Winning a lottery that you never entered, receiving a greeting card from someone you haven’t talked to in years, or being randomly chosen by a rich person from an exotic country to receive 20% of their fortune – if it’s too good to be true, it is more than likely a scam. If you become a victim of an online scam, not only will you not win anything but you may, in fact, lose everything.
Key takeaway: An online scam is a dishonest scheme carried out over the internet. The goal is to defraud potential victims and generate financial gain for the perpetrator. Most scammers are after your bank account details, though some might also install malware on your computer. Read on to learn about the most common types of scams and the ways to protect yourself.
- What is it?
- Scam types
- Scam examples
- How to protect yourself?
Tip: Don’t fall for online scams. Buy antivirus software to stay safe.
What is an Online Scam?
An online scam is any use of internet technology to defraud people. Internet scams are carried out by cybercriminals for some type of personal gain, financial or otherwise. Scammers use deceptive methods like phishing emails, fake websites, and malicious software to gain access to their victims’ data, files, and personal information. They may steal their victims’ credit card data and Social Security numbers, access their bank accounts and medical records, or even trick them into willingly giving them their money.
For as long as there has been the internet, there have also been scammers hoping to trick inexperienced users into sharing their sensitive information. The concept of internet fraud first caught public attention in the mid-1990s, when reports about the use of stolen credit cards with celebrity names emerged. With the subsequent boom in e-commerce, online scammers became craftier and started setting up fake shopping and auction websites that looked just like the real thing to target unsuspecting shoppers.
Despite some major cybersecurity advancements in recent years, online fraud has experienced a sharp rise in the social media age. According to statistics, internet scams have reached a record high in 2017, with more than 45,000 reported cases in the United States alone. Similarly, almost 7,000 Australians were victims of online shopping scams in 2017, which has cost them just under $1 million (A$ 1.38 million). Globally, online scams have so far cost businesses and individuals more than $100 billion.
Online scams and internet fraud in general have long been part of the U.S. Criminal Code. This legal document prescribes a maximum sentence of 20 years for fraud in relation to computers, access devices, and personal documents. Email fraudsters can get a maximum sentence of five years, whereas the owners of misleading or deceptive websites with inappropriate content can get up to 10 years in prison.
Online Scam Types
There are numerous types of online scams, ranging from the impersonation of others on social media to fake crowdfunding campaigns. Some of the most common types of scams include the following:
- Spear Phishing
Spear phishing is the act of sending deceptive emails to individuals, groups, and organizations in an effort to gain access to their private information. Instead of just randomly sending out these emails to millions of addresses, hackers send them only to specific targets whose addresses they have acquired via social media or stolen email records. To make the scam seem more realistic, hackers will often pretend that they are the victim’s business partner and address them by their name rather than using a generic intro.
To acquire the victim’s personal information, scammers will ask them to fill out an urgent invoice or respond to a false query. They may also attach a file to the mail and claim that it contains a very important document that needs to be revised. Unsuspecting victims will download the attachment to their computer, only to have malicious software installed on their computer. This, in turn, will allow the scammer to monitor not just the victim’s PC but all other devices connected to the same network, too.
- Lottery Scams
There’s probably not an internet user that hasn’t received at least one lottery scam email in their lifetime. Many inexperienced users have fallen victim to this scam over years and sent money to the scammers. These messages inform potential victims that they have won a large sum of money, but that they have to pay a small fee in order to claim their prize. In some cases, scammers may even set up their own fake online payment terminal that will also give them access to the victims’ credit card info.
- Greeting Card Scams
Usually sent out around big holidays, greeting card scam emails inform you that you have received an animated greeting card from a friend or a family member, but there’s a catch. Namely, to view your greeting card, you must click on the link included in the mail and download a piece of software, usually Flash Player. However, instead of Flash Player, you will download a piece of malicious software that will allow hackers to track your activity, access your files and documents, and even record your keystrokes.
- Advance Fee Scams
Also known as a Nigerian scam, an advance fee scam usually starts with a poorly written emotional email allegedly sent by someone from a war-torn country whose parent has left them a large sum of money. They will ask you to let them transfer the funds to your bank account in exchange for 20% of the sum.
