Texas Takes Steps to Combat Rising Cryptocurrency Scams and Protect Consumers

In Texas, efforts to combat rising crypto scams have led AARP Texas to advocate for legislative measures like transaction limits on crypto ATMs. Reports showed significant financial losses, especially among older residents. The state’s Financial Crimes Intelligence Center has broadened its investigations to include these scams, which often prey on vulnerable individuals. AARP also emphasizes the need for consumer awareness and stricter regulations in industries like solar energy.

In response to the growing threat of cryptocurrency scams, Texas lawmakers established the Texas Financial Crimes Intelligence Center in 2021. Initially set up to investigate traditional financial fraud, like stolen credit card info and forged checks, the centre has broadened its scope. Now, it zeroes in on the rise of cryptocurrency fraud, particularly schemes involving crypto kiosks, also known as crypto ATMs. Corey Thomas, a criminal intelligence analyst at the centre, points out that many victims are older Texans who are not well-versed in digital currencies. They often invest substantial amounts—ranging from $3,000 to $30,000, and in some cases risking their entire life savings.

AARP Texas is now advocating for legislative measures aimed at bolstering consumer protections in the cryptocurrency space. During this legislative session, the organisation has proposed several fraud-fighting initiatives, including imposing limits on daily transactions at crypto ATMs, similar to regulations already in place in some other states. Additionally, they suggest that kiosk operators should be mandated to display warnings about potential scams, along with being registered in Texas to assist law enforcement in tracking dubious activities.

The push for tighter fraud regulations isn’t limited to cryptocurrency alone. AARP Texas is also addressing several issues in the solar panel industry, given the sharp rise in complaints reported in recent years. Stephanie Mace, an associate director at AARP Texas, mentions that these complaints involve various issues, including predatory sales tactics—like getting customers to commit to lengthy contracts under false pretences about tax credits and savings.

Turning to fraud statistics, 2023 has been a significant year for reported financial losses in Texas, hitting approximately $663.4 million, according to data from the Federal Trade Commission (FTC). However, experts caution that fraud is generally underreported, meaning the actual numbers could be much higher. Additionally, scammers using cryptocurrency kiosks are increasingly common. The FTC noted that consumers lost over $110 million to such scams in 2023, marking a staggering increase from the figure reported in 2020. Notably, adults over 60 are three times more likely to fall victim compared to younger populations.

These scams often involve con artists impersonating government officials, threatening victims with unpaid taxes or fines. Victims are subsequently instructed to deposit funds into a crypto kiosk to resolve these fictitious issues. These kiosks, resembling standard ATMs, can commonly be found in places like gas stations.

AARP has previously supported regulations in other states, such as Vermont, which implemented a $1,000 daily cash limit for crypto transactions, while Minnesota set a cap of $2,000 for new users. Texas is currently collaborating with the AARP to explore implementing similar measures here.

Beyond crypto scams, older adults face other types of fraud, such as romance scams, emphasises Adam Colby, director of the Financial Crimes Center. In an effort to combat growing fraud risks, AARP Texas is promoting community awareness through initiatives like “Texas Shred ’Em Day,” scheduled for Saturday, May 3. This event provides residents a chance to destroy sensitive documents and learn about fraud prevention strategies through presentations by AARP volunteers.

One volunteer, Enedelia Obregón, 67, urges self-advocacy among older adults. Some of her practical advice includes not engaging with unknown callers, steering clear of suspicious emails or links, and remembering that legitimate agencies do not solicit sensitive information over the phone. For those seeking further information on fraud prevention resources, they can call 866-227-7443 or email [email protected].

This multifaceted approach aimed at battling fraud highlights an urgent societal concern, reflecting both the evolving digital landscape and the need for better protections for vulnerable populations.