As Crypto Scams Rise, AARP Seeks Consumer Protections

Janice Kincaid describes being defrauded as an out-of-body experience that started when a computer hacker—posing as someone from Apple’s fraud unit—said her financial accounts had been compromised. It ended with her feeding $31,500 in cash into several cryptocurrency ATMs.

“It’s just [like the scammers] took control of my brain,” Kincaid, 69, a retired schoolteacher who lives south of Tampa, says of the 2024 incident. She “never, ever” believed it could happen to her.

Kincaid is not alone. Scammers are trained to get into people’s heads and create a heightened sense of anxiety, thus lowering their defenses, says Françoise Cleveland, a director of government affairs in AARP’s national office who works on crypto issues.

In 2023, more than 150,000 Florida consumers reported cases of fraud, with losses totaling about $655 million, Federal Trade Commission data shows. (Officials say fraud is vastly underreported.)

Increasingly, those losses are happening via crypto ATMs—some are known as Bitcoin ATMs or virtual currency kiosks—that have popped up in gas stations, convenience stores and other businesses. The FTC says that losses through crypto ATMs increased almost tenfold nationally from 2020 to 2023.

During the first half of 2024, losses topped $65 million, with people 60 and older more than three times as likely as younger adults to report a loss.

AARP Florida is working to educate lawmakers about the crypto ATM industry and the need for new regulations and consumer protections, says Karen Murillo, AARP Florida’s associate state director of advocacy.

Legislation introduced in 2024 and supported by AARP Florida would have required businesses with crypto ATMs to register with the state Office of Financial Regulation and inform consumers about the risks that come with the transactions. Additionally, certain entities would have had to be licensed as “money services businesses,” adding a layer of oversight.

The legislation stalled in part because of confusion about how crypto ATMs are currently regulated; they are not subject to the same oversight as traditional bank ATMs, Murillo says.

During this year’s legislative session, AARP Florida is also urging state lawmakers to enact new consumer protections, such as daily transaction limits for crypto ATMs. And the group is working with government and law enforcement agencies to educate consumers about how such kiosks are ripe for scammers.

A ‘bad guy’s dream’

Cryptocurrency is a digital or virtual currency—there are no paper bills or metal coins—that is not sponsored or managed by any government. Faster transactions and privacy are among the reasons crypto is gaining popularity.

The ATMs are one way for people to convert dollars into crypto. Criminals like them because transactions are anonymous and difficult to trace. “It’s a bad guy’s dream,” says Robert Holmes, a detective with the Jacksonville Sheriff’s Office who specializes in cryptocurrency crimes.

Perpetrators move stolen money around “so much, so quick and so often,” Holmes says. Most of the time it can’t be recovered, he adds.

Crypto ATM schemes run the gamut—from romance scams to tech-support impersonators, such as the one that targeted Kincaid.

With AARP’s support, some states are passing laws to curb crypto ATM-related fraud. For example, Vermont has a $1,000 daily cash transaction limit. In Minnesota, new crypto ATM users can get refunds for fraud losses if reported within 14 days, and daily transactions are capped at $2,000 for new customers.

When a warning appeared on Kincaid’s iPad to call Apple’s fraud unit, “I was very vulnerable,” she says. She had just lost her husband—the more tech-savvy person in their household. The “Apple fraud” worker on the other end of the line was actually a criminal who told Kincaid someone had gotten access to her bank accounts from her computer and offered to connect her with her bank. Instead, he transferred her to another scammer, who said someone was withdrawing money to purchase child pornography.

Over the next two days, the scammer kept a hysterical Kincaid on the telephone for hours, convincing her the best way to rectify the situation was to withdraw money from the bank and deposit it into crypto ATMs. The person also told her not to use her phone or her computer, because those had also been compromised.

Kincaid says the “spell was broken” when her neighbor dropped by and she borrowed her phone to call her sister. She went to the police, but the money was gone.

“Luckily, I’m going to be able to survive this,” she says. “I hope it never happens to anyone else.”

Find fraud prevention resources at aarp.org/FLFraud.

Ann Hardie spent a decade covering aging issues for The Atlanta Journal-Constitution. She has written for the Bulletin for 15 years.

Also of interest:

• AARP Fights Back Against Scammers Who Use Crypto ATMs to Steal Millions
• The 5 Worst Mistakes Grandparents Can Make with Money
• How to Avoid Disaster Relief Scams Following Fires, Hurricanes and More