If you respond to the email, the scammer might start a long chain of correspondence, asking you to pay various fees and taxes to help them transfer the money. They will even send you forged documents to make the scam more believable. Alternatively, they may ask you to provide your bank account info so they can transfer all the funds at once. If you do, they will instead use the info to empty the account.
- Killer Scams
Killer scams involve an email sent by an alleged assassin who has been hired by an unnamed person to murder you. In this email, they will tell you that the only way to avoid death is to pay them thousands of dollars within a small timeframe, typically no more than 48 hours. These emails may contain personal information collected from your social media profiles to make the threat seem more real.
Thought by many to be a thing of the past, new killer scam cases recently made the news in the United States. This time, however, scammers were seeking ransom in cryptocurrency rather than physical money. That way, if the target fell for their scam, the authorities would have no way to catch them.
Online Scam Examples
While some online scammers manage to stay anonymous and escape the law, many end up arrested and tried for their cybercrimes. Some of the largest online scams uncovered by law enforcement in recent years include the following:
- In 2016, the Nigerian police arrested a 40-year-old man responsible for thousands of successful online scams around the world. Known only as “Mike”, the man used spear phishing emails to install malware on his victims’ computers and gather their personal data, earning more than $60 million in the process.
- In June 2018, 74 people were arrested in the United States, Nigeria, Poland, Mauritius, and Canada for their involvement in spear phishing and advanced fee scams. The arrested scammers have stolen millions of dollars, with $16 million successfully recovered by the US authorities.
- Also in June 2018, 95 professional scammers were arrested by Europol for carrying out more than 20,000 transactions using stolen or otherwise compromised credit cards. In doing so, they have obtained more than $9 million (8 million euros).
How to Protect Yourself from Scams
The easiest way to stay safe online is to use thebest antivirus software (like Norton,BitDefender, Intego or Panda)to keep your information and your files secure. When it comes to online scams, however, it is also important to be very careful about what you do and how you behave on the internet. For one, you should never share your credit card details or any other personal information in emails or private messages on social media. Only purchase products from trusted e-commerce sites with HTTPS certificates and data encryption for added safety.
Don’t ever respond to emails sent to you from unknown addresses, and don’t click on any links or attachments they may contain. If you receive emails with disturbing content (i.e. killer scam and advance fee scam emails), you should report them either to the Federal Trade Commission or the FBI.
While some scammers may only be after your credit card or bank account info, others could infect your computer with spyware or some other type of malicious software to monitor your activity and steal your personal information. It is thus important to use thebest antivirus softwareto stay safe on the internet. For extra protection, make sure to update your antivirus program and virus definitions on a regular basis.
- BBC (1)
- BBC (2)
- Heimdal Security
- Scam Watch (1)
- Scam Watch (2)
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A common trick scammers use is to send you a fake email pretending to be from your bank or another organisation you trust like HMRC or PayPal. This email will ask you to visit a website and log in with your account details.What is an example of a scam situation? ›
For example, a scammer may sell you concert or sports tickets but then never actually give them to you. Or a scammer might purchase an item from you, appear to send a payment, and then cancel it before it reaches your bank account.What is online scam description? ›
Online scams, also known as internet scams, continue to evolve and can vary widely. The term generally refers to someone using internet services or software to defraud or take advantage of victims, typically for financial gain.What are three parts of a scam? ›
The concept states that there are three components which, together, lead to fraudulent behavior. They are (1) a perceived un-shareable financial need (motive/pressure), (2) a perceived opportunity to commit fraud, and (3) the rationalization of committing the fraud.What is the most famous scam in the world? ›
This former New York City fund manager is long gone, passing away in April 2021 in prison at the age of 82. But the Madoff story still resonates in 2023 with the successful Netflix documentary "The Monster of Wall Street" retelling the tale of the mastermind behind the biggest Ponzi scheme ever recorded.
Distraction can impair our decision-making abilities. Forty-seven percent of employees cited distraction as the top reason for falling for a phishing scam. While many people tend to have their guard up in a physical office, we tend to relax at home and may let our guard down, even if we're working.What crime is online scamming? ›
Online Fraud, Hacking and Phishing in California
Most online fraud or cyber crimes are known as “wobblers,” meaning they may be prosecuted as either misdemeanors or felonies. If you are convicted, you may be facing: $1,000 to $10,000 in fines. Up to 3 years in county jail.
