Online Scams Surging: Here’s How to Identify and Avoid Them
Financial fraud can be traced all the way back to 300 B.C. A Greek shipping merchant attempted to scam an insurance provider. He planned to do this by sinking his empty boat which he had used as collateral. Since then, fraud, online scams, and cons have become much more sophisticated. As a result, these crimes have been on the rise.
We now spend so much of our time online. Therefore, it’s perhaps no surprise that the internet has become the number one breeding ground for scammers. Online banking, eCommerce, social media, and even online dating provide a plethora of opportunities for fraudsters looking to prey on unwitting victims.
In fact, according to the FBI’s Internet Crime Complaint Center (IC3), 2020 was a record year for both victims of internet crime and financial losses in the United States. The IC3 received 791,790 complaints in that calendar year, totaling $4.2 billion in losses. And that’s just in the U.S.
It’s also important to note that online scams have become even more prevalent in the wake of the global pandemic, rising a whopping 33% since the first lockdowns began.
And sadly, scammers do discriminate. People aged 70 and over are the most susceptible to online scams. So are those who live in social isolation. As a result, fraudsters target these two demographics relentlessly.
However, there is good news. One of the best ways to protect yourself (and others) from such risks is by staying informed. You can learn what these scams look like and how to avoid them. Let’s take a look at the most common strategies.
Transferring Money to Strangers With a Wire Transfer
Global payment fraud losses tripled from $9.84 billion in 2011 to $32.39 billion in 2020, according to Merchant Savvy.
Experts agree that payment fraud schemes will proliferate. Projected losses are expected to reach a staggering $40.62 billion in 2027, up 25% from 2020.
So, what do these scams look like? In most cases, money transfer scams involve a fraudster contacting you via some online medium. The criminal then spins a story they hope will persuade you to send them money via a bank/wire transfer.
While this may appear to be an easy thing to avoid, you’d be shocked at how convincing these scams can be.
Con artists employ a range of manipulative techniques to convince (or even threaten) you to hand over your money. In addition to this, before attempting to steal your data or requesting that you transfer money, scammers will usually pose as trustworthy entities such as the bank, government, or company official.
Not Much Recourse for Transfer Victims
Unfortunately, it’s incredibly difficult to reverse a payment after it has been sent.
It’s always best to proceed with extreme caution when transferring money to unverified beneficiaries. So, is a bank transfer a safe method of payment in these instances? Well, while there is nothing inherently risky with the bank transfer itself, you may want to consider opting for a specialist money transfer provider. This is especially the case if you are concerned for your safety or are sending large sums of money.
This is because it’s likely that a transfer provider will require you to submit supporting documentation in order to authorize the payment.
If they realize you are trying to initiate a high-risk transfer, they may block the payment, or make you sign a disclaimer. On top of this, most providers will notify you if the account number does not match the account name. This can give further clues as to whether or not the intended recipient is legitimate.
By adding extra steps in the process, a money transfer specialist will give you a chance (and a second pair of eyes) to reassess the validity of the beneficiary before you send over your hard-earned cash.
Phishing is a type of social engineering technique that fraudsters use to deceive victims into revealing three types of personal data. They hope to gain info in three primary categories.
- Personal Data: Name, address, email address, etc.
- Credentials: Username, passwords, etc.
- Medical Information: Treatment information, insurance claims, etc.
96% of phishing attacks arrive by email, most of which appear to be from reputable senders, typically posing as a bank or government agent. Incredibly, criminals send out 3.4 billion phishing emails each day.
While email is the biggest threat, a significant percentage of phishing attacks still arrive via phone. These scams use techniques of manipulation. They attempt to coax victims into handing over their data. Below is a quick example of a tongue-in-cheek phishing attack in action.
The moral of the story? If someone calls you to tell you there is a pigeon in your bank account, it’s probably a scam. Jokes aside, avoiding phishing attacks is all about remaining vigilant and applying common sense before handing over sensitive information.
Do not open attachments from unsolicited emails. Never trust alarming messages that try to create a sense of urgency. And above all, if something sounds too good to be true — such as a random email promising that you are owed money — it probably is.
Tech Support Scams
Finally, there are tech support scams. These are most typically targeted at the elderly and less tech-savvy people.
The scam works like this. You get a phone call, an email, or a pop-up warning that your computer has been infected. The fraudster will next ask you to download software that would allow them to take remote control of your computer. Next, they will download a virus or otherwise deceive you into believing that something is wrong with your computer before offering to fix it…for a cost.
Unfortunately, it can be extremely difficult to remove a scammer from your system after they have gained access. Therefore, the best course of action is to never let them in the first place.
If you do hand over control, you must update your security software promptly. Run a full scan, and delete anything it finds as a threat. If you exchange important information with them, reset your passwords and usernames right away.
A Final Word
With online scams escalating, it’s important to keep yourself educated. Stay informed on the various threats. Minimize your online exposure.
It doesn’t matter whether it’s online phishing, tech support scams, or money transfer fraud. The best way to protect yourself is to always remain vigilant online, especially when dealing with strangers.
As a rule of thumb, never hand out personal information or transfer money to someone who can not verify their identity. If you have any doubts, contact the company for which the fraudster claims to work. It’s always better to be safe than sorry.