Whenever I make presentations on consumer issues, I advise people to be wary of requests for payment with cryptocurrency. Inevitably, the question comes back: “What’s cryptocurrency?”

Cryptocurrency is form of money. But you can’t hold it in your hands like dollar bills, quarters and nickels because it is digital. Likely you’ve heard of the more well-known forms of cryptocurrency, such as Bitcoin, Dogecoin, and Ether. But there actually are hundreds of cryptocurrencies, and more are constantly being created.

Cryptocurrency increasingly is being accepted as a form of payment, but there are many reasons people use cryptocurrency: to make quick payments, to avoid transaction fees that traditional banks charge, or because it offers some anonymity. Some people buy cryptocurrency as an investment, hoping the value goes up.

It can be purchased at a cryptocurrency ATM, online through an exchange or website, or through an app. The cryptocurrency is stored in a digital wallet online, on your computer, or on an external hard drive.

While cryptocurrency theoretically operates much like the U.S. dollar, there are major differences. For example, cryptocurrency accounts are not insured by the government like deposits made at a bank or credit union. Payments made using cryptocurrencies do not come with the same legal protections as when you use your debit or credit card. Also, cryptocurrency payments are typically not reversable, so once you pay with crypto, you can usually only get your money back if the person you sent it to agrees to return it.

It is precisely these factors that make payment by cryptocurrency attractive to scammers. The Federal Trade Commission reports that the number of crypto scams has taken off in recent years. In 2022, Americans lost $1.4 billion to fraud involving crypto. Here are some typical scenarios scammers use.

The most common scam we have heard about from local police departments involves someone who calls and says they represent law enforcement, such as the U.S. marshals, or a government agency such as the IRS or Social Security.

The caller claims there is some sort of legal problem, you owe money, or your accounts have been frozen as part of a criminal investigation. They might tell you that you can protect your money by buying cryptocurrency and transferring it into a different account for protection. Some scammers keep the victim on the phone, walking them through withdrawing money from the bank, purchasing crypto, and transferring it into the scammer’s digital wallet through a cryptocurrency ATM.

There are variations on this scam: Some impersonate well-known companies you do business with or even your bank. They send a message by text or email or call you saying there’s a problem with your account. Sometimes a message pops up on your computer screen saying your computer has a virus. To resolve the problem, they tell you to buy crypto and transfer it to them.

If you receive one of these messages, it is important to verify the information. Call the company or bank using the phone number on your bank card or the phone number you look up, not the number or link provided in the message. Microsoft and Apple will not contact you if there is a problem with your computer. Often, if your shut down your computer, the pop-up message will disappear. If you suspect there is a problem with your computer, make an appointment with a computer repair shop.

Other scams involve investment opportunities. They might pretend to be an “investment manager” promising big returns or guaranteed profits on your investment. Sometimes these scams originate on a dating website, app, or through social media. After the scammer gains your trust, they offer business or investment opportunities. Once the money or cryptocurrency is sent, it will be impossible to get back.

Be wary of anyone who offers unsolicited investment advice. Do your research by searching the company or individual’s name followed by “complaint,” “fraud,” or “scam.” If it sounds to good to be true, it likely is.

Some scammers use crypto in blackmail schemes. They might send emails or a letter saying they have embarrassing or compromising photos, videos, or personal information about you. They threaten to make it public unless you pay them in cryptocurrency. These scams should be reported to law enforcement immediately.

Here are some tips to recognize scams and strategies to keep you and your money safe:

■ Only scammers demand payments in cryptocurrency.

■ Only scammers will make it seem like an emergency. Government agencies and legitimate business will not call, text, or email and ask you for money. Nor will they instruct you to buy cryptocurrency. Government agencies use mail to contact you.

■Don’t associate with someone on an online dating site who invites you to invest in cryptocurrency. If someone on a dating site or social media wants to show you how to invest in crypto, or asks you to send them crypto, that’s a scam.

■ Never click on a link from an unexpected text, email, or social media message, even if it seems to come from a company you know. Verify the information by looking up their phone number yourself and calling them.

■ Never pay a fee to get a job. If someone asks you to pay upfront for a job or says to buy crypto as part of your job, it’s a scam.

■ Only scammers will guarantee profits, big returns, or free money. If you receive a text, email or call with such claims, hang up the phone or delete immediately.

If you believe you have been involved in a cryptocurrency scam, act quickly. Here are some options for steps you can take:

■ Immediately contact the police in the city or town where you live.

■Get in touch with cryptocurrency exchange you used to send the money. For example, if you purchased and transferred Bitcoin using a Bitcoin ATM, contact the company that operates it.

■ Report the incident to the FBI’s Internet Crime Complaint Center, which you can get to by typing ic3.gov into your browser.

■ The Federal Trade Commission also takes fraud reports at ReportFraud.ftc.gov or by phone at 877-382-4357.

Anita Wilson is director of the Northwestern District Attorney’s Office Consumer Protection Unit, which is a Local Consumer Program working in cooperation with the Office of the Massachusetts Attorney General.

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