Topic: LocalBitcoins.com: New wave of scams! Steps to protect yourself (digital trades) (Read 487 times)

Not sure its worth to mention here or not, in some countries you still can reverse your bank transactions with the reason of wrong paid and you can't do anything if you are from a country where bitcoin usage is restrcited,so nothing is completely safe but its the better option we have.

This could be the latest wave of scamming method on LBC: https://bitcointalksearch.org/topic/m.52701915

Is the only safe way to receive funds that can't be reversed either a bank wire transfer and cash deposit at bank at end of day etc?

LocalBitcoins is one of the most popular peer-to-peer platforms to buy BTC using PayPal. It is essentially the eBay of Bitcoin, with members being able to exchange BTC directly. Not only will you bypass exchanges, but you will also be operating within a secure environment.
https://cryptocrow.net/how-to-buy-bitcoin-with-paypal/

I received an email and a direct message from two separate users in my referral network that had PayPal payments reversed in the past few weeks. One of the payments was made as a "Goods or Services" payment while the other one was a "Friends or Family" payment.

I'm bumping this thread with the hopes that at least one person will view this thread and save themselves from getting scammed.

It's pretty much the safest you can get.

Some people do put out terms saying that once they show you the receipt, you have to release the funds no matter if the funds only clear the next day or not. They will usually demand you release the payment as soon as the payment hits your account in the case of cash deposit because it is instant, unlike a bank transfer.

I have went with these advertisers, personally never had any issues with them. I only deal with people with at least 1k+ trades in these scenarios.

I don't think that cash deposits are supposed to be reversible, but if you claim that you made a mistake as soon as you deposit, it could definitely happen. Will depend on the bank but these happenings are rarer than paypal chargebacks by a mile. Only risk here is still that you could have a victim of a scam paying to your account, and the scammer is the one that's getting the BTC. Later on, the victim could use your bank accounts to trace you down and think that you're the scammer.

Isn't the safest way just have them deposit cash in your bank account?  Then wait the next day so that way there is no reversals?  Also if you deposit cash into someones bank account and then later on come back and say you made a mistake depositing in wrong bank account, do they still allow that person to get their money back?  I heard that was the scam back then when someone would sell btc for bank deposit at bank of america and the guy who deposited cash into boa would come back with the receipt and said they made mistake.

An year back I got cheated by a scammer in localbitcoins.com, and he took away around 0.6btc. By those days my account was not that secure, once after that analyzed better about the security issues. Later realized the mistake is mine, and encouraged more security to the account. Till date hadn't experienced any issues. While using LBC or any other exchange website we need to be more careful.

Localbitcoins.com can be extremely dangerous at times as well as convenient to use and make payments. I have made some trades on LBC myself but was fortunately never scammed. I never trade on PayPal as I know that the payment over it can be reversed. I tell the trader to directly send the amount to my bank account. I know there are risks involved in it too but comparatively its lesser than PayPal.

This is very good advice. However, in the three incidents where my PayPal payments were reversed, the buyer actually got back to me very quickly. There were no delays with their communication or their payments. Their whole MO was to deal smoothly during the trade, and complete a chargeback at a later time. I will say, however, if you're dealing with someone who delays their payment for any reason, DISPUTE THE TRADE RIGHT AWAY. They have no right accepting the trade and not canceling it if they do not have the means to pay it, nor do they have the right to post an advertisement to purchase Bitcoin if they cannot pay for it. Good advice.

Every time I needed to trade bitcoin for fiat, I am always very anxious not because things went bad the last time I tried but because every means to get an exchange for your bitcoin to fiat are all mostly reversible and the bitcoin no matter how small cannot be reversed. PayPal of all is the extreme because for even with highest of family and friends, it can still be reversible and its not every time the PayPal account is being hacked sometimes, it's a case of MITM (Man-in-the-Middle).

MITM is a case where even after ensuring all of what OP says the scammers still break those protocols. The scammer would have seen someone who wants to gets bitcoin for his PayPal or Bank transfers then reach out to someone who wants to get PayPal for bitcoin so every questions that needs to be asked will just be relayed to the other guy and everything will check out because the other guy wants to deal legitimately.

So, another thing to watch out for after all of the suggestions by OP, is unnecessary delay in response time and by giving ridiculous reasons as to why that is happening. Its better to be safe than being sorry and wished you had taken more time.

Same with in my country. There are bitcoin exchanges but they aren't quick and the ID verification process isn't that desirable to go through either. Thus, localbitcoins is pretty much the primary way I get and sell my bitcoins at least.

