Be careful about cryptocurrency. Protect yourselves. Seek advice from people you already know and trust.

By James Ward

James Ward

Have you already bought some Bitcoin?

Are you getting ready to buy? How much will you buy? Do you know much about it?

There’s a lot of hype and excitement in the news about Bitcoin and the gobs of money that some people are earning or hoping to earn. Is it time for you to try and get in on a piece of the action, too? Could a huge gain from Bitcoin change your life and lifestyle?

I recently had a client who was widowed within the past year. He sold the family home at a price he had never imagined, and then made a huge deposit to pay the entry fee at a very nice Continuing Care Retirement Community.

He had used a chunk of his savings for that, but he still had more savings, and he has enough pension and Social Security income to cover his needs. He’s quite comfortable.

I knew he had some money outside of his trust, but he called to tell me he was taking out an additional $250,000 from his trust. When I asked why he needed to withdraw that much, he told me that it’s his money and he had some plans for it. Very well, it’s true, he can do whatever he wants with it. It’s his money.

Fast forward two months . . . He called again and told me he’s taking more money from his trust. When I asked what he did with the $250,000 he had just taken, he told me he had bought Bitcoin and lost it all in a scam. I asked whether he had contacted the police or FBI to help, and he told me that wasn’t necessary because the people he invested with told him that he’s going to get it all back.

Really? What’s his reasoning for thinking he’ll get it all back? Well, he told me, he has their names and telephone number, and they said he’ll get it back. I tend to believe every scammer has numerous names and telephone numbers, and that’s how they hide in plain sight. Yes, right in open daylight.

I imagine that the promise to give it all back was just a ruse to keep him from putting the authorities on a hot trail while they moved themselves, and his money, to a different country where they couldn’t be found or prosecuted.

Bitcoin? Interesting. Bitcoin for seniors with little to no financial experience or savvy? Very interesting? Bitcoin as a way to scam unsuspecting seniors? Very likely.

Imagine if this gambit had depleted all of his savings and his pension and Social Security income wasn’t enough to pay his monthly bills. Where would he be then?

Every time we see something new come along, we also see new scams and fraud to go along with it. Look at the fraud we’ve seen with Medicare programs, the CARES Act, and now, seemingly, student loan forgiveness.

The student loan forgiveness program isn’t even finally authorized and running, and there’s no application yet, but already there are scammers trying to make money off of families.

The FBI, in trying to protect seniors, reminds people that those older than 60 years of age tend not to be as mathematically sharp as they might have been previously, and those older than 75 come from a generation that was very trusting of others.

Be careful. Protect yourselves. Seek advice from people you already know and trust.