An East Bay woman scammed out of $50,000 got her money back thanks to 7 On Your Side.
After investigative reporter Melanie Woodrow reported on the scam last year, the California Department of Financial Protection & Innovation launched an investigation. Now, Coinme, a crypto kiosk operator, is facing fines totaling hundreds of thousands of dollars and has had to reimburse one local viewer.
"We have some very good news," said Lisa Powell, the scam victim's daughter.
Powell is glowing after her mom, Lois, received a check from Coinme, a crypto kiosk operator.
Last year, Lois got scammed.
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"A man said, 'I have your grandson.' he was so distraught and crying," Lois said at the time.
The caller convinced Lois her grandson was in jail and she could pay his bail, attorney's fees and court costs by feeding $50,000 into a Coinstar machine at a nearby Safeway.
$100 bill after $100 bill, Lois stood at the machine for hours, over the course of more than a day.
"What popped into my mind was kind of 7 On Your Side, those are the people that solve things," Powell said.
ABC7 Investigative Reporter Melanie Woodrow's report on the story caught the attention of John King, an attorney with the Department of Financial Protection and Innovation.
RELATED: 7 On Your Side report on $50K crypto scam catches CA officials' attention
"I saw it personally on the news," said King in an interview last year.
King was familiar with a recently passed crypto asset law.
"One of the key protections in our new crypto asset law is that a crypto kiosk, or crypto ATM, as they're also known, cannot accept or give out more than $1,000 in a single day," said King during last year's interview.
At the time, Coinme told 7 On Your Side Investigates that the scammer exploited Lois by convincing her to deposit funds into more than 50 different accounts, circumventing Coinme's safeguards.
But the author of the legislation, California Senator Monique Limon, said the law does not make exceptions based on how many accounts the customer may use to transact.
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"They were clearly in violation. I just had to keep telling myself that," Powell said.
And that's what DFPI's investigation found: Coinme violated transaction limits and failed to include certain legally required disclosures on customer receipts.
In its first enforcement action, under the Digital Financial Assets Law, the agency fined Coinme $300,000, which included more than $51,000 to be paid in restitution to California residents, like Lois.
"The fact that you guys took interest in it and decided this was something to talk about was a game-changer, and if it hadn't been for the interview, there would be no resolution," Powell said.
Robert Herrell is executive director of the Consumer Federation of California, a major proponent and sponsor of the Digital Financial Assets legislation.
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"It sends a very important signal, Melanie, that breaking this law in California is not acceptable and there will be repercussions," Herrell said.
By email, a DFPI spokesperson tells 7 On Your Side Investigates in part, "DFPI took this recent enforcement action because we do not like to see companies breaking the law and putting consumers' hard-earned money at risk."
And — "Your story about Lois touched us all…"
"Thank you to you and channel 7," Powell said.
"I appreciate it, and I'm just very grateful for everything you did," she said.
Take a look at more stories and videos by 7 On Your Side.
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