‘The bank tried to warn me’: 83-year-old loses $50,000 to crypto fraud after ‘grandson asks her for bail’

Lois, an 83-year-old resident of the San Francisco Bay Area, recently lost $50,000 in a sophisticated cryptocurrency scam after falling victim to a “grandson in trouble” scheme. Lois, arriving home late on Friday evening, received a frantic phone call from a man claiming to have her grandson, stating that he was in trouble. Moments later, another voice, posing as her grandson, tearfully explained that he had been arrested for causing an accident while intoxicated. The caller convinced Lois to keep the situation secret and instructed her to pay his bail using Coinstar cryptocurrency ATMs, claiming that court protocols now allowed payment via digital currency for faster processing.

According to Lois, she was distressed and willing to help her grandson, believing she had no choice but to comply with the caller’s urgent requests. The scammers led her to multiple Coinstar ATMs, where she inserted $100 bills as instructed, with each $10,000 deposited into what she thought was her grandson’s escrow account. “He told me the court had come up with a way for people to post bail because checks take too long. He said, ‘We have an account with Coinstar,'” she told ABC7 News’ 7 On Your Side team.

Repeated requests for cash with increasingly disturbing claims

Lois put down $9,500 in her first round of payments, following every step of the caller’s instructions. But the next day the caller was back claiming additional charges had been filed and the bail had been increased because the alleged victim had suffered a miscarriage as a result of the accident. She was asked to provide another $15,000. Desperate and scared, Lois went to the Coinstar ATM again and fed $100 bills into the machine, unaware that she was being tricked. “It took me over an hour each time, and a receipt is printed for every $10,000,” she said. After a total of $25,000 was sent, Lois received a final phone call demanding another $25,000, allegedly for attorney fees and additional court costs.

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

Bank warnings and bystander intervention

Lois’ bank issued warnings about her withdrawals because she was concerned about the unusually high cash transactions, which deviated from her normal spending habits. When bank staff asked Lois about her withdrawals, she tried to allay their concerns by claiming that she was purchasing items at an estate sale that required cash. In addition to bank alerts, Coinstar machines also provided prompts advising her to verify her transactions. Still, her fear and anxiety about her grandson’s safety kept her from questioning the process.

It was only when a passerby at the Coinstar machine noticed Lois’s prolonged activity and urged her to double-check the caller’s claims that she considered contacting her grandson directly. It was only then that she texted him and found out that he was safe and unaware of any incident. Realizing she had been deceived, she immediately notified her daughter Lisa, who accompanied her in the painful process of reporting the scam and trying to get the money back.

Recovery challenges in crypto transactions

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

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

Reflecting on her experiences, Lois advised families to establish a “safe word” that could be used in emergency situations to verify the legitimacy of such situations. “This way, if someone calls with an unlikely story, you can check it out,” she said, hoping to prevent others from experiencing the same heartbreak.

Growing wave of crypto fraud

The increase in cryptocurrency use has also led to an increase in crypto-related scams, with fraudsters using sophisticated tactics to exploit unsuspecting individuals. From impersonation to synthetic identity theft, scammers are using both emerging technologies and stolen personal data to prey on vulnerable individuals. According to the Federal Trade Commission, more than 500,000 cases of identity theft were reported in the first half of this year, many of which involve 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’, where her lack of experience with crypto technology contributed to the scam, the rapid transfer and anonymity of cryptocurrency make it nearly impossible to recover stolen funds. Authorities urge caution and advise individuals to verify the identity of any caller requesting money and to question any transaction involving unconventional payment methods.