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New Scam Demanding Bitcoins Threatens Businesses

New Scam Demanding Bitcoins Threatens Businesses
Credit: Roach/Shutterstock

A new scam is threatening to damage small businesses' reputation with the Better Business Bureau.

Earlier this week, security blogger Brian Krebs revealed a new scam that is demanding bitcoins -- virtual online currency -- from small retailers and restaurants. Krebs said at least four businesses have received letters in the mail, labeled "Notice of Extortion," in which they are threatened with negative publicity, vandalism and harassment if the bitcoin ransom isn't paid by a specified date in August.

"The ransom letters, which appear to be custom written for restaurant owners, threaten businesses with negative online reviews, complaints to the Better Business Bureau, harassing telephone calls, telephone denial-of-service attacks, bomb threats, fraudulent delivery orders, vandalism, and even reports of mercury contamination," Krebs wrote on his blog.

Mary E. Power, president and CEO of the Council of Better Business Bureaus, said while it's a bit flattering that the extortionists singled out their organization, the threat, at least in regards to the Better Business Bureau, is completely worthless. She said when complaints are filed against a business, they don't just automatically take the person's word and start imposing penalties.

Power said the first thing the Better Business Bureau does when getting a complaint is share it with the business and verify that it came from a real customer.

"If they are a customer, we help the business and the consumer work it out," Power said in a statement. "If they are not a customer, we don't accept the complaint and it has no bearing at all on the business's BBB rating."

Power said the extortionists also have no way of posting fraudulent negative online reviews on any of the Better Business Bureaus' websites.

"[The] BBB doesn't publish reviews until we have verified the reviewer," Power said. "Businesses should feel assured that these extortionists will not be able to make good on their threats involving BBB complaints or reviews."

Krebs said bitcoins are quickly becoming the ransom payment of choice because they aren't as easily traced as wire transfers are.

"Anonymous virtual currencies like Bitcoin not only make it easier for extortionists to get paid, but they also make it easier and more lucrative for more American blackmailers to get in on the action," Krebs wrote.

Originally published on Business News Daily

Chad Brooks

Chad Brooks is a Chicago-based writer and editor with nearly 20 years in media. A 1998 journalism graduate of Indiana University, Chad began his career with Business News Daily in 2011 as a freelance writer. In 2014, he joined the staff full time as a senior writer. Before Business News Daily, Chad spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including local and state government, crime, the legal system and education. Chad has also worked on the other side of the media industry, promoting small businesses throughout the United States for two years in a public relations role. His first book, How to Start a Home-Based App Development Business, was published in 2014. He lives with his wife and daughter in the Chicago suburbs.