible: 

1. Report the scam to the local authorities. This will require you to fill in a police report. We have provided transaction information below to assist you with that.
2. Report your incident to the Canadian Anti-Fraud Centre (CAFC), see how on their website here.
3. If you gave out your Social Insurance Number, you should report the theft of your SIN by contacting Service Canada at 1-866-274-6627. For more information, see the Social Insurance Number web page.
4. If you sent (non-cryptocurrency) money or shared financial information, report it to the financial institution used (ie. your bank, Western Union, MoneyGram, Equifax and/or TransUnion).
5. If applicable - Notify the gaming site, dating site, job site, or social media site where you first encountered the third party to inform them of a fraudulent member.

Understand How Bitcoin Transactions and Bitcoin ATMs Work: 

Understanding how Bitcoin ATMs, Bitcoin and other cryptocurrencies work will help you understand our role and duty as a company who provides crypto-asset services: 

• Firstly, Bitcoin transactions are completely irreversible and cannot be retrieved once sent.
• Unlike traditional systems (i.e. Visa/Mastercard, payments to merchants, and bank transfers), cryptocurrency transactions cannot be frozen or disputed as the Bitcoin network does not have any central controlling mechanism. 
• You can reference the article "Some things you need to know" for further information on this subject.

At Localcoin, we are constantly taking proactive measures to prevent our customers, and vulnerable targets, from sending their personal funds through Bitcoin ATMs and suite of services. Some of these measures include:

1. Multiple warning signs posted on or around the physical Bitcoin ATMs as well as on touchscreens.
2. Terms & conditions that must be agreed to prior to using Localcoin Bitcoin ATM services. 
3. Warnings on our website, and on our phone support line.

With regards to obtaining a refund, as the transaction was successfully processed and is irreversible, Localcoin cannot retrieve the funds. Localcoin is therefore unable to provide a refund. For further information about our refund policy, please refer to Section 12 of Localcoin's Terms of Service here.

Never make a transaction for someone else, without knowing who they are, or what it is for. You could be unknowingly aiding criminal activity, and opening up yourself to criminal prosecution.

1. Also consider that, if you do not know this person, and you were promised payment, there's no guarantee you'll get paid. And there's nothing you could possibly do about it, if they're anonymous.
2. Localcoin operates a Bitcoin payment service. Like other network providers, Localcoin is not responsible for your actions on the network. 
3. Furthermore, do not send Bitcoin to anyone stating that you owe money to the government. They are scammers. Hang up, and call the police if anyone like this contacts you. 

If you've been the victim of a scam, please visit the Canadian Anti-Fraud Centre. Instructions, specifically, for reporting an incident, can be found on the Are you a victim?

Remember: Bitcoin transactions are irreversible.