New Bitcoin Scam Sweeps Instagram

The latest major cryptocurrency scam seems to be targeting Instagram users after reports have surfaced discussing how ‘high-end’ brands are being used to manipulate users into parting with their Bitcoin. These reports seem to stem from Sweden, where Swedish Law Enforcement officers have issued warnings to stop more Instagram users being scammed in the future. According to Forbes:

“Products from high-end brands like Gucci, Louis Vuitton, as well as consumer electronics like Apple, have recently been advertised for spot prices between 50 and 300 Euros primarily to the general public in Sweden. In order to finalise the purchase, individuals are being tricked into exchanging fiat currency to cryptocurrency. Once such currency a transfer has been completed, the Instagram seller vanishes with the money, and the luxury products are never delivered to the buyer. This has persisted, even though cases are being reported to the law enforcement authorities.”

The premise of this scam is that Instagram users are being tricked into buying very low price products from major retail brands, these products of course do not exist. In order to buy the products, the users are told that they need to swap FIAT currency for cryptocurrency, at this point, the scammer takes their crypto (possibly through a fake brokerage) and runs off with the money. It seems that this is being targeted at young people using Instagram and that the majority of those affected so far are under 25 years of age.

Why do scams hit social media?

We quite often see cryptocurrency and Bitcoin scams exist within the realm of social media. Namely Twitter, which has recently become a bit of a hub for Ethereum based scams and giveaways. Social media is a boiling pot for scammers, with the option to remain anonymous and access to a direct means of contact with (often) vulnerable people, it’s very easy for scammers to send out large scale messages to users of social media. It’s an attack on the law of averages since the scammers are able to just send mindless volumes of scam messages out, in the hope that just one of two people will actually fall victim to the scam.

In essence, social media provides the perfect platform for cryptocurrency scams, scammers are able to hide away and see some successes, all at the expense of those that in all honesty, don’t really know what they are doing online.

Strategic Analyst at the Financial Intelligence Unit of the Swedish Police, Magnus Karlsson has issued a warning to anyone who wants to purchase products online, especially those using platforms such as Instagram that are clearly not designed for eCommerce. Karlsson reiterates the importance of shoppers doing research before they buy the products in order to ensure legitimacy. Simply put, if the price of the product you are buying is way off the recommended retail price, then it’s probably a scam, or a counterfeit product at the very least (which can also inadvertently land you in a lot of trouble).

Likewise, a spokesperson from a local cryptocurrency brokerage has commented on these recent reports, stating:

“As our customer service engages way quicker with the users than the Police - our employees flag suspicious accounts or wanted to engage with Instagram customer service via their support email. Unfortunate as the customer service of Instagram is literally non-existent, it increases the delays to take countermeasure. Furthermore, as the law enforcement agencies have to process thousands of cases, there is a significant delay between the day when the fraudulent case is reported and when the police will spot the suspicious pattern in the fraudulent transactions.”

Moreover:

“We would like to do more but that’s not possible because Instagram is just not very responsive as they don’t have a dedicated email address for their fraud department and claim that they have done enough for users to flag the fraudulent advertisements in their app as spam; what unaware users only rarely do otherwise they might not be scammed in the first place.”

For now, Instagram have suspended accounts that have been associated with these scams, though there are measures you can take for yourself in order to ensure you do not fall victim to this. Indeed, it does seem to be localised to Sweden, but there’s no reason these scams can’t become more wide reaching.

If you do decide to purchase products through Instagram, make sure you speak to the seller in advance, find out why they want to sell it, especially if the price seems very low. If the seller suggests they want a fast sale (hence the low price) then be suspicious, why do they want to lose a huge amount of potential profit in order to achieve a fast scale?

If all seems safe, you should always ask for more pictures of the product to ensure that the seller actually has it and that indeed, they intend to send it to you. Be wary and make sure these pictures are legitimate, as Forbes suggests:

“Scammers tend to reuse pictures which are on publicly available profiles. Using free ‘reverse image search’, other websites which display this particular picture might be of help to identify if this image has been used for someone else. As scammers claim that the displayed image reflects the actual pictures of the offered product. Finding the same item on the internet on multiple accounts not related to the seller should trigger increased suspicion.”

Importantly, don’t pay for these products with cryptocurrency, use a FIAT money transfer service that can protect you in the case that you don’t receive the product you have paid for. The reason many of these scammers are able to get away with these scams is simply because they are encouraging buyers to use Bitcoin, making transactions hard to trace and leaving their hard earned cash at the hands of scammers. Always be safe when buying online and don’t let this happen to you.