Too Many Scammers

[cshelswell]

I got in to BTC not so long ago and have primarily been working for it. I would then sell some on localbitcoins.com to pay my wages. So today I had 10 I wanted to sell so went on to Localbitcoins.com. In new zealand the normal way to pay people is via bank transfer. It's just how everyone does it. So I sold someone with a good trust rating 5 BTC. Checked my bank and there was the money awesome that's in, I'm happy so release the coins. I wanted to sell 5 more so did the same thing money in the bank coins released. Only to find that 3 hours later I'm getting a nasty call from the bank demanding the money back that had been paid from a hacked account. So all the money gets put back where it came from and I've received no money and lost 10BTC. It's gutting and I think has put me on the edge of giving up with bitcoin. I did a lot of work to earn them but it seems there simple isn't a safe way to sell them. A meeting with cash is the best I can think of.

Not a sob story by any means just a warning to people to be extra careful when selling bitcoins this looked so legitimate and in the end it wasn't. I'm not even sure how you avoid things like this (especially in New Zealand where online bank transfers are the preferred way to transfer money.)

Second part to the story (and I learnt my lesson on this one. Trusting a member (projects) with a great trust rating to post out a KNC Jupiter for 9.5BTC and still no Jupiter and no Projects. So that's the sum total of my BTC .... gone.

Be careful it doesn't seem to matter how legitimate things like it seems in Bitcoin it's often not!

Hope this helps someone else not get scammed or encourages some people to be extra cautious.

[Serge]

that sucks   

in case where someone deals with reversible payment methods, a seller needs to do more verification with unknown parties such as ask for their id scan and making sure money sent through account belonging to that person, speaking over phone, etc. have to be very careful and don't do large amounts in a single time.

[Revelations86]

I also got scammed and lost 4.2 Bitcoins which I purchased a month ago at the higher prices (wiping the majority of my savings   ).   This is why I'm being extra cautious with who I deal with now. I just wish there was a way I can get those 4.2 coins back even if it means earning them in some capacity.

But I agree, this is a HUGE issue for the community and this is one of the major barriers preventing widespread adoption of Bitcoin.  Everyone likes to complain about the big banks and credit cards.  But, the very least, you have FRAUD PROTECTION with credit cards and you can reverse/dispute transactions as well (if you get screwed over by the merchants).  It's a scary thought to think that with Bitcoins, you don't have any of that.

[cshelswell]

yep and trying to explain to the bank what you sold is really quite hard as well. It doesn't really matter what I sold really it's a flaw in the NZ banking system. Once money is in the account here it's supposed to be in your account but seems they can reverse it

[Revelations86]

They can also reverse it and freeze your account here in the US as well if they suspect fraud.

[Meuh6879]

But, the very least, you have FRAUD PROTECTION with credit cards and you can reverse/dispute transactions

Wait ... the member habe been stolen by the "bank wire transfer" and you give good point to the bank fraund protection ?!?
No ... bitcoin is the only (actual) choice to received money (real) with no compromised about chargeback.

When people understand this : it will be a new world.

[Revelations86]

Meuh6879,

I was referring to the fact that he can't reverse the bitcoin transaction and get his bitcoins back due to a fraud.  This is still a problem and despite being optimistic about bitcoin's future, I would still not use bitcoins to purchase anything yet.  With my credit card, I always have the option to dispute a charge, but with bitcoins, I do not and the transaction is irreversible and my sole reliance would be on the merchant's honesty.  If someone steals my credit card and uses it, I am not liable for the charge.  If someone steals your bitcoins (which is what happened to OP and myself), there is no recourse and you are completely screwed.  Overcoming this issue is crucial to mainstream acceptance of bitcoins as means to conduct a transaction. 

[HairyMaclairy]

Were the funds "cleared funds"?  Because if they aren't "cleared" they are not in your bank account. 

[Dabs]

When I get money in my bank accounts, I usually withdraw them or transfer them soon after.

[cshelswell]

Were the funds "cleared funds"?  Because if they aren't "cleared" they are not in your bank account. 

they sure were. Money was in the bank an available. The phone call I had said under no circumstances was I to spend it. I don't think it would have mattered if it'd been in there for 2 weeks. When the other person noticed their account had been hacked they would have had the money off me again. Kind of makes all bank transfers unsafe really.

[CoinDaddy]

This isn't a problem with bitcoin so much as it is a social problem.

Think of BTC like cash, I know not many of you young folks remember cash, but once you give it to someone, it's gone unless you track them down and beat it out of them.  BTC is no different.  Use the SAME techniques for securing BTC transactions as you would for cash - make certain you aren't being robbed.  How many people would you mail cash to without vetting them?

If you could reverse BTC transactions it would just increase scamming.

[byt411]

This isn't a problem with bitcoin so much as it is a social problem.

Think of BTC like cash, I know not many of you young folks remember cash, but once you give it to someone, it's gone unless you track them down and beat it out of them.  BTC is no different.  Use the SAME techniques for securing BTC transactions as you would for cash - make certain you aren't being robbed.  How many people would you mail cash to without vetting them?

If you could reverse BTC transactions it would just increase scamming.

Correct. It is your own responsibility to keep your bitcoins safe, and your own responsibility to avoid scammers. If they could be reversed, then that ruins the whole point. Who decides if they should be reversed or not? Someone? Then it isn't decentralized. I'm sorry, but it's your own fault.

[flipstyle]

I agree.  With the anonymity of bitcoins and alt currencies also comes a great pitfall: fraud and security.

Unlike with credit card transactions, one simply cannot go back and 'dispute' a btc transaction, be it from fraud or being hacked either on the individual or server side.

There is still an overwhelming risk when dealing with digital currencies right now, which I think will prevent them from fully going mainstream and being a 'legitimate' threat to credit card or fiat payments.

You have to remember...with fiat...there is always the risk of having your money stolen.  But there is also not the risk that your money will vanish out of thin air from a hard drive crash or an exchange or mining pool packing up with your money.  Banks are still backed and insured...digital currencies are not.

(p.s.: I've been scammed on this forum twice.  And no longer will I subject myself to being scammed again.  Even if it's for an $8 transaction, always go the extra mile to ensure you're dealing with someone legit, and make them go first if they don't have trusted feedback.

[BitcoinBarrel]

I think the big problem is the Banks and Financial institutions, PayPal included, that reverse transactions caused by unauthorized account access. In reality, the person who was negligent in securing their account or the financial institution that was breached should be liable for the damages caused by the hacker. Or at the very least, a criminal case should be brought up against the perpetrator in question.

In ancient cultures and some European countries today, you would be the legal owner of the Money or coins because you paid/traded for them fair and square whilst the bank and the original account holders were negligent and the scammer committed fraud.

Instead, the OP has to foot the bill. It's a cruel world we live in...