Millions of businesses and
Web shoppers around the world have been plagued by online fraud and scams for
decades. This started at the time that online payment platforms began to be
widely used and accepted in many countries. Today, Web crimes continue to grow
at an alarming pace.
Merchants continue to create
and test many solutions to significantly reduce if not entirely eliminate
friendly fraud and online payment scams. A solution that has recently gained
widespread popularity among merchants is a digital currency called bitcoins.
- What Are Bitcoins?
Bitcoins are like cash
credits on the Internet. This digital currency was invented to provide a
financial peer to peer system that would benefit both shoppers and merchants.
Bitcoins are now used to purchase products and services from merchants all
around the world, mostly from online shops and Web stores. However, there are
growing numbers of offline point of sale establishments worldwide that already
accept bitcoins. More merchants are adopting this digital currency, in an effort to reduce payment fraud and scams, online or offline.
- What Are the Advantages of Bitcoins for Merchants?
Bitcoin transactions are
considered as cash transactions. This means these transactions are
irreversible. This is an effective solution in eliminating payment fraud and
scams.
Many scammers use stolen
credit cards to buy products online and have them delivered in certain drop-off
safety points. After some time, the merchant shoulders the burden of lost
products and chargebacks filed by legitimate card holders. This is why bitcoins
can significantly help merchants avoid these problems.
However, because these are
irreversible transactions, scammers have also formulated new online fraud and
scams to steal bitcoins. Most of these criminals hang around in popular bitcoin
trading sites, looking to steal account credentials and bitcoins from
unsuspecting sellers. The main method that they use to do this is called
phishing.
- How Phishing is Used for Bitcoin Trading Fraud and Scams
Phishing is the process of
tricking users into giving away their account credentials and personal
information. Fake websites are created for this purpose. Deceptive messages
that entice users to click links are sent via private messaging threads in
these bitcoin trading platforms. These links take users to fake websites.
These scammers target new
bitcoin sellers in these trading platforms, especially those with large numbers
of bitcoins for sale. They pose as legitimate bitcoin buyers. They trick
sellers into clicking these links by telling the unsuspecting seller that they
need to review their trading requirements.
When a user clicks these
links, they are taken to a fake website that looks exactly like the bitcoin
trading platform. This rogue site is also under a domain that is very similar
to the domain of the legitimate bitcoin trading platform.
Many new traders fall for
these online fraud and scams in these bitcoin trading platforms. They
unknowingly enter their credentials into these fake sites, thinking that they
need to do this so as to review the trading requirements of these criminals.
When they do this, their credentials are logged and sent to the scammer.
These scammers log into the
account of the seller using these stolen credentials. They then clean out the
seller's bitcoins by sending these out to their own bitcoin wallets. They do
this while the unsuspecting seller reviews a page with fake content.
These transactions can't be
reversed. Sellers permanently lose their bitcoins, which usually amount to
thousands of dollars. These online fraud and scams are rapidly growing in
number because there are more new sellers in these bitcoins each week.
Share this with your fellow
bitcoin sellers, especially new ones. You'll be able to help them avoid these
bitcoin fraud and scams in their favorite trading platforms.
