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Author Topic: Sophisticated scam on LocalBitcoins. Attention all sellers.  (Read 76 times)
triggeru571
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January 28, 2018, 07:36:17 AM
 #1

This scam can get you in very serious trouble with authorities as well as lead you to a financial loss. I was a victim to this on the 22nd January from trades in Thailand. However the police informed me that this is most likely an international gang running it across multiple countries. Here is how it works.

1) Person A - a scammer calls the victim (Person B) and either sells them something which does not exist or blackmails them.
2) The victim agrees to pay.
3) Person C - another scammer opens a Buy trade with a localbitcoins trader.
4) The Victim (Person B) is given either the traders bank account OR another scammers bank account. Either way, the stolen money is then deposited into the traders bank account.
5) The trader will receive the funds for the opened trade and release the Bitcoin.

The problem is that this is stolen money and there is no way the trader would know about it until it’s too late. In my case, my bank account was seized by the local police as they traced the scam money moving from the victim to my account. In their eyes, I am a suspect (or was).

Be very, very careful as it is a nightmare to prove your innocence. It can be very serious as you are unkowingly laundering money from a scam. I still do not have my bank account released and it will be several weeks before I might get it back as the police need to run their investigation.
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timerland
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January 28, 2018, 08:03:10 AM
 #2

This scam can get you in very serious trouble with authorities as well as lead you to a financial loss. I was a victim to this on the 22nd January from trades in Thailand. However the police informed me that this is most likely an international gang running it across multiple countries. Here is how it works.

1) Person A - a scammer calls the victim (Person B) and either sells them something which does not exist or blackmails them.
2) The victim agrees to pay.
3) Person C - another scammer opens a Buy trade with a localbitcoins trader.
4) The Victim (Person B) is given either the traders bank account OR another scammers bank account. Either way, the stolen money is then deposited into the traders bank account.
5) The trader will receive the funds for the opened trade and release the Bitcoin.

The problem is that this is stolen money and there is no way the trader would know about it until it’s too late. In my case, my bank account was seized by the local police as they traced the scam money moving from the victim to my account. In their eyes, I am a suspect (or was).

Be very, very careful as it is a nightmare to prove your innocence. It can be very serious as you are unkowingly laundering money from a scam. I still do not have my bank account released and it will be several weeks before I might get it back as the police need to run their investigation.

This is why it's risky to take anything but cash deposits at ATMs/tellers. It's not a very new scam, and it's been there for years. Bank transfers are risky because your account will obviously get flagged if the person you were trading with had fraudulent funds.

And you obviously won't know until it's too late in most cases. And you'll have long released the funds. Even if you send back the funds you'll be seen as an accomplice or something like that, and your accounts may still get suspended.

Never trust anyone even on localbitcoins without ID verification and a healthy trade history of at least 10-20. Also make sure that they are transferring from their own account, and make all your ads ID-required. That should have deterred the bulk of them.

sarijaya4444
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February 11, 2018, 08:49:13 AM
 #3

This scam can get you in very serious trouble with authorities as well as lead you to a financial loss. I was a victim to this on the 22nd January from trades in Thailand. However the police informed me that this is most likely an international gang running it across multiple countries. Here is how it works.

1) Person A - a scammer calls the victim (Person B) and either sells them something which does not exist or blackmails them.
2) The victim agrees to pay.
3) Person C - another scammer opens a Buy trade with a localbitcoins trader.
4) The Victim (Person B) is given either the traders bank account OR another scammers bank account. Either way, the stolen money is then deposited into the traders bank account.
5) The trader will receive the funds for the opened trade and release the Bitcoin.

The problem is that this is stolen money and there is no way the trader would know about it until it’s too late. In my case, my bank account was seized by the local police as they traced the scam money moving from the victim to my account. In their eyes, I am a suspect (or was).

Be very, very careful as it is a nightmare to prove your innocence. It can be very serious as you are unkowingly laundering money from a scam. I still do not have my bank account released and it will be several weeks before I might get it back as the police need to run their investigation.

This is why it's risky to take anything but cash deposits at ATMs/tellers. It's not a very new scam, and it's been there for years. Bank transfers are risky because your account will obviously get flagged if the person you were trading with had fraudulent funds.

