Know Your Scam: Red Flags to Spot an Imposter Scam

Main Takeaways

• Imposter scams involve criminals posing as trusted organizations' employees, often as law enforcement officers or lawyers. 

• Police or other law enforcement officers will never contact you directly to threaten arrest, solicit money, or promise to keep your crypto funds safe.

• If you’ve fallen victim to an imposter scam, it’s crucial you immediately report the incident to relevant local authorities. 

Imposter scammers can weave elaborate webs of lies. Don’t get trapped! Protect yourself from scams by learning how to identify, avoid, and report imposters posing as employees of trusted organizations. Stay informed with this week's edition of Know Your Scam.

Perpetrators of imposter scams pose as employees of trusted organizations, such as banks, law firms, or government departments, to trick people into sharing their personal information and parting with their money. 

These criminals rely on an assortment of false narratives and social engineering tactics and may craft convincing scripts by piggybacking on current events. They might contact you via phone call, text, or email to pull off the scam. Some will go as far as to set up a fraudulent customer support phone line to appear more legitimate.

Below, we’ve outlined how typical imposter scams play out and provided two real-life examples to help users understand the dynamics of the interaction between scammers and their victims. 

A Four-Step Process

1. Develop a script

Users who have read our previous articles on employment and fake investment scams may notice that the four-step process that underpins a typical imposter scam is slightly different from the previous two.

In imposter scams, developing a foolproof, adaptable script that dynamically responds to different scenarios and is tailored to specific groups of people is key – after all, the perpetrator is posing as a figure of authority and has to give off an air of professionalism. 

Although building a strong script may require immense effort, criminals are often willing to do the work that can significantly increase their chances of success.

2. Find 

Scammers typically use the black market to acquire a variety of personal data, including phone numbers, identity credentials, shopping, and travel history  –  anything that they can sift through to identify potential targets. Notably, criminals prefer to target people who have already fallen prey to a scam. This way, they can disguise themselves as “righteous” police officers, lawyers, or detectives eager to help. 

3. Gain trust and induce

Once the scammer has identified a target, they’ll select a suitable script to rehearse and deploy. If the victim does not respond as expected, the scammer will improvise. They may try to pressure the victim by scolding or intimidating them. 

At this stage, scammers have one goal: to gain the victim’s trust. They are persistent, even if the victim initially does not play along.

4. Close

If the fraudster is successful, the victim will buy into a false narrative and believe they are in a “dire situation” or must “make amends for their past crimes” by paying a penalty. 

In some cases, the scam persists even after the victim has paid the “fine.” Another imposter may enter the picture and keep the hoax going until the victim is bankrupt. 

To illustrate how this works in practice, we’ve described two real-life cases below. 

Examples in Action

Example 1: The police are after you

The victim, who we’ll call David, finds himself in hot water when the “police" claim he was spreading false information about COVID-19. The “authorities” request that David file a written note explaining his actions, and he agrees. His case is then transferred to “Detective Zhang,” a scammer posing as a police officer.

Zhang suddenly claims that David is a suspect in a case investigating a high-profile, secret crypto money-laundering scheme, noting that a Bank of China card with David’s name was reportedly found among the belongings of an apprehended criminal.

David is then interrogated for a grueling five hours over video calls. The “law enforcement” demands that David maintain full confidentiality about the case, with no phone calls, internet searches, or communication with anyone about the matter.

David yields to their demands, providing the scammers with daily reports of his whereabouts and activities for seven days. In the end, David – who was threatened into sharing the details of his wallets and bank accounts – finds himself defrauded of a staggering 1.2 million USD.

Imposter scams like this one are quite common these days. It's essential to be vigilant and verify the authenticity of any communication from purported authorities.

Example 2: A helpful stranger

The victim, who we’ll call Lucy, is recovering from the aftermath of a crypto investment scam. She stumbles upon a supposed "lawyer" on social media who promises to help her retrieve the stolen money for a fee of 2,000 USDT. 

Convinced by repeated assurances, Lucy caves in and borrows money from her friends to pay the “lawyer.” The scammer doesn’t bother to keep up the facade and vanishes with the money immediately.

How to Protect Yourself From Imposter Scams

Beware of self-appointed “government employees”

Remember that government employees, especially law enforcement, will never call you directly to threaten arrest, solicit money, or promise to keep your funds safe in their crypto wallets. If you suspect that the person claiming to be a government representative is an imposter, try contacting the police through official channels to verify the authenticity of that person’s claims.

Protect your private information

Fraudsters can use your travel records, purchase history, and personal contact details for identity theft and other illicit activities. To minimize your risk exposure, make sure to safeguard your personal data.

If You’ve Been Scammed

Scammers may try to defraud you again, so it’s important to avoid any new withdrawals or transfers upon strangers’ requests. There’s a high probability that subsequent requests come from another scammer trying to take advantage of your situation. 

If you’ve fallen victim to an imposter scam, it’s crucial you immediately report the incident to relevant local authorities.

If your Binance account is compromised, please get in touch with our support team by following the steps outlined in our FAQ guide: How to Report Scams on Binance Support. 

For more information on how to identify and avoid scams, read other articles in our anti-scam series, where we offer information that could help you safeguard your funds.

Further Reading

• (Blog) Know Your Scam: A Definitive Guide to Crypto's Most Prevalent Scams

• (Blog) Know Your Scam: Fake Crypto Investments to Watch Out For

• (Blog) Know Your Scam: Job Scams to Watch Out For | Binance Blog

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