And yeah, Paypal and BTC on any platform is just not going to mix well.

It's not just paypal with localbitcoins. It's paypal on any platform, with the seller paying in bitcoins. Since paypal is reversible, and bitcoin isn't, there's a high likelihood something bad's gonna happen.

In the UK if you're in a hurry there aren't many alternatives. There are no exchanges with rapid banking. I'm not sure what the deal is with Coinbase and cards, but if you do a bank transfer to them it has to go to Estonia.

When I used LBC in 2013 it was a lot more casual than it sounds now. I wouldn't have too many issues buying on there. I really don't think I'd ever consider selling no matter what the method other than cash in the post, not deposited in a bank. Scammers will only become more creative and skilled.

I'm finding this whole thread a tad weird. People still do stuff with Paypal and BTC?

I am not belongs to the first world country but I did not find all the traders request for the document to upload and open the trade. I also have noticed that some of the traders always expecting to get the passport details, taxation documentation and require charges for the low amount of the transaction on banking. This is pretty normal every exchange sites.

Even from US or other european country also you can go with LBC. None of the exchange traders will have the high cost than the LBC traders price.

A lot depends from your bank, and your country.

There's no point in using LBC if you're living in the US or the EU. It's cheaper to trade with a normal exchange. And outside of the first world, making an online bank transfer often requires to upload some document to explain what the transfer is. Some banks also send an SMS and require the account owner to write down the code he just received, so that makes it quite difficult to do for a scammer.

I know it's not perfect, but bank transfers are the safest option by far when using LBC.

I won't mind at all, rather it's our duty to warn people.. You are doing the right thing.


The bold sentences from your post matches exactly with my own case as mentioned in my post. But my post maybe not clear enough to understand.
They even show cash image, so that you can fall into the trap like "Oh, this guy has huge cash with him, he will pay me for sure if I release the escrow"... Total BS.
Another thing I forgot to mention that their price is little more than others, in my case the price was about 1.5k+ more.
The interesting part was, when I didn't released the escrow, I became a scammer to him. He was just using slang, calling me scammer etc. Then I had nothing to do except to contact LBC support.

Of course, and that's usually what happens. You see people even on this forum offering to buy aged LBC accounts. In general it's just to access the big network they've taken years to build up... and with LBC never changing their ranges to "level up" on accounts, aged accounts trading mere thousands of dollars already rack up 100s of BTCs to their name. Family and business never work. I've learnt that the hard way.


My "journey" on LBC was simply due to the nature of my situation. I'm often traveling between countries and LBC gives me equal access to local trading in local currency. I guess I've grown to like the nature of p2p and often transact with people I already trust and know there. The price happens to be better overall as a seller, in my experience, especially if I'm just in no hurry to trade and leave open offers that adjust to market rates. It varies but I personally see 2-4% better rates selling over LBC - and because the modes I choose are instant (online bank transfer), I get it immediately.

Best payment is always online as I mentioned above. I'd probably never do a face-to-face (that's another common scam method, even organised robberies in India and BD got a lot of media attention from this) but I know some people who do that often enough for very large amounts they don't want to be traced back to them. As you yourself see though, just so much risk to face-to-face. I'd never, ever recommend it.

There are going to be a ton of risks for the seller.

Your offer can be picked up by anyone. And yes you can sell outside of the US if you've got a US bank account that you want the users to deposit to. I would suggest ticking all the boxes where it says the buyer must be ID verified, or has a trust level of at least 99% or something like that.

Usually, cash deposits are irreversible. At least in my country, I've never seen anyone do this scam and I've been around on LBC for a while doing casual trades. It's a huge generalisation to say that everyone who pay above 5% premium will be a scammer. If you're looking to sell, offer a fair premium like 3-5%, alongside with some filters for trust, and make sure that the payment you're accepting is mostly irreversible then you should be alright. Plenty of people who want the convenience over the rates that are willing to pay 5%+ and are legit as well.

Hi there thanks for the response.  Im also a US citizen but outside the US at the moment.  That is why i ask you this.  I know i could use coinbase/gemini etc but i have issues with verification there.  But would it be possible to use lbc with someone from the US such as they deposit btc into your bank of america or similar us bank account and then you release the btc?  I assume as long as they deposit cash in bank and then you wait next business day, that is safe?


About the market price... so anyone that pays over 5 percent is generally a scammer then right? 


