Basic conclusions

  • Acquaintance scams are scams carried out by fraudsters who exploit the trust and friendship of unsuspecting victims for financial gain.

  • Dating scammers typically ask their target victim to (1) lend money, (2) donate to charity, (3) invest in an insurance plan, or (4) join a multi-level marketing scheme.

  • Have you ever been scammed by someone you know? Immediately report the incident to the relevant law enforcement authority. If the fraud involves your Binance account, please file a report by following the steps in this Guide.

True friends give you money back! Learn all about acquaintance fraud and how scammers deceive victims by creating a false sense of trust.

As described in our previous editions of Your Guide to Spotting Scams, gaining the trust of the target victim is a recurring theme in various scams. We generally advise against trusting strangers to avoid scams, but in reality this is sometimes much easier said than done.

What if the scammer is someone you've known or feel like you've known for a long time? You talked to him a lot, shared personal stories, and perhaps even met him face to face. You have come to trust that this person is sincerely thinking about your best interests.

This is a common case of acquaintance fraud. In the eyes of a scammer, gaining someone's trust by getting close to them on a personal level is the way to make a big profit. In this installment of our “Your Guide to Spotting Scams” ​​series, we'll look at the different types of acquaintance scams and how you can recognize them and avoid falling victim to them.

Learn more about cryptocurrency scams in our full series of articles here.

Four types of acquaintance fraud

Acquaintance fraud can occur in many ways. Scammers who take this approach may ask their targeted victims to lend money, make “charitable donations,” invest in “insurance plans,” or join a multi-level marketing scheme. But what they all have in common is that the request for money is preceded by a long period of relationship building that leads victims to trust the scammer as someone they have known for some time.

In the following sections, we provide a summary of how each fraudulent money-stealing tactic works in practice, as well as tips for identifying and avoiding these methods.

1. The borrower

The most common type of acquaintance fraud is borrowing money and not paying it back. Some common excuses that scammers use to scam people include:

  • Covering the costs of a “serious accident” requiring surgery

  • Problems with their bank account

  • Any urgent financial assistance that the borrower claims will be repaid in the future. For example, his car broke down or he needs a new phone as soon as possible.

Once the fraudster receives the money, he either disappears without a trace or asks for another “loan,” making excuses for not being able to repay the first amount.

2. Fraud under the guise of charity

Scammers will pretend to be charities or needy individuals to ask for 'donations'. They often fabricate painful stories to arouse sympathy and manipulate victims into donating money. The stories also often link to a recent disaster in the news — such as a devastating earthquake or wildfire — to exploit victims' increased willingness to help.

3. Fake insurance plans

Another form of acquaintance fraud is fake insurance plans. After befriending the victim, the scammer tricks her into investing money in an attractive insurance plan that he sees as a new “friend” as a bargain. These plans often include claims that they offer high returns or special benefits, but in reality they are designed to steal your money.

4. Multi-level marketing schemes

Multi-level marketing schemes, also known as pyramid schemes, rely on people recruiting each other. Individuals at higher levels of the hierarchy make profits by attracting more people who would normally have to pay a membership fee to join.

Those looking to attract new members to such schemes usually tout the amount of money participants earn in a short time. In fact, multi-level marketing schemes only benefit those at the top of the hierarchy while others struggle to recoup their initial investment. Often, victims end up inviting their friends and relatives — and unknowingly tricking them — into joining the multi-level marketing scheme. Your real acquaintances may also invite you into a multi-level marketing scheme without knowing that it is a scam.

Learn more about cryptocurrency scams in our full series of articles here.

How to identify and avoid acquaintance scams

If you want to avoid becoming a victim of acquaintance fraud, here are a number of warning signs to look for and tips on best practices to follow.

1. Think carefully before lending money

Always evaluate any requests for money carefully. Think about borrowers' reasons and their ability to repay you. Evaluate your financial situation before lending money. If you have already loaned someone money, be especially wary of repeated and excessive requests for more.

Ideally, you should document any loan with a legally binding contract detailing the total amount and repayment plan. This helps protect both parties in the event of disputes. If you decide to lend someone money, only give them an amount you can afford to lose.

2. Donations should only be made to reputable charities

Make sure the charity is legitimate by checking its legal registration before donating. Donating to reputable charities ensures that your money is used responsibly and for its intended purpose. And beware of individuals who ask for donations from you via direct message or social media. It is always best to make your donations through a charity's official channels, such as its website.

3. Avoid questionable insurance plans

Question overly attractive insurance terms or unusually low premiums. You can do a quick check by comparing plans with those of reliable insurance companies in your area. If the terms and premiums are dramatically different, it's best to be careful.

Search for general information about the insurance company and its reputation. Consult other professional financial advisors or insurance brokers if necessary. Before signing any contract, read the terms and conditions carefully.

4. Don't let anyone force you to participate in multi-level marketing schemes

Business models that place too much priority on attracting new members, while neglecting the actual product or service offered, are a serious warning sign. In addition to the promise of high returns, those attracted to these schemes will try to build a strong friendship with you before turning the focus of the conversation to “job opportunities” and how their “companies” change the lives of those dealing with them.

Always do your own research for any job opportunities. Note that recruitment tactics in multi-level marketing schemes will look like a budding friendship, but the ultimate goal is to make a profit from this relationship. Remember, these schemes make money by attracting others. Befriending you is the easiest way to trick you into joining the scheme.

Here's an example of an acquaintance scam

A trader, we'll call him Mark, met a new business partner, we'll call him Jack, in an online community a few months ago. Jack bought cheap items from Mark's store, and always paid him in full. They dealt with each other on many occasions without any problems, and even met in person on some occasions.

After a period of inactivity, Jack suddenly texted Mark. But this time, he wanted to borrow money, not buy like usual. He promised to pay as soon as his friend "gets off work at 17:00".

Mark transferred 500 USDT to Jack without hesitation. But Jack disappeared as soon as he received the money. Mark was puzzled by the situation and could not understand why a “trusted acquaintance” who had never wronged him would suddenly steal his money.

If you have been scammed by someone you know

  • Stay calm and pay attention to those close to you. Don't get carried away by emotions, try to remain rational and attentive. Tell your friends and family — especially any mutual friends with the scammer — so they aren't his next victim.

  • Disable all your accounts. If you provide a scammer with your personal information, immediately freeze your bank and other financial accounts, change your passwords, and take other measures to keep your money safe.

  • Collect evidence. This includes chat logs, loan contracts, payment slips, emails or other communications records. This evidence will help support you when you report the problem to the police or seek legal help.

  • Report it to the police immediately. Provide them with all available evidence and details of the fraud you have suffered. The police will investigate the matter and take appropriate action. Binance works closely with law enforcement authorities, and our cooperation often results in successful detections and seizures.

  • Seek legal help. If your losses are significant or you feel you cannot resolve the issue on your own, consider hiring an attorney. Explain your case and provide relevant evidence to him. Lawyers can provide you with professional legal advice and help you take appropriate legal action.

  • If the fraud involves your Binance account, please file a report by following the steps in: How to Report Fraud on Binance Support.

We also encourage all users, new and old, to read our Anti-Scam Series to better prepare themselves against common cryptocurrency scams.

Disclaimer and Risk Warning: This content is provided to you “as is” for general information and educational purposes only, without any representations or warranties of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any particular product or service. Digital asset prices can be volatile. The value of your investment may increase or decrease, and you may not get back the amount you invested. You are solely responsible for your investment decisions and Binance is not responsible for any losses you may incur. This is not financial advice. For more information, see Terms of Use and Risk Warning