A Maryland man scammed out of $4,400 when he tried to buy a car using bitcoin got his money back from the owner of the bitcoin ATM he used.
Vietnam veteran Jerome Harrell said he found a 1955 Chevrolet like the one that had been his first car online for an affordable $3,000. The seller told him she got the car in a divorce settlement, which was why she was selling it at a bargain.
She told him the car would be delivered from West Virginia after he paid using Google Wallet, a service that allows payments to be made digitally.
Then he got what looked to him like an official invoice that instructed him to pay using a bitcoin ATM, a machine that allows the exchange of cash and bitcoins, the uninsured digital currency created and exchanged anonymously and independent of banks or governments.
“Never heard it before or anything, but we went on the computer and looked at it and it says it's in Wal-mart, so I figured it had to be legit,” Harrell said.
He sent a total of $4,400 to the seller and was told the car would arrive in three days, but it didn't come. He emailed the seller, but she didn’t reply.
Google Wallet told him they don’t use bitcoin and confirmed he’d been scammed.
Bitexpress, which owns the bitcoin ATM Harrell used, contacted NBC4 Responds after hearing his story.
Bitexpress machines can now freeze transactions of first-time users and call them to ensure they are not victims of scams, the company said, but that update went into effect after Harrell's transaction.
But the company said it wanted to make things right with Harrell and refunded him the $4,400. He put the money back in his life insurance.
To prevent becoming a victim of such a scam, here are four things to know:
- Be wary of any "too good to be true" deals.
- Make sure you know with whom you are dealing. If the seller only wants to communicate through email, that's a big red flag.
- Scrutinize every message you receive. Scammers work hard to make their emails look official. The one Harrell received had the Google Wallet logo and even came from an email address that looked legitimate at first glance.
- Finally, when making large purchases online, think twice about using bitcoin. Treat the digital currency as cash.