One of the advantages of Bitcoin is that it gives the user total control of his Bitcoin and only he decides where to send his Bitcoins, without any third party in the middle of the transaction. However, Bitcoin transactions are final and cannot be reversed; because of this, our ATMs have a Scam Warning in our Terms of Service which you must agree with before making a transaction.
Bitcoins sent to a wrong address cannot be recovered since there is no way to refund the transaction. There are some bad people that try to take advantage of this by selling something to people and making them send the Bitcoins before receiving what they purchased, then disappearing with their Bitcoins.
When people make a transaction with Bitcoins, we always recommend that the last thing they must do is to transfer the Bitcoins to the other person; first, you should make sure you receive what you are paying for since it is not possible to get Bitcoins back.
Here are some common scam examples:
Internet classified ads car scam (eBay, Craigslist, etc)
In the eBay Motors scam, cars are posted online (craigslist etc), often at a good discount to their true value. The seller might say they are with eBay Motors, selling the car through eBay Motors or, sometimes, the scammer uses the story of a US serviceman transferred overseas or that the car is from a sick or lost loved one. The victim is then sent to a Bitcoin ATM to put in cash and scan the QR code or enter the address provided by the scammer (this is why we require you to scan your digital wallet at the ATM, not a QR code provided by someone else). Sometimes the victim is also asked to send additional funds for shipping or delivery at that time or once the car hasn’t been delivered. Since all Bitcoin transactions are irreversible, the Bitcoin sent cannot be recovered. Consumers are always encouraged to do their due diligence about the counterparty before buying anything with Bitcoin since all transactions are irreversible. In this case, contacting eBay Motors would reveal the seller is not actually listed and eBay Motors does not accept payments directly in Bitcoin.
Injured or arrested loved one scam
Here, the victim receives a phone call from a scammer pretending to be an officer of the law or an attorney. They are told their loved one (child, grandchild, etc.) has gotten in trouble with the law or has been injured in an accident and money must be sent immediately for medical expenses, bail, attorney fees, etc. In a variation of this scam, someone pretending to be the injured or arrested loved one may speak on the phone for a brief instant asking for help. In this scenario, you are encouraged to check on the welfare of your loved one with someone else who also is in close regular contact with them and might be able to vouch for their whereabouts. The victim is almost always pressed to stay on the phone with the scammer and to not contact anyone else about the matter. A real law officer or legitimate attorney would never pressure a person to send money immediately. These should be the BIGGEST RED FLAGS of all!
Airbnb – Similar to the eBay scam where scammers will ask customers to pay them via bitcoin instead of through the Airbnb site. Airbnb does not currently accept bitcoin and all payments to renters should be made through the official Airbnb payment portal. Always contact the company support line directly if there are ever doubts or concerns.
Recently, it has come to our attention that people are buying Bitcoin and joining “coin clubs.” They deposit the Bitcoin they bought into the coin club with promises of returning more Bitcoin that they contributed. It is currently our belief that this is a form of a “Ponzi scheme” where you are led to believe you can make money for nothing using automated trading strategies or simply getting other people to sign up. We DO NOT recommend buying Bitcoin unless you keep it securely in your own personal wallet. Here is a link on how to get a secure digital.