The perpetrators of online scams are often charged with federal wire fraud crimes. Wire fraud is similar to regular fraud, except that it involves the use of interstate electronic communications, including email, instant messages, or other online activity.What are some typical scammer behaviors? ›
Look for typical scammer behavior.
Repeatedly asking for odd personal information (e.g., your location) Disconcertingly dramatic, erratic, or otherwise strange behavior (in all likelihood, you'll want to avoid dating people like this anyway) Early or inappropriate professions of love.
What they want are account numbers, passwords, Social Security numbers, and other confidential information that they can use to loot your checking account or run up bills on your credit cards. Identity thieves can take out loans or obtain credit cards and even driver's licenses in your name.
Data mining classifies, groups and segments data to search through millions of transactions to find patterns and detect fraud. Neural networks learn suspicious-looking patterns and use those patterns to detect them further. Machine learning automatically identifies characteristics found in fraud.What is the number one scam in America? ›
1. Cryptocurrency-romance scam. Crooks combine crypto scams with old-fashioned romance scams, posing as internet love interests so they can cajole their targets into downloading an app and investing in fake crypto accounts.What is the number 1 scamming state? ›
In 2022, the District of Columbia was the state with the highest rate of consumer fraud and other related problems, with a rate of 1,747 reports per 100,000 of the population. North Dakota had the lowest rate of consumer fraud reports in that year, at 536 reports per 100,000 of the population.Who gets scammed the most? ›
Older people are often assumed to be the main targets of financial fraudsters, but younger generations may actually be more at risk to fall victim to scams, research suggests.What are the apps used for scamming? ›
A poll of 726 online scam victims from 2021 was conducted as part of the study to find out where most scams are taking place. The top 10 apps were led by Facebook with 152 victims, Google Hangouts with 99 victims, Instagram with 80, WhatsApp and Plenty of Fish had 50 each.How do people get caught scamming? ›
One common way is by obtaining search warrants. Law enforcement will obtain a search warrant from a judge authorizing them to search for and seize evidence related to the online scam. This may include computers, cell phones, bank records and other documents.How do scammer get your money? ›
Scammers get access to your bank account numbers through fraudulent telemarketer calls or by stealing them from unsecured websites when you sign up for a free trial. Once a scammer has access to your account information, they can debit your account every month with your knowledge or approval.How do people scam people? ›
Scams can come in many forms, but all are designed to get hold of your money. They do this by getting you to reveal your personal details, stealing your information, or even tricking you into willingly handing over the cash. It's important to know how to recognise a scam so you can protect yourself from fraudsters.What is online scamming called? ›
The term "internet fraud" generally covers cybercrime activity that takes place over the internet or on email, including crimes like identity theft, phishing, and other hacking activities designed to scam people out of money.Why do people start scamming? ›
The goal of scammers is to separate their unwitting victims, often those that are not technically savvy, from their PII, including names, addresses, social security numbers, financial data, and other such information.
An IP address can be used to trace the location of the scammer if the IP address is not hidden using a VPN or other means. There are a variety of ways to obtain someone's IP address.
Many people think scams mostly affect older adults. But reports to the FTC's Consumer Sentinel tell a different story: anyone can be scammed. In fact, reports suggest that many scams are harming younger people more than older adults.Do banks refund scammed money? ›
The most common type of fraud is known as an “unauthorised payment”, and the good news is that your bank is very likely to refund you if you've been a victim of this type of scam. Unauthorised fraud is a payment that you do not make yourself.What are scammer numbers? ›
Contact the bank, government agency, or company that the scam artist is impersonating so it can alert others and work with law enforcement to investigate the activity. Forward smishing messages to short code 7726—which spells “SPAM” on your keypad.What types of internet frauds are most common? ›
- spam. Spam is a generic term used to describe electronic 'junk mail' or unwanted messages sent to your email account or mobile phone. ...
- scams. ...
- spyware. ...
- identity theft. ...
- Phishing. ...
- internet banking fraud. ...
- suggestions to prevent.