According to the FBI’s Internet Crime Complaint Center, the cost of internet scams reached a whopping $10.3 billion in 2022—an alarming number by any measure.
With the increased transition to online services, from shopping and networking to banking and entertainment, the average American’s exposure to financial fraud has multiplied overnight. If you want to remain safe in cyberspace and protect your financial wealth, understanding the prevalent threats and taking necessary precautions is imperative.
Common Online Financial Scams
Here are the top six scams you must guard against during digital interactions.
1. Romance Scams
Dating apps have significantly simplified the process of finding love for many people. However, these platforms have also given rise to deceptive activities targeting innocent hopefuls seeking soulmates.
In many romance scams, fraudsters target victims on dating sites and other online platforms by setting up fake profiles, usually with the help of a stolen or fabricated identity. Once they connect with you, they sweep you off your feet with flattery and charm. Soon after, they start asking for money, often for medical emergencies and other urgent requirements.
2. Fraudulent Investments
Investment scams with get-rich-quick schemes and unusually high returns are in abundance on the internet.
You might encounter them via a shared social media post, online ad, or even an email. Sometimes, scammers may contact you with a direct message on a networking platform. Many of these frauds involve cryptocurrency opportunities. But they may also revolve around other fake investments, from real estate to foreign stock markets.
3. Deceptive Charities
This type of fraud is especially prevalent during times of disasters and tragedies, such as hurricanes and floods that affect large communities. They can also surface during holidays like Thanksgiving and Christmas to take advantage of your generosity and giving spirit.
Scammers can imitate well-known charities and contact you via email or social media. Sometimes, they may pose as individuals in need and appeal for help on networking sites. As seen during the pandemic lockdowns, these types of requests tend to go viral as well, adding false credibility.
4. Travel Scams
Peak travel seasons are a busy time for fraudsters as more people turn to the internet to book accommodation, flights, travel insurance, event and attraction tickets, and tour packages.
Travel scams can target you for financial fraud in a variety of ways. For instance, criminals could hack into a popular airline website and steal your credit card details when you attempt to purchase tickets. They can also get hold of your payment information by directing you to a spoofed website.
5. Shopping Fraud
Fake shopping sites and promotions are some of the most prevalent and successful online financial frauds to date. This is because everyone loves a good bargain. So, offering a hard-to-resist discount or deal is an easy way to lure victims.
You might find fraudulent product and service offers through social media posts, direct messages, ads, and emails. Some of these are designed to steal credit card information so criminals could use them elsewhere to make purchases.
Shady vendors could also send you inferior-quality or fake products. Either way, the result is the same—you end up wasting money pursuing unrealistic deals.
6. Job Scams
Today, many people resort to the internet to find employment. But online job boards and freelancer sites can all harbor malicious actors looking for innocent victims for their financial scams.
How do job scams work? They will usually involve an upfront payment, supposedly to process your application or purchase equipment essential for you to start work.
Essential Steps to Avoid Online Financial Scams
What measures can you take to safeguard yourself from common financial scams on the internet?
• Watch out for unusual behavior
By remaining alert to out-of-the-ordinary behaviors, you can easily identify deceitful actors and ensure your safety.
Let’s take a romance scam as an example. A genuine suitor would take their time to get to know you better. They will respect your privacy, give you enough space, and would be keen to meet up.
But if someone you meet online asks intrusive questions or evades the opportunity to meet you in person, you are likely dealing with a con artist.
• Identify fraudulent communications
Email typos and clumsy websites are typical signs you should take note of. Emails and messages that urge you to click on unverified links are another red flag.
• Avoid hasty action
Many deceptive schemes are designed to induce hasty responses. For example, shopping scams may offer a limited-time discount to prompt you into an impulsive purchasing decision. Similarly, a charity scam could emphasize the urgent need to help those affected by a natural disaster to pressure you into making an immediate donation.
Scammers will also try to manipulate your emotions—from empathy and love to fear and greed—to elicit a quick reaction or response.
So, guarding your emotions and avoiding hasty decisions is crucial for avoiding unnecessary trouble.
• Take your time to authenticate information
To identify financial scam threats, you must spend enough time to validate what you are told.
For instance, if you find an offer, deal, or opportunity that requires a financial commitment, research it first to learn more about it.
Before you communicate or engage with a stranger online, check their social media profile and ensure it has a substantial history and regular activities and interactions. If you can access their contact number, conduct a reverse search using Nuwber to confirm the accuracy of the personal details they have shared with you.
All these may seem a tad intrusive. However, verifications and checks are the only ways to find out you are dealing with a genuine person.
• Never provide money or personal information to strangers you meet online
Be extra vigilant when an online interaction involves a monetary transaction or personal data. As a best practice, never hand over identifiable information or money to anyone without verifying details.
Over the years, the internet has attracted various shady actors, becoming a breeding ground for financial fraud. Romance scams, fraudulent investments, deceptive charities, shopping fraud, and travel and job scams are among the most prevalent schemes to watch. If you spend a substantial amount of time online, take adequate steps to guard against them and protect your financial wealth.