Tips on How To Spot Online Scams

It seems like every day we hear about a new online scam we need to be aware of to prevent it from happening to ourselves or our loved ones. These cons are becoming more difficult to detect as the scammers must constantly evolve their approach to present new swindles that haven’t been publicized. There are no bounds these criminals will not cross, so we all need to be extra vigilant in detecting them to avoid falling victim to one. But how do you detect a scam when everything seems right? We can help with Tips on How to Spot Online Scams.

The Work of a Scammer

Just recently, MSN wrote an article on a scam that required the perpetrators to impersonate a lawyer. The sheer extent to which this person (or more likely persons) went to to appear authentic is astounding. This culprit wrote letters on a known law firm’s letterhead telling his potential victims that they were eligible for an inheritance worth millions of dollars.

Now, most people immediately become suspicious of a letter like this and would further investigate the claim. In anticipation, the scammer created a fake website, phone number, and email address emulating the real law firm’s information. They left nothing to chance; the website and URL were similar to the real law firms and phone numbers established ahead of time.

Eventually, the real law firm removed the fake website through the registrar, however there’s little they could do about the phone number and email address. According to the FBI, these types of scams have resulted in more than $92 million in losses as of 2018. It only takes a few people to fall victim to these scams for the scammer to consider the scam a success.

If you’ve read the article, you’re most likely taken aback by the audacity of these people. We wanted to cover this topic for our readers as part of our continuing series and thought we should cover the basics again. (You may also want to check out our blog on Protecting Your Digital Identity)

How To Spot Online Scams and the most Common Types

Something to understand, scammers lose nothing by trying. Even if only one out of hundreds of attempts brings results, it could net them thousands, if not tens of thousands of dollars. The same network of criminals could run multiple scams, which by design come in different variations. The FBI maintains a list of common fraud schemes containing 24 distinct types of scams and it’s a great resource to familiarize yourself with.

We’ve isolated a few of the known to outline, but sadly this is not an exhaustive list. To start, the first step in how to spot online scams involves understanding the predictable strategies. Characteristically, they follow comparable methods, so once you understand the basics it becomes easier to see those trends being used in contrasting ways. These common types of scams include:

• Advance Fee Schemes
• Internet Auction Fraud
• Nigerian Letter Fraud
• Telemarketing Fraud
• Ponzi and Pyramid Schemes

Advance Fee Schemes

An advance fee scheme is the swindle that the fake lawyer tried in the above scenario. They use an enticing offer to get their victims to pay either a deposit or fee to receive a larger return. In the article, the offenders used the guise of an inheritance, but it could vary with “found money” or lottery proceeds the winner can’t claim and will sell the ticket.

Internet Auction Fraud

Internet auctions can be a great way to bid and receive products at a great price, but they also allow access to a huge number of people, which makes this a scamming favorite. It starts by the perpetrator(s) creating a fake auction at a low price to entice buyers. Once the buyer contacts them about the auction, they request payment outside of the auction site to avoid the site’s fraud protection. After they receive payment, they never send the product or send a product that does not fit the description of the auction.

Nigerian Letter Fraud

This scam is so routine that it would be strange if anyone having an email account hasn’t seen one, or a variation, at some point. These scammers take the appearance of government officials with the promise to a percentage of an enormous fortune if you help them move that money out of their country, commonly Nigeria, but the pretext can be with any country. They require you to send personal information such as your name, address and banking information, then provide initial funds to cover the fees for moving that money with the promise they’ll repay you once they have access.

Telemarketing Fraud

Telemarketing fraud, even with the evolution of technology, is still as old as the form of communication itself. It is what it is titled: fraudulent selling over the telephone (or cellphone in today’s form) and is one of the most pervasive forms of fraud. It originates with a high-pressure caller wanting to sell or offer you a deal, donate to a worthy-sounding charity, or trying to get personal information. As everyday as this scam is, the easiest and most effective way to combat it? Hang up the phone! You do not need a person to sell or donate in the 21^st century. Go directly to the company or charity website you want to do business with or call them directly and speak to an employee.

Ponzi and Pyramid Schemes

Ponzi and pyramid schemes work similarly of the Nigerian scams; uncharacteristically high returns for an initial investment. The key difference is a pyramid scheme pays you a percentage of each person you recruit, while a ponzi scheme uses dividends paid by other victims to pay you for a brief time to build your trust in their ruse. However, both ploys always end up with the bulk of people losing money. The leaders of these plans typically flee once they fail, leaving victims with no way of recovering any money invested. Remember, a promise of high returns with low risk is never a good equation.

If it Seems too Good to be True, it Probably is

When you’re trying to navigate your way through the wide variety of scams, just remember that one golden rule: if it sounds too good to be true, it probably is. Con artists rely on their victims being blindly enticed by an offer to research what’s actually happening. So, if you’re presented with what seems like an “opportunity of a lifetime,” do your due diligence to make sure the offer is real.

If you have any doubts about the proposal or authenticity of the person, walk away, hang up, or just ignore the bait. Reach out to company corporate offices, most have antifraud policies and can help you determine the validity of the offer in question. They don’t want to be associated with a scam or may not even know about it.

Final Thoughts

We hope that you’ve found the information in this Tips On How To Spot Online Scams blog useful and can apply it should a scammer ever approach you. As always, if you don’t see something here you want us to cover, reach out to us through our Contact page or leave a comment below. Stay safe and informed! All the best ~ Glen.