8 Types of Common Online Scams and How to Avoid Them

In the US alone, almost 70 million people lost their money to online scammers in 2021 (around 21% of the population). In other words, in every 5 people, at least 1 of them has fallen into online fraud!¹

Similar scenarios are also happening around the world, especially after the Covid-19 pandemic. The reported fraud incidents in the UK have risen from 53% in 2020 to 61% in 2021.²

In Asian countries like China and Thailand, online scams are one of the major concerns for citizens’ security as well.

The rise of this problem pushed China to legitimise a new law in an effort to prevent telecom and online fraud in September 2022.³

As per Thailand, in 2022, the Ministry of Digital Economy and Society found and closed 6,024 illegal URLs and up to 58,463 bank accounts intended to commit online fraud.⁴

Since online frauds and scams are global, DeeMoney believes it is important to learn and be aware of them to prevent you and your family from harm.

8 Different Types of Scams on the Internet

1. Phishing Scams

Phishing is a fraudulent act attempting to steal the target’s personal information, including credit card numbers or frequently used passwords. Access to this data would lead to the misuse of the victims’ details or the loss of money. Otherwise, their purpose is to make you download malware so they can access your information or create a presence in an organisation for future cyberattacks.

The danger of phishing is that the attackers can avoid cybersecurity defences and, instead, gather sensitive information from the owner. Some of the common phishing attacks are through emails impersonating organisations such as post offices or technical support.

It typically goes like this:

There is an email from a seemingly legitimate institution or the service you use. After the victim reads the mail, you find out that the email requires you to act urgently, either to pay or to confirm something. There would be a link to a fake invoice (containing malware) or lead the target to a login page, asking the victim to fill in your personal information and passwords.

Apart from online channels like emails, these attackers also tend to use phone calls and text messages to acquire information from the target.

2. Copycat Government Scams

Like typical phishing activities, these scammers impersonate government agencies or departments and reach out to their targets for financial gain.

Another technique they usually implement is creating a fake government website. They often use logos and a similar name from the government on their email and website link attached.  

These copycats usually include these threats in their messages:

• Inform that the target must pay fine, fee, or unpaid taxes.
• Ask to verify their information as their sensitive information has been stolen.
• Offer a job opportunity that does not exist and requires the target to make a payment for expenses.

3. Dating Scams

We can’t deny that online dating has become a part of modern lifestyles, with more than 300 million people worldwide using dating apps. Out of these 300 million users, 20 million people even pay for a premium feature.⁵

According to Federal Trade Commission Customer Advice, romance scammers have stolen $547 million from victims in 2021.⁶

The intention of scammers is to first appear loveable, use strong emotion, and establish a relationship quickly. They often tell you they live far away or cannot meet you because of work or other excuses.

Later, when they gain your trust through time by chatting or calling each other, they will start to create stories about why they need financial support from you. Their reason could range from a plane ticket to visit you to emergency medical expenses.

4. Online Shopping Scams

Online shopping scammers have various ways to trick people into giving them sensitive information or money. These scammers might create a fake shopping website, an ad on a website, or pretend to be a retailer on a social media platform.

Red flags for potential online shopping scams:

• Unrealistic prices
• Pressure to pay quickly
• No customers, reviews, or customer service contacts are available
• Unsecured websites
• Require uncommon payment methods such as gift cards, virtual currencies, or foreign currency payments.

Norton’s 2022 Cyber Safety Insights Report revealed that 62% of the Indian respondents answered that they had fallen for online scams during their holiday shopping. Significantly, from the same report, up to 83% of those who fell for scams lost their money.⁷

These numbers signify the importance of awareness during your online shopping.

5. Malware

Malware or malicious software is created to access the users’ information or gain control and disrupt the operation system. The malware might be embedded in a link or a genuine download site.

Types of malware and how they work:

• Adware: a type of malware that randomly displays unwanted advertisements on a computer or mobile screen that are difficult to detect or remove.
• Ransomware: extortion software that blocks, threatens to block, or threatens to publish a user’s access to personal data if certain payments are not made.
• Virus: a program or code that is attached to a program or a file and able to replicate itself to other computers or devices
• Trojan: similar to the story of the Greek Trojan horse, Trojans disguise themselves as legitimate and harmless sites or software but can actually cause harm to users.
• Worm: similar to a virus, a worm can replicate itself on other devices without being attached to a file and spread through networks, removable storage devices, or links on social media and emails.
  