And you obviously won't know until it's too late in most cases. And you'll have long released the funds. Even if you send back the funds you'll be seen as an accomplice or something like that, and your accounts may still get suspended.

Never trust anyone even on localbitcoins without ID verification and a healthy trade history of at least 10-20. Also make sure that they are transferring from their own account, and make all your ads ID-required. That should have deterred the bulk of them.
NEVER TRUST anyone on PAXFUL either. There are so many scammer offering higher rate for your BTC. STAY AWAY
timerland
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February 11, 2018, 08:59:18 AM
 #4

This scam can get you in very serious trouble with authorities as well as lead you to a financial loss. I was a victim to this on the 22nd January from trades in Thailand. However the police informed me that this is most likely an international gang running it across multiple countries. Here is how it works.

1) Person A - a scammer calls the victim (Person B) and either sells them something which does not exist or blackmails them.
2) The victim agrees to pay.
3) Person C - another scammer opens a Buy trade with a localbitcoins trader.
4) The Victim (Person B) is given either the traders bank account OR another scammers bank account. Either way, the stolen money is then deposited into the traders bank account.
5) The trader will receive the funds for the opened trade and release the Bitcoin.

The problem is that this is stolen money and there is no way the trader would know about it until it’s too late. In my case, my bank account was seized by the local police as they traced the scam money moving from the victim to my account. In their eyes, I am a suspect (or was).

Be very, very careful as it is a nightmare to prove your innocence. It can be very serious as you are unkowingly laundering money from a scam. I still do not have my bank account released and it will be several weeks before I might get it back as the police need to run their investigation.

This is why it's risky to take anything but cash deposits at ATMs/tellers. It's not a very new scam, and it's been there for years. Bank transfers are risky because your account will obviously get flagged if the person you were trading with had fraudulent funds.

And you obviously won't know until it's too late in most cases. And you'll have long released the funds. Even if you send back the funds you'll be seen as an accomplice or something like that, and your accounts may still get suspended.

Never trust anyone even on localbitcoins without ID verification and a healthy trade history of at least 10-20. Also make sure that they are transferring from their own account, and make all your ads ID-required. That should have deterred the bulk of them.
NEVER TRUST anyone on PAXFUL either. There are so many scammer offering higher rate for your BTC. STAY AWAY

Yep. I can attest to that as well.

A lot of man in the middle scammers that are going to basiclaly put you into deep trouble when you're the one doing legit business, or a lot of outright scammers that are trying to chargeback their paypal/credit cards on you.

Once I tried to sell BTC to a guy for some funds, he straight up gave me a stolen credit card number and security code and marked payment complete. He knew that I was serious though so he cancelled at the end, but was reluctant to.

Just be careful even if you're dealing with escrow, escrow doesn't protect you from MITM scammers, and chargebacks.

warningsigns
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February 11, 2018, 10:42:20 AM
 #5

This is the infamous MITM (man in the middle) scam.

The scam's schematic model is:

A - B - C

where:

A = Prey
B = Predator (Scammer)
C = Prey

Scenarios:

A sells bitcoins, B offers to buy and instructs C to pay to A's bank account (with A thinking it's B paying for the coins and C thinking he or she is paying to B's account).

or

B sells something (usually goods on Craigslist, Backpage etc), A responds and agrees to buy, B instructs A to buy bitcoins from a bitcoin trader C. When the scam is discovered, A complains to the police and C is in trouble if it is claimed or alleged that C is an accomplice of B.

Solution:

Do your due diligence. Check and double check and if possible, use Google or social media channels to try to directly contact the person named on the bank account or ID. Use methods such as asking for the original ATM receipt to be held next to the computer or phone screen showing the active trade session, asking the paying party to write a unique reference or descriptor on the ATM receipt such as the coin seller's phone number and a request to call the number.

Strict and short time-specific deadlines for payment to put the scammer under pressure.

Require ID with nominal data matching the bank account used for the payment.

Require bank transfers to include references or transaction descriptors clearly specifying the nature of and reason for the payment.


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