Greg's Corner

Grandparent Scam: One Woman’s $50,000 Loss

By Greg Collier

In Rossmoor, California, an 83-year-old woman found herself the victim of a devastating scam, losing nearly $50,000. It all started with a late-night phone call she believed was from her distraught grandson, setting off a chain of events that would drain her savings. Now, she shares her story to warn others about the dangers of emotional manipulation and the irreversible nature of cryptocurrency transactions.

The woman was at home when her phone rang. On the other end, a man claiming to be her grandson was crying and distressed. He told her he had been arrested after driving the wrong way on a one-way street and hitting another car. He begged her not to tell anyone and to help with his bail. Caught up in the emotion and urgency of the call, she promised to help.

What followed were multiple trips to Coinstar machines at local supermarkets. Coinstar machines, once limited to exchanging loose change for cash or store credit, now also allow customers to purchase various cryptocurrencies. The woman withdrew cash from her bank and fed thousands of dollars into the machines, following instructions from the person on the phone, who guided her through the process of converting the cash into cryptocurrency. Over several days, she was manipulated into sending nearly $50,000.

Scammers rely on emotional manipulation, and this case was no different. The initial call wasn’t enough. Each time the woman thought she had done enough to help, she received another call demanding more money, first for bail, then for additional charges related to the accident, and finally for attorney’s fees and court costs.

At each step, she ignored warnings from well-meaning bank managers, a shopper, and even the Coinstar machine itself, which prompted her to stop if she thought she was being defrauded. The fear of abandoning her grandson and the emotional manipulation kept her going.

It wasn’t until the woman finally texted her actual grandson that the truth hit her. He responded casually, unaware of any accident, and she realized she had been scammed. By then, it was too late. The funds had already been transferred, and because cryptocurrency transactions are virtually irreversible, there was no way to recover the money.

As more scams involve cryptocurrency, it’s important to understand the risks associated with these transactions. Companies like Coinstar have safeguards in place, such as multiple warnings during the transaction process, but once funds are sent, they can’t be retrieved. The irreversible nature of cryptocurrency is one of its defining features, and it’s why extreme caution is necessary when sending money this way.

In situations where a loved one is supposedly in legal trouble, always verify the information through official channels. Rather than acting on the word of the caller, contact the family member directly, or speak with local authorities to confirm the story. If someone claims bail or legal fees must be paid in an unusual manner, like cryptocurrency or through a Coinstar machine, it’s almost certainly a scam. Legitimate legal processes don’t involve such methods of payment.

Being cautious of unknown phone numbers is another key step. If a call comes in from an unfamiliar number, especially one claiming urgency, consider hanging up and calling the loved one directly to verify their safety.

For anyone who finds themselves in a situation where they believe they’ve been contacted by a scammer, it’s crucial to report the incident to authorities, such as the Federal Trade Commission (FTC) or the FBI. Quick reporting can assist in preventing further losses and help authorities track these criminal activities.