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How to Spot an Online Scam

Learn how scammers use fear to try and get you to do what they want

The best way to recognize an online scam is to understand how they work. Most of them are based on manipulating your emotions or capitalizing on one particular emotion — fear. Scammers are confident that at least some of their targets will be fearful enough to do what they want and, unfortunately, they're often right.

Watch out for messages that relate to one of these four categories:

1. You're Missing Out
Say you get an email stating you've won a fabulous prize and all you need to do to claim it is send money via wire transfer to pay for "processing fees." Or perhaps it says all you need to do is provide your banking information so the awarding entity can deposit your prize money directly into your account. Not wanting to miss out on the prize, you comply. The result? You're out the money you sent them and never see the prize, or your bank account gets emptied instead of a deposit being made.

How to spot: Be suspicious of requests to give something in order to get something from a person you don't know.

2. Something Bad is Happening
The fear of something bad happening is an entirely rational one. But it's still a fear, and one that can make you do irrational things. The scam here could be something like getting a call on the phone from a stranger telling you your computer has a virus, and they can help you eliminate it. They then proceed to take your credit card information, promising to send you a software program in return. But, now your credit card has been charged, or the number has been sold, and there was never anything wrong with your computer to begin with.

How to spot: If you're told by a stranger that something bad is happening, confirm it for yourself. In the above example, if you haven't been having any computer troubles, that's a serious red flag.

3. Someone Is in Trouble
Whether it's someone you know or not, part of human nature is wanting to help people in trouble. That's why the Nigerian email scam has been around for so long and continues to be effective. Here's how it works: You receive a letter from someone you don't know claiming they're a Nigerian prince, princess, or other person with rank who is in trouble and needing to transfer money into an American bank account to get out of it. They ask you to provide your banking information, or they make multiple requests for wire transferred funds to cover legal fees or other expenses.

How to spot: Be very wary of any requests for financial transactions from people you don't know. Also beware of unusual emailed requests that look like they're from friends; always text or call the sender to confirm.

4. You're Not Nice
Like your least favorite aunt, scammers know how to pull a guilt trip on you. In an effort to maintain your view of yourself as a nice, helpful person, you may be tempted to comply with someone who only wants your money. One example is someone claiming to be from your employer's IT support calling to ask for your login credentials; they can be charming and, therefore, convincing. Another example is fake charities that ask for your contribution, often following a big natural disaster.

How to spot: Confirm that any entity making a request from you is legitimate. Never follow a link from email; instead, research the organization or person online. In the case of charities, beware of organizations with names similar to those you might have heard of.

There are other versions of the "fear factor" used by scammers, and once you start to recognize the pattern, you can pretty quickly spot them. Stay alert and avoid becoming a victim.

 

Internet Fraud by the Numbers
According to statistics site Statista, "Internet fraud is responsible for more than $100 billion of private and company losses." Not only that, notes the site, but — based on information from the Scam Tracker by the Better Business Bureau — internet fraud is on the rise, with 12,680 instances filed in 2015, followed by 23,013 in 2016, 45,866 in 2017, and 30,263 as of August 2018.

The FBI reports, based on the 2017 Internet Crime Report issued by the Internet Crime Complaint Center (IC3), that the most common types of crime are nonpayment/nondelivery, personal data breaches, and phishing scams. The same report finds that people over 60 years old are the most likely to be targeted and experience the highest dollar losses. It also notes that people in California, Texas, and Florida experience the highest number of internet-facilitated frauds.

Finally, credit monitoring company Experian reports that of those surveyed by the Identity Theft Resource Center (ITRC), 26 percent had to borrow money, 22 percent took time off from work, and 15.3 percent sold possessions to pay for expenses caused by identity theft.

Sources
https://www.statista.com/chart/15069/number-of-internet-scams-in-the-us/
https://www.fbi.gov/news/stories/2017- internet-crime-report-released-050718
https://www.experian.com/blogs/ask-experian/identity-theft-statistics/#s6

 

How to Protect Yourself from Online Scams

Many online scams are successful because victims are uninformed. Don't let that happen to you. Educate yourself about how scammers operate and methods for defense. The following list is a good place to start.

Be alert. Know that anything you do online has the potential for danger. That includes many actions that seem innocuous, like clicking a link in an email you think was sent from a friend, providing personal information on what looks like a legitimate retailer's site, or offering login details to a friendly person who calls you to talk about a software upgrade.

Trust your gut. If anything looks, sounds, or feels suspicious, take a step back and think before you act. For example, if you get a Facebook invitation from someone you're already friends with, check with them through another channel (such as text message or email) on whether or not it's a legitimate request. If someone calls from a company you've never heard of to "fix" your perfectly functioning computer, hang up.

Ignore random notifications. Flashing notifications saying your computer has a virus and you need to download software immediately to fix it can be alarming. But that's exactly how they're designed. Don't trust pop-ups or other notifications from unknown sources. If you're genuinely concerned there's a problem with your computer, run a virus scan or take it to a professional who can help.

Protect your personal data. Be very wary about any requests for personal information such as your Social Security number, mother's maiden name, or passwords.

Practice cyber-hygiene. Just as you brush your teeth, get a good night's sleep, and exercise to stay healthy, you need to perform certain tasks to ensure your online health is maintained. They include always using strong passwords and keeping them secret, installing and updating security software, backing up content, and not using Wi-Fi in public places for sensitive transactions (such as banking).

Secure your social media. All social media applications have security and privacy settings you can adjust. For example, Facebook asks for your email address and phone number, but it's optional. Sure, it might be a little harder for friends to get in touch with you if you don't provide these items, but remember that anything that makes you more accessible to friends also makes you more accessible to scammers.