6. Fake Charity

One example of a fake charity scam is the $250 million “Feeding Our Future” fraud in 2022, which claimed to assist children in need during the pandemic. Instead, the scammers spend the money on personal items and luxuries.⁸

Apart from the fake charity scams during the pandemic, a fake website was created claiming to donate money to Ukraine during the hardship. These websites often urge people to donate quickly or through less common forms of payment such as gift cards or cryptocurrencies. Likewise, they usually avoid requesting money through applications or credit cards that can trace the transfer history easily.

7. Fake Unexpected Offers

Unexpected lottery winner? Unexpected job offer?

Have you ever received notifications or emails congratulating you on being a lottery winner or offering you a dream job, but you have never participated in any game or applied for a new job?

While it seems like you are the one who gains benefits from these offers, there might be malicious intentions behind the things that are too good to be true.

More often than not, scammers will ask you for money before you can get your offer. For instance, they might require you to pay a fee to receive the prize.

For the fake job offer scams, they might ask for your personal information or a training cost before you can actually start your role. Sometimes, the scammers also trick people into being “considered for a job” by paying them a fee.

All in all, if the offer is unexpected and too good to be true, Hold on and check it once again. It might actually be too good to be true!

8. Fake Financial Institutions & Banking Scams

Scammers may also impersonate banks or other financial institutions to obtain sensitive data or money from internet users. The fraud may come in the form of SMS, emails, or other social media platforms.

Similar to other forms of scams or phishing, scammers would use logos from a legitimate institution to create credibility and use the names or similar names of a financial institution to create credibility and lure people into their traps.

Here are some common ways fake financial institutions use for their malicious activities:

• Clone websites
• Business Email Compromise (BEC)
• Asking for login credentials

Apart from scams online, fake financial institutions tend to use phone calls to ask for money transfers or personal information from their targets.

How to Avoid These Scams

Now that we have learned about different types of online scams, here are some simple steps you can take to decrease your chances of being tricked by scammers.

1. Use secure sites (Is it https or http?)

Always ensure that the site you visit, especially those you use for financial activities, is safe. The easiest way to check is to see if the URL is “https” (Hypertext Transfer Protocol Secure) rather than “http” (Hypertext Transfer Protocol) with the padlock icon within the tab in front of the URL.

There are several reasons why https websites are safer than http ones. For example, https websites are legitimised by third parties, and they provide security cookies, increasing connection security.

2. Don’t make passwords or sensitive data easily accessible

Making your passwords and sensitive data, such as Personal Identifiable Information (PII) or financial information, public or easily accessible can cause severe consequences. Identity thefts can use your personal information in your stead, affecting your credit scores and leading to financial losses.

3. Take extra care when using public internet

Sometimes, using the public internet is unavoidable. However, you should avoid performing financial transactions while using the public internet as it is easily accessible and infiltrated by hackers.

4. Check the spelling

Believe it or not, You may be able to detect some scams simply by checking the spelling of the name of the sender or the name of the website. Some web addresses or email addresses may use slightly different names from the real ones.

For example, make sure that the address name is “deemoney”, not “demoney” or “deemonney”.

5. Check if it is too good to be true

As previously mentioned in the explanation about the fake unexpected offer scams, if the offer is unexpected and too good to be true, it usually is! The scammers may ask for your personal information or ask for further payments afterwards.

6. Be careful when sending money

Avoid sending money to people you don’t know or to services that might be scams (as listed above).

Additionally, suppose someone claims that they have accidentally transferred money to you (whether by putting in the wrong account number or for other reasons). In that case, you should contact your bank instead of transferring money back, as you might be involved in the case of money laundering.

7. Use strong password

Not only are strong passwords with combinations of letters, numbers, and special characters difficult to remember, but they are also harder to crack!

When hackers use automated methods, like brute-force attacks, the longer and more complex passwords require more time and effort to guess correctly.

8. Review privacy & security settings

When was the last time you reviewed your privacy and security settings on your online accounts? You can control who can get access to your personal information so that you can prevent scammers from stealing your data.

Moreover, some sites or services also provide two-factor authentication (2FA), acting as an additional authentication security system separate from the one you already have.

2FA is recommended as it requires more data than just usernames and passwords.

9. Update your software and devices

Though this method may at first seem unrelated, updating your services or devices to the latest versions will allow you to access the latest vulnerability fixes and new security features.

10. Learn and be aware about online frauds

Last but not least, learning and staying updated about different scammers’ techniques to get access to your data and money is one of the best ways to protect yourself from fraud since you are already aware of suspicious activities and how to detect them.

Save this article for the next time you suspect a financial scam. Or send it to your loved ones so they can also be aware of the tricks scammers use and how to be safe from them.

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8 Types of Common Online Scams and How to Avoid Them (deemoney.com)