We are long time ProTraders on LocalBitcoins.com and constantly hear about people getting scammed there. The vast majority of those victims are people who don’t know what they are doing (the rest are scammers but that is a different story). We give the same advice over and over so here is a list of things you can do to avoid being scammed on LocalBitcoins when buying bitcoins
Disclaimer: There is no guaranteed way of avoiding scams. Bitcoins are a scammer’s FAVORITE way to get paid for his/her dirty work. Bitcoins are at the top of their criminal list. Even above credit cards and personal information. That makes them a big target. Even the smartest and most vigilant people occasionally get scammed.
If you lose your bitcoin, no one can get them back, If you cannot afford to lose that money, you shouldn’t be buying bitcoins online.
The safest way to buy bitcoins is always face to face transactions with cash in a public place like a Starbucks or Barnes and Noble.
Back to the tips for not getting scammed on LocalBitcoins.com
- The most important tip is DO NOT CHOOSE A SELLER BASED ON PRICE! Pick based on their history. Lets say you want to buy 0.5BTC. A well established seller has a price of $350 a bitcoin and his less reputable competition is charging $320BTC. You will pay the reputable seller $175 or the weaker seller$160 for that .05BTC. It is not worth losing all your money to save $15.
- Make sure you have 2FA (2 factor authentication) enabled on your account BEFORE starting any trade or transferring any bitcoin.
- Always start a trade from clicking on the “BUY BITCOINS” link at the top of the page. If you advertise in the forums many of the responses will be from scammers.
- Do not respond to ads in the forums. Most are spammers or sellers with dubious reputations that cannot get business any other way.
- Read the seller’s profile before starting the trade (click the image to see a larger version)
- Do not start a trade with anyone that has less than 98% positive feedback
- Do not start a trade with anyone that has less than 500 completed trades with at least 50 people
- Do not start a trade with anyone who has an account that is less than 2 years old
- Search the forums on Localbitcoins.com for that seller’s username. See if they have any complaints against them
- Start a trade and send a message stating you wish to trade. Wait for the seller to respond before you send any other information
- No matter what the seller says DO NOT LET THEM TALK YOU INTO TRADING OFF THE WEBSITE. IF ANYONE TRIES REPORT THEM TO THE LBC SUPPORT STAFF IMMEDIATELY.
LBC does have horrible customer service but their automated escrow system is there to protect you.
- Once the seller has responded they are ready to trade, send your payment info through the message box of the trade you started.
Do not send your payment information any other way!
Do not email your payment information
Do not text your payment information
Do not call anyone and give them your payment information over the phone.
- Mark your payment as made. Do not do this until you have sent the payment. If you mark the payment as made before sending your payment or to keep the trade open, the seller will likely block you and leave you negative feedback.
- If you have sent payment information do not cancel the trade.
- Localbitcoins wallet system protects you (as long as you have 2FA turned on). Do not send bitcoins to any other wallet address than the one you own.
- Do not give anyone you are trading with your bitcoin wallet address. If they ask for it they are likely trying to scam you.
Have any other tips for buying Bitcoin without getting scammed? Leave us a comment.