‘Bank tried to tip me off’: 83-year-old woman loses $50,000 in crypto scam after ‘grandson calls her for bail money’

Lois, an 83-year-old San Francisco Bay Area resident, recently lost $50,000 in a sophisticated cryptocurrency scam after falling victim to a “nephew in need” ruse. Lois, returning home late on a Friday night, received a frantic call from a man claiming to be her grandson, saying he was in trouble. Moments later, another voice, posing as her nephew, tearfully explained that he had been arrested for causing an accident while under the influence. The caller convinced Lois to keep the situation secret and instructed them to pay their bail using Coinstar ATMs, claiming that court protocols now allow payment by digital currency for faster processing.

According to Lois, she was distraught and willing to help her grandson, believing she had no choice but to comply with the appellant’s urgent demands. The scammers led her to several Coinstar ATMs, where she inserted $100 bills as instructed, each $10,000 deposited into what she thought was her nephew’s escrow account. “He told me the court had devised a way for people to pay bail because the checks were taking too long. He said, “We have an account with Coinstar,” she recounted for ABC7 News’ 7 On Your Side team.

Repeated requests for cash with increasingly painful demands

Lois deposited $9,500 in the first round of payouts, following every step of the caller’s instructions. But by the next day, the appellant returned, claiming that additional charges had been filed and that bail had been increased due to the alleged victim suffering a miscarriage in the accident. He was asked to provide an additional $15,000. Desperate and scared, Lois went to the Coinstar ATM again, inserting $100 bills into the machine, not knowing she was being scammed. “It took me over an hour each time and every $10,000, a receipt is printed,” she said. After a total of $25,000 was sent, Lois received a final appeal asking for another $25,000, presumably for attorneys’ fees and additional legal costs.

The heartbreaking situation left Lois feeling cornered, believing she had to keep paying to ensure her grandson’s safety. “What was I supposed to do, just say, ‘Oh, I’m going to drop it?’ I couldn’t do that,” she explained.

Bank warnings and observer intervention

Lois’ bank raised red flags about her withdrawals, concerned about unusually large cash transactions that deviated from her usual spending pattern. When the bank staff asked Lois about her withdrawals, she tried to allay their concerns by claiming that she was buying items at an estate sale that required cash. In addition to the bank alerts, the Coinstar machines also issued prompts advising her to verify her transactions. However, her fear and anxiety for her grandson’s safety prevented her from questioning the process.

It wasn’t until a bystander at the Coinstar machine noticed Lois’ prolonged activity and urged her to double-check the caller’s claims that she considered contacting her nephew directly. It was only then that he texted her and learned that she was safe and unaware of any incident. Realizing she had been scammed, she immediately informed her daughter, Lisa, who joined her in the painful process of reporting the scam and trying to recover the funds.

Recovery challenges in crypto transactions

After realizing the scam, Lisa contacted Coinstar, hoping to trace or recover the funds, but quickly learned the harsh reality of dealing with cryptocurrency. It took several days to reach Coinstar’s support team, only to be told that the funds were likely unrecoverable due to the irreversible nature of cryptocurrency transactions. The support team explained that once funds are moved from a Coinstar machine to a digital wallet, they can be transferred and withdrawn quickly, making recovery almost impossible.

Unlike traditional banking transactions, which can sometimes be reversed, cryptocurrency is decentralized, with transactions verified through complex cryptographic algorithms on a public ledger known as the blockchain. While blockchain technology enables transparency and innovation in financial services, it also presents unique challenges in recovering funds in cases of fraud. According to Coinstar, the scammers’ accounts were closed and they were unable to provide further assistance.

Reflecting on her experience, Lois advised families to establish a “safe word” to use in emergency situations to check the legitimacy of such situations. “That way, if someone calls with an unlikely story, you have a way to verify,” she said, hoping it will prevent others from enduring a similar heartbreak.

Rising tide of crypto scams

The rise in cryptocurrency usage has also increased cryptocurrency scams, with fraudsters using sophisticated tactics to exploit unsuspecting individuals. From impersonation schemes to synthetic identity theft, scammers are using both emerging technologies and stolen personal data to prey on vulnerable people. right Federal Trade Commissionover 500,000 cases of identity theft were reported in the first half of this year, many involving financial scams using cryptocurrency.

The incident highlights the growing risk associated with cryptocurrency payments, especially for those unfamiliar with digital finance. In cases like Lois’s, where her lack of experience with crypto technology contributed to the scam, the fast transfer and anonymity of cryptocurrency make it nearly impossible to recover stolen funds. Authorities urge caution and advise people to verify the identity of any caller asking for money and question any transaction involving unconventional payment methods.