Protecting your money is essential regardless of how much you have saved or where you keep it. It’s an unfortunate fact of life that internet fraud is common. If you’re not careful, there’s a risk that you could lose your money to a scammer. The best way to avoid that is to educate yourself about popular online scams and how to avoid them.
At Addition Financial, we believe that knowledge is power and always want our members to be knowledgeable about scams to look out for. So, to help you protect yourself, here’s a list of 11 popular online scams to look out for and some tips on how to avoid being taken in by them.
#1: Phishing Scam
Phishing scams might be the oldest type of internet scam, but they’re still going strong. This type of scam involves sending a target a phishing email or phishing text that includes a link to a fake website. When you click on the link, you’ll be asked for sensitive information that may include your user ID, password or even credit card information.
The best way to avoid phishing scams is to familiarize yourself with the typical structure and appearance of emails from your financial institution or credit card company. Scammers usually make mistakes that can help you avoid being taken advantage of. Another tip is to avoid clicking on a link and instead, type in the URL of your credit union or bank in a browser and check your account from there.
#2: Employment Scam
Employment scams have been on the rise with more people working remotely and finding job opportunities on the web. In short, an employment scam is anything that takes advantage of someone under the guise of hiring them to do work. It may take several forms; here are a few of the most common:
- A job listing asking you to do work in advance and be paid after. Sometimes these can be legitimate, but you’ll need to be sure the person hiring you isn’t a scammer.
- A job listing where the “employer” asks you to accept extra money and send some back to them or forward it to a third party.
- Emailed fake job offers. A lot of people send fake job offers by email and these may be a form of phishing, where you’re asked for personal information that may then be used in identity theft.
Be wary of anything that sounds too good to be true or anybody who tries to get you to accept extra money or accept a job that you didn’t apply for.
#3: Identity Theft
Identity theft is a type of online scam that can be financially and personally devastating. Identity theft starts with someone getting your contact information or taking something personal that enables them to steal your identity. Online identity theft may start with a phishing email. People may also scan your social media account for personal information or use card skimmers at ATMs or points of sale.
The warning signs of identity theft may include bills for items that you didn’t buy, suspicious activity on your credit report, and debt collection calls for accounts you didn’t open. If you suspect that your identity has been stolen, you should report it to the Federal Trade Commission, your financial institution and creditors, and the local authorities.
#4: Impersonation Fraud
Impersonation fraud occurs when a scammer pretending to be somebody they’re not approaches a target online to get their money or personal information. This type of fraud may be a lead-off to something bigger, such as identity theft. A common variation of impersonation fraud is someone pretending to work for a charity or raise money for a good cause.
The best way to avoid impersonation fraud is to research any person or organization that asks you for money. You can ask direct questions if you’re in a position to do so, but don’t take their immediate word for legitimacy. You can use organizations like Charity Navigator to learn about non-profit organizations and their history.
#5: Cryptocurrency or NFT Fraud
Cryptocurrency and non-fungible tokens (NFTs) are flip sides of the same coin. While cryptocurrency came into being as a way of decentralizing banking, investing in crypto or NTFs has a lot in common with playing the lottery. Cryptocurrency scams may entice targets to buy fake cryptocurrency or NFTs. They may also involve phishing to get people to give the scammer access to a crypto wallet.
Our overall advice about cryptocurrencies and NFTs is to buy only what you can afford to lose and research everything. Any crypto or NFT you purchase should be stored in a cold wallet, meaning that it isn’t accessible online. For example, you might keep your wallet on a device that’s never connected to the web or in an offline, paper wallet.
#6: Lottery Scam
Lottery and prize scams get targets invested in the idea that they’ve won something, only to scam them out of their money. If you get an email or text telling you that you’ve won a prize, be skeptical. You’d remember if you entered a contest or lottery, right?
The red flags for this type of scam include a request to pay to get your prize, a claim that paying will increase your chances of winning, and any request for personal information such as a credit card or bank account number.
#7: Peer-to-Peer Payment Scams
The use of peer-to-peer (or P2P) payment apps is common and so are scams related to them. A P2P scam may be designed to get you to pay for a product that never arrives or to return money that was sent to you in error. There’s usually no recourse because the money is sent instantaneously and most P2P apps offer no protection.
The best way to protect yourself is to send money only to people you know personally. Avoid using P2P apps for product payments unless you will receive the product immediately, for example, buying produce at the local farmer’s market.
#8: Online Shopping Scams
Online shopping scams involve any attempt to get you to buy something, a product or service, that will never be delivered. For example, you might click on a Facebook or Instagram ad when you see a product you like and hand over your credit card information without thinking twice.
You can avoid this type of scam by Googling companies and products before buying. Many of the shopping ads you see are going to be legitimate, but it may be impossible to tell simply by looking at them.
#9: Tech Support Scam
Tech support scams are designed to scare web users into thinking their computer or mobile device has been attacked or compromised. Scammers may send an email or text warning you of a problem or you may see a pop-up window when visiting a scam website. These warnings can be scary, but it’s important to stay calm if you see one.
The scammer will usually tell you that they can fix the problem for a price, and may prompt you to begin a download. A few pointed questions and some research can help you recognize a scam. Keep in mind that no legitimate tech support company will email you to tell you there’s a problem with your device. If you’ve been a victim of tech support fraud, you can report it here.
#10: Real Estate Fraud
Real estate fraud may involve getting a target to make a down payment on a non-existent apartment or vacation rental. There’s also the possibility of a bait and switch, where the target is enticed by photos of a high-end rental, and after paying a high price, they’re then surprised by how low-end the rental actually is. Another type of real estate fraud involves lending scams, such as refinancing fraud, where the scammer poses as the homeowner’s mortgage lender and offers a tempting deal.
You can protect yourself from real estate scams by approaching every transaction with caution. Do some independent research, ask for references, and if you’re renting a vacation home, go through a legitimate company such as Airbnb or VRBO to make sure you have recourse if it doesn’t work out.
#11: Romance Scam
Romance scams are exactly what they sound like. A scammer forms a personal attachment with their target, making them believe there’s an emotional bond between them. Then, they get the target to send them money or pay their bills before ghosting them.
Romance scams may be difficult to spot. The best way to avoid being taken in is not to send money to someone you’ve only engaged with online. You have no way of knowing who they really are and there may be no way to get your money back once you’ve sent it.
Protect Your Money Online with Addition Financial
Nobody wants to be the target of an online scam. The 11 popular online scams we’ve listed here aren’t difficult to avoid. The key is to be skeptical and research anything that seems suspicious or too good to be true. If you are the victim of an online scam, make sure to report it to the appropriate authorities and your financial institution.
Addition Financial uses state-of