Florida lawmakers target crypto ATM scams

Crypto ATM scams on the rise

A growing number of people- especially seniors- have fallen victim of Crypto scams, and now a new bill is on the agenda, to provide additional safeguards. Fox 13's Kellie Cowan reports what these safeguards mean for people and crypto kiosk owners.

TALLAHASSEE, Fla. - Florida lawmakers are considering new safeguards designed to curb rising crypto ATM scams.

What we know:

Crypto ATM machines currently operate with very little oversight or regulation, and the lack of control has made them a prime tool for scanners. Law enforcement says senior citizens are the majority of the victims. 

According to the FBI, Americans were defrauded of $240 million to crypto ATM scams in the first half of this year.

Scams typically unfold like this: fraudsters convince victims to withdraw cash from their bank accounts and deposit cash into crypto ATMs. Once the money is fed into the machine, it is converted to virtual currency. That digital currency cannot be tracked and is rarely recovered. 

During a hearing in Tallahassee on Tuesday, a Hillsborough County Sheriff's Deputy testified that he worked on cases last year when victims lost a combined $13 million to crypto schemes.

READ MORE: Florida lawmakers present bills proposed by Hillsborough students. 

What they're saying:

Master Deputy Jeffrey Merry with the Hillsborough County Sheriff's Office described several cases involving seniors. 

One involved a man who sent nearly a quarter million dollars to bad actors behind a romance scheme. Another example involved a 73-year-old woman in Sun City Center who was tricked into believing her bank account had been hacked and that she needed to move all of her money in order to protect it.

"She goes across the street to Walgreens and, in one single transaction, took $77,000 dollars, put it into a third-party crypto ATM, and it was immediately gone," says Master Deputy Jeffrey Merry. "Two days later, she realizes that it was a scam. That was her life savings. That is what she was supposed to live off for the next two years. She came into my office crying."

READ MORE: Families outraged after grave covers removed at Tampa cemetery.

BH 505:

BH 505 would require crypto kiosks to display clear warnings explaining the tactics fraudsters use to direct victims to the machines. 

The disclosure must state:

"WARNING: CONSUMER FRAUD OFTEN STARTS WITH CONTACT FROM A STRANGER. IF YOU HAVE BEEN DIRECTED TO THIS MACHINE BY SOMEONE CLAIMING TO BE A GOVERNMENT AGENT, BILL COLLECTOR, LAW ENFORCEMENT OFFICER, OR ANYONE YOU DO NOT KNOW PERSONALLY, STOP THIS TRANSACTION IMMEDIATELY AND CONTACT YOUR FINANCIAL ADVISOR OR LOCAL LAW ENFORCEMENT."

The bill would also cap how much customers can deposit. New customers would be limited to $2,000 dollars per day. Existing customers would be limited to $10,500 dollars in a single day. Lawmakers note that there are currently no transaction limits at all. 

The machines would also have to provide printed receipts with the company's contact information. And in certain situations where theft is reported quickly, the proposal includes a refund process. 

What's next:

The bill has bipartisan support in the House and cleared its first hurdle when it passed unanimously in a House Insurance & Banking subcommittee on Tuesday.