Bait and Switch Scam Definition
The Bait and Switch scam is a fraudulent practice commonly seen in various markets, including the cryptocurrency sphere. The scam involves luring victims in with an appealing offer (“the bait”) and then swapping it for a less favorable one (“the switch”) once they have engaged.
Bait and Switch Scam Key Points
- This scam involves two main steps: the ‘bait,’ where a highly attractive offer is given, and the ‘switch,’ where the original offer is substituted with a less favorable one.
- The scam is common in numerous markets, including cryptocurrency and blockchain.
- These scams are often hard to detect, making them potentially high-risk for participants within these markets.
What is Bait and Switch Scam?
The Bait and Switch scam is a deceitful tactic meant to mislead individuals into thinking they’re getting a good deal, only to be tricked into accepting a less favorable option. In the context of cryptocurrency and blockchain, the scam might be carried out by tempting investors with a lucrative initial coin offering (ICO) that appears promising. Yet, after raising funds, the scammer may fail to deliver the promised project, or substitute it with a less valuable one.
Who Uses Bait and Switch Scam?
Fraudsters within many marketplaces, including cryptocurrency, employ the Bait and Switch scam. They can range from fake ICO promoters who deceive investors, to cryptocurrency exchanges presenting appealing rates then changing them at the last moment. Even reputable companies can get tempted into using this tactic, resulting in considerable reputational damage and possible legal repercussions.
Where is Bait and Switch Scam Used?
Bait and Switch scams can be found anywhere, but they’re most rampant in online marketplaces. In the world of cryptocurrency and blockchain, these scams often occur on digital platforms where tokens are sold or exchanged, such as ICO websites and cryptocurrency exchanges.
When is Bait and Switch Scam Used?
The Bait and Switch scam is often used when a new product or opportunity is introduced to the market. In the context of cryptocurrency, it’s most common during the launch of new ICOs or during significant market fluctuations when scammers can take advantage of people’s desire to invest or trade quickly.
Why is Bait and Switch Scam Used?
The Bait and Switch scam is used primarily to defraud others for financial gains. By presenting an initially appealing offer, scammers can draw victims in and manipulate them into a less favorable deal, often leaving victims at a loss.
How does Bait and Switch Scam Work?
The Bait and Switch scam operates in two stages. First, the ‘bait’: scammers offer something appealing to attract victims. This could be a promising new coin, a special trade rate, or another enticing proposition. Once the victim is hooked, the ‘switch’ happens: the original offer is pulled, and replaced with a less favorable one, usually after the victim has made a financial commitment. The victim is left at a loss, and the scammer profits from the deception.
