Over the past few weeks several Canadian Bitcoiner’s have reported being the victims of etransfer fraud/claw-backs when transacting on locabitcoins.com. This seems to be primarily an issue for those selling their Bitcoin on localbitcoins. Buyer’s of Bitcoin appear to be unaffected by this scam currently.

This is how the scam occurs. A buyer on the platform will advertise a much higher price for buying Bitcoin on his profile then the market rate. This is to attract Bitcoin sellers and victims. When a victim initiates a trade with the Bitcoin buyer they will then send the victim money by etransfer from a email/bank account that does not match the name on the localbitcoins account.

When a victim receives the etransfer money in his bank acocunt, the victim mistakenly assumes that everything is good and they release the Bitcoin to the localbitcoins scammer.

At this point one of two things happens. The first possibility is that the scammer reports the etransfer as fraud to his own bank, and that bank initiates a claw-back of the etransfer. The bank takes the scammers word for it and initiates the claw-back. This pulls “settled” money back out of the victims bank account. In effect this can mean that the victims bank account can go into negative overdraft territory if there are not enough funds in their bank account (as seen in this case).

The second possibility is that there are two or more victims in this scam. There have been two recent and possibly related reports that the accounts used by the scammers, both the bank account and localbitcoin.com accounts, are first compromised by hackers and then used by scammers. They may be using these compromised bank and/or locabitcoin.com accounts as sock puppets to cover their real identities.

So it’s possible there are multiple victims in this chain of scams.

I encourage everyone who is a victim of this scam, or who suspects that their bank account has been compromised to facilitate this scam to contact the Canadian Anti-Fraud Centre and report this to your local police force.

The current known usernames of the localbitcoin scammers include:

robobreck

bittor

hardcore359

After looking briefly at the comments reviewing these profiles, it appears that they have been scamming since August.

I’d like to point out that this scam is being enabled by the banks who unquestionably reverse etransfers for the scammers, after these estransfers have “settled” in the victims bank accounts. Localbitcoins.com may also be complicit in this scam if they do not provide relevant information to the proper authorities.

I would like to call upon localbitcoins.com to initiate their own investigation into these scammers blockchain addresses, IP addresses, login, or any other relevant account behavior and submit this information to the Canadian Anti-Fraud Centre. This would go a long way to restoring confidence in the localbitcoin.com platform.

Links to reports of this scam:

Interac E-Transfer Scam on LocalBitcoins

Got scammed for 460$ is there anything I can do?

My experience getting scammed for $1500 on LocalBitcoins and getting my bank accounts and credit card frozen for it

TIPS

If you have been involved in a cyber incident and provided personal information or financial information, please contact the following organizations as appropriate:

Call your bank. If your bank account or credit cards are involved, you’ll want to report it, and cancel cards, right away to avoid being liable for the losses. Call the police and keep note of the report number for reference. Call Canada’s main credit reporting agencies and put a fraud alert on your credit report: Trans Union Canada (1–866–525–0262, Québec 1–877–713–3393) Equifax Canada (1–866–779–6440) Call Service Canada at 1–800-O-Canada if any of your federally-issued ID was compromised (for example social insurance number or passport). Contact the Canada Revenue Agency. If you believe your Canada Revenue Agency (CRA) user ID or password has been compromised or to disable online access to your information on the CRA login services, contact the CRA. Call your province/territory. If you believe your driver’s licence or health card was compromised, contact your provincial or territorial ministry responsible for transportation or the provincial or territorial government department responsible for health. Call the companies where your identity was used. They will tell you what information they need, whether an investigation has been started and how you can recover the money that was stolen. Contact the Privacy Commissioner of Canada for identity theft issues (PIPEDA) 1–800–282–1376 or www.priv.gc.ca for advice and assistance. (Note: Quebec, British Columbia, and Alberta have separate privacy laws that are similar to PIPEDA, so please contact your Provincial Commissioner.) Call the Canadian Anti-Fraud Centre (CAFC) at 1–888–495–8501 or visit www.antifraudcentre.ca to report any incidents of fraud or cyber-related fraud.

Always take time to record the things you’ve done to report and recover from the incident. A few extra minutes could save you a lot of frustration down the road.