Check Scams and Money Fraud

• Suit alleges Athena Bitcoin charged hidden fees of up to 26% on scam deposits

• Nearly all BTM transactions in D.C. tied to fraud, with victims’ median age 71

• Officials say Athena ignored red flags and refused to refund elderly victims

District of Columbia Attorney General Brian L. Schwalb has filed suit against Athena Bitcoin, Inc., one of the nation’s largest operators of cryptocurrency ATMs, accusing the company of profiting from scams that have cost elderly residents tens of thousands of dollars. The lawsuit, announced Tuesday, alleges Athena imposed steep, undisclosed fees while failing to put in place safeguards against fraud.

Athena operates seven bitcoin ATMs, known as BTMs, in the District. The machines allow customers to purchase cryptocurrency with cash, but investigators say scammers often direct victims to send those funds straight to fraudsters’ digital wallets.

Data reveals staggering fraud rates

An investigation by Schwalb’s office found that during Athena’s first five months in D.C., 93% of all deposits were linked to scams and nearly half were flagged as fraudulent by victims themselves. The median victim was 71 years old and lost $8,000 per scam transaction. In one case, a resident lost $98,000 across 19 deposits in just a few days.

“Athena’s bitcoin machines have become a tool for criminals intent on exploiting elderly and vulnerable District residents,” Schwalb said. “Athena knows that its machines are being used primarily by scammers yet chooses to look the other way so that it can continue to pocket sizable hidden transaction fees.”

Hidden fees and no refunds

According to the complaint, Athena charged users fees as high as 26% without disclosing them — far above the typical 0.24% to 3% charged by mainstream exchanges. The company also allegedly refused to refund victims, even when notified of fraud, and required those seeking partial refunds to sign liability waivers freeing Athena from future claims.

Athena’s approach, investigators said, effectively left elderly and vulnerable residents defenseless against international fraud schemes.

Seeking restitution and penalties

The lawsuit charges Athena with violating the District’s Consumer Protection Procedures Act and the Abuse, Neglect, and Financial Exploitation of Vulnerable Adults and the Elderly Act. Schwalb’s office is seeking restitution for victims, civil penalties, and reforms to bring the company into compliance with District law.

The case is being handled by Assistant Attorneys General Anabel Butler and Jason Jones, Investigator Lu Lagravinese, and Civil Rights and Elder Justice Section Chief Alicia M. Lendon.

How seniors can spot common crypto scams

• Urgent demands for payment — Scammers often pose as government agents, utility companies, or tech support and pressure victims to “pay immediately” using bitcoin ATMs.

• Instructions to deposit at a BTM — Any request to buy cryptocurrency at an ATM and send it to a stranger’s digital wallet is a red flag.

• Unfamiliar contacts — Calls, emails, or texts from unknown numbers directing you to transfer money are almost always fraudulent.

• Too-good-to-be-true offers — Promises of guaranteed returns, sweepstakes winnings, or quick profits in crypto are a common hook.

• Refusal to provide details — Scammers discourage victims from speaking with family, banks, or law enforcement.

Inflation, housing affordability, dangerous products, the breakout of artificial intelligence, and of course, the proliferation of scams – these are topics that ConsumerAffairs covered in 2023 that resonated most with our readers.

To select the top stories of the year, we looked at how many views each story got the week it was published, as well as how many times it was accessed in subsequent weeks. As the year draws to a close, here are the 10 most-read ConsumerAffairs news articles of 2023.

Are you still in the middle class?

After inflation soared to 9% at one point in 2022, many families were wondering where they stood economically. To find out, ConsumerAffairs updated the data in the Pew Research Center’s inflation calculator to determine the minimum annual income needed in each state to be included in the middle class.

We found it varied widely, from $82,630 in Hawaii to $59,197 in West Virginia. Read more.

If a thief steals your iPhone they can steal a lot more

Apple’s iPhone has always had a rock-solid reputation for enhanced privacy but early in the year, researchers discovered there could be big problems if the device were stolen.

These thefts usually occur in a public place, like a crowded bar. If you pull out your phone and the thief sees you punch in your passcode, they might grab your phone and run. Within just a few seconds the thief can change the passcode, preventing the victim from accessing their account.

Then the trouble really starts. Read more.

AI used in terrifying fake kidnapping scam

The year began with ChatGPT, developed by Open AI, creating a sensation. It was the first widely-used AI platform that could be used by anyone to write computer code or a sonnet. 

Predictably, AI was quickly harnessed by criminals to run all types of dangerous scams. In April we reported how AI could clone anyone’s voice by obtaining just a few seconds from social media videos. 

That made the fake kidnapping scam even more dangerous. Read more.

Wronged Bank of America customers to receive $100 million

Bank of America has millions of customers and many of them, it turns out, were subjected to unfair fees. It got the attention of federal regulators who in July, ordered the bank to pay $100 million in compensation.

One of the 36,002 complaints lodged with the regulator said that the bank charged them interest on a $0.00 balance and told them that they had to have several months of a zero balance before interest wouldn’t accrue. 

Needless to say, this story gained a lot of attention among ConsumerAffairs reader who made the article one of our most popular during the summer and into the fall. Read more.

Did Southwest Airlines sell flights it knew it couldn’t fly?

The year began in the aftermath of Southwest Airlines’ holiday week meltdown that stranded thousands of Christmas and New Year’s travelers. Before the end of January the U.S. Transportation Department opened an investigation into what happened and why.

Airline employees pointed a finger at the company’s computer system, which they claimed was outdated. But investigators also wondered if the airline sold a lot more tickets than it had available seats.

In December, the government levied a record $140 million fine against the airline. Read more.

Thinking of moving to a cheaper state?

The housing market was the source of a lot of consumer pain in 2023. As mortgage rates doubled from pandemic lows, millions of Americans found they couldn’t afford to buy a home – unless they moved to a cheaper state.

Our article about a ConsumerAffairs study of the cheapest states to buy a home got a lot of attention last year. 

ConsumerAffairs researchers determined that North Dakota has the lowest cost of living in the U.S., followed by West Virginia and Michigan. In fact, the lowest-cost states are clustered in the Midwest and Appalachian Southeast with the lowest home prices in West Virginia. Read more.

More possible links between medication and dementia

Throughout the year our readers showed a lot of interest in stories having to do with cognitive decline and the slow progress toward finding effective treatments. When we reported possible links between dementia and acid reflux medications, it was the most-read story of the week.

When we followed it up with a story about possible dementia links to other medications there was even more interest. 

To be sure, the evidence of these links is far from conclusive, but researchers think the two classes that could have the strongest link to a risk of dementia are anticholinergics and benzodiazepines. Read more.

Ford leads in the number of recalled vehicles in the first half of 2023

It’s been a rough year for Ford. Besides losing billions of dollars on electric vehicles, a special ConsumerAffairs report in July found that it had the most recalls and most recalled vehicles in the first six months of 2023.

In terms of the number of vehicles recalled Ford topped the list with a total of 4.1 million cars, light trucks and vans. Most of those – nearly 1.3 million -- were for servicing brakes and hydraulic systems, followed by miscellaneous equipment issues ( l million) and backover prevention (807,000).

Industry sources reported there were 245 auto industry recalls from January through June -- up 3.4% from the same period a year earlier. Read more.

Watch out for the new Barbie scam

The summer’s blockbuster movie “Barbie” had the whole world talking about the iconic Mattel doll, brought to life on the silver screen. It didn’t take scammers long to try and exploit it.

In late July the ConsumerAffairs-Trend Micro Threat Alert found plenty of schemes around the movie. Jon Clay, vice president of Threat Intelligence at Trend Micro, warned readers to stay alert, saying Barbie was appearing in several Walmart-related scams. Read more.

Are you an Xfinity customer? Then look out for this scam

The Xfinity scam was among one of the most enduring scams ConsumerAffairs covered in 2023. We first reported it in April after hearing about Xfinity customers who were contacted by phone and offered a fake discount.

They were told they would get a 50% discount if they committed to keep the service for another two years but would have to pay the first year in advance – using Target gift cards.

The scammers only appeared to target Xfinity customers, suggesting they have access to Xfinity’s subscriber list. Read more.

The Federal Trade Commission (FTC) says scammers have become so enthralled with the results of using cryptocurrency as a way to get people’s money that it now accounts for one in every four dollars lost. The agency recently found that the median amount that someone’s been tricked out of using Bitcoin, Tether, and Ether is $2,600.

For many, the world of cryptocurrency is probably an enigma. The reason many scammers are drawn to it is that there is no bank or centralized authority to flag a suspicious transaction and stop it from being completed. Unlike a credit card charge, cryptocurrency transfers can not be reversed. 

Many scammers are doubling down by piggybacking their ruse on social media. The FTC says nearly 50% of people who lost cryptocurrency to a scammer since 2021 were tricked by a simple post, ad, or message on a social media platform

Most of the losses that people reported from social media were investment scams. The agency said $575 million of cryptocurrency scam losses were about bogus investment opportunities since 2021. That's far more than any other fraud type. 

“The stories people share about these scams describe a perfect storm: false promises of easy money paired with people’s limited crypto understanding and experience. Investment scammers claim they can quickly and easily get huge returns for investors. But those crypto 'investments' go straight to a scammer’s wallet,” the agency wrote in its report. 

“People report that investment websites and apps let them track the growth of their crypto, but it’s all fake. Some people report making a small ‘test’ withdrawal – just enough to convince them it’s safe to go all in. When they really try to cash out, they’re told to send more crypto for (fake) fees, and they don’t get any of their money back.”

Spotting cryptocurrency scams

What are the telltale signs of a cryptocurrency scam? Perhaps one of the most common is a message or pop-up that supposedly comes from a major company or government agency that claims there’s a problem or security breach on a person’s account. They might ask for personal information or suggest transferring money into a cryptocurrency account, but it's all a ruse that's meant to defraud the victim.

Here are some other things that the FTC says consumers should keep in mind:

• Beware of offers that seem too good to be true. Know that only scammers guarantee big payouts or fast, easy money. These lies get you to “invest," but you won’t get any of your money back.

• Don’t mix online dating and investment advice. If a new online love interest wants to show you how to invest in cryptocurrencies, it’s likely a scam.

• Spot the scammers asking you to send cryptocurrency. Real companies and government agencies will never tell you to buy cryptocurrency to sort out a problem or protect your money.  

For help spotting cryptocurrency scams, the FTC suggests that consumers check out more of its findings and advice here.