Newest Phone Scam: IRS Imposters Convice Victims To Buy Bitcoins

As tax season heats up, phone scammers posing as members of the IRS are fooling people into buying – and then giving them – bitcoins. Don’t fall for it, police urge.

"Beware online scams! We cannot recover lost funds.”
"Beware online scams! We cannot recover lost funds.” Photo Credit: COURTESY:

Soon after bodegas in New York City began installing bitcoin ATMs, thieves launched the phone scam.

The scammers call unwitting victims, tell them that “fraudulent activities” have been detected and that the IRS will cancel their Social Security numbers if they don’t transfer the money using a bitcoin machine, Wayne Police Detective Capt. Laurence W. Martin said Friday.

They also tell the victim to text photos of both the front and back of their driver’s licenses.

Of course, no legitimate agency of any type, public or private, would make such a demand. But some people apparently are falling for it.

At last count, there were at least 130 Bitcon ATMS – otherwise known as BTMs -- in New York City, according to The Gothamist.

The U.S. has nearly 2,400 and there are more than 4,000 BTMs worldwide, Bloomberg reports.

Many are used for money launderers, authorities say.

In the new bitcoin scam, the thieves force their victims to go to one of the bodegas and to stay on the phone while they deposit cold-hard cash into a “digital wallet” through a BTM.

The thieves then "pocket" the digital currency that was just purchased.

Bitcoin began as an investment tool, of sorts, on the dark web. Then businesses began accepting the cryptocurrency as payment. The teller machines followed soon after.

The idea behind the BTM is that people can convert their genuine U.S. currency outside the banking system. 

As such, someone who doesn’t have a bank account could be easily fooled by the scam, Martin said.

It’s the reason why, as the Gothamist noted, many BTMs display a warning on their screens: “Do not allow anyone else to use your account. Beware online scams! We cannot recover lost funds.”

And neither can you if you fall for it.

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