About the friend you have who brings an armed off duty officer.  Im curious but since he does 25k usd+ tranactions, where does he meet the potential buyer?  Im curious like when he puts the cash on the cash machine like where is this.  This is obviously not starbucks etc.  Where do transactions like this take place?  Is it a bank?  Also is almost every time he met someone it was a legit buyer?  How did you meet your private buyer?  And how does he pay you?  Is it in cash in whichever country you are or they deposit cash in your other country bank account?  Also what country are you in now by the way?  Thanks.  About the reversals.  Well if someone deposit cash in your bank account and then end of business day, that cannot be reversed right?

This is quite obvious, but you're absolutely correct. Some scammers have the gift of gab and can easily trap someone into releasing the escrow before the payment has been made. I'm adding this to my original post; hope you don't mind.

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I hope you don't mind; I'm going to add this to my top post, as well. It sounds to me like the account was purchased from the original owner. I've had a few acquaintances that got scammed by account buyers. Without giving too many details, they basically continued operating like the original owner for a few months, and then apparently claimed identity theft. He started conversing with the actual person that the hacker was using as verification for the purchased LBC account and together, they sourced the crime back to a family member who had sold the information to some Indians overseas for 1BTC (at the time, it was worth about $1,000/BTC). Can't even trust your own family...

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You just answered your own question.

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For me, it's because although I'm a U.S. citizen, I live abroad and no longer have a U.S. bank account. And none of the exchanges have options for any of the banks in the country that I'm currently living in. As far as the rates, you'll see some advertisements for trades up to 10% over market value. I've even seen instances of 20% over market value (for small trade amounts). I personally do not deal with anyone that offers more than a 5% rate. My average trade is conducted around a 2.5% premium.


One of my friends deals with $25,000+ transactions on a regular basis from LBC. He has an armed off-duty officer buddy that goes with him every time. He has a cash counting machine and it's very easy to check every bill to see if it's counterfeit or not. Just fan out the stacks of money and draw a big line across the bills.


Banks can reverse charges anytime if you can prove that you didn't authorize the transfer or if you can show that you never received a product or service that warranted the transfer. Every bank has different rules, but reversing bank wires is an option that happens more commonly than people think.


Use your best judgment. The way that I sort the list of buyers on LBC now is by trade volume and feedback score. I could give a shit less if they're buying at market value or at a premium. I have a private buyer that I now work with, so I've really slowed down on my trades on LBC.

What is the primary reason you guys sell btc on localbitcoin as oppose to coinbase/gdax/gemini where they withdraw funds to your bank account?  Is it mainly due to documentation?  Or is it because people pay a premium over market rate?  Can someone tell me how much over the market rate people on average pay on lbc?  So if someone wants to sell 1000 dollars worth of btc, how much do they generally pay in paypal or similar bank transfer?  It is almost always higher than 1000 dollars?


The other thing is this.  If you use lbc, then what is the best payment form?  Is it cash person to person?  Of course if you do that, obviously you dont want to take like even 2k in cash etc in person in public place right?  The other thing is wouldn't you have to check to make sure its not counterfeit and thus use a pen to check every single one?


Thus the best way probably would be meet them at a bank and have them deposit the cash into your bank account or they give you the cash to deposit into bank and then the teller confirms the money is real and gives you receipt?  And to those that have the buyer deposit cash in the bank, do you generally meet them in person or not?  And if you do meet them, do they generally deposit the cash in bank and then they give you the receive?  Or they give you the cash and you deposit it and then get receipt?  Because its certainly possible for the buyer to be at the teller and speak to them and look like hes taking out money and then be done with it but the issue is the receipt wouldnt match.  However if they deposit the cash in your bank account and give you receipt, you just need to log into your online banking on your phone to show the cash has been deposited and then you are good to go right?  The other thing im curious about is generally what amounts do people do this with around?  I assume at least 1k to say 5 figures right?


The other thing is i heard from a while back there was a scam where someone would deposit cash in bank of america and then send the receipt to the seller by phone/email.  Then once that happens, they release the coins as they saw the receipt and could check online banking there was a deposit.  Then the buyer would go back to bank and said they made mistake and withdraw the money.  I read back then that was very easy.  But now this is not possible right?  I also read if you let someone deposit cash into your bank account, you don't send them btc until the end of the banking day or next day since that way they cant reverse it?


I certainly would like to sell bitcoin for cash for a markup.  So what are the best options to do this?  And how much percentage on top are you guys getting?  I assume its at least 2-3 percent right?  Im guessing it could go as high as 10 percent but its probably 2 to 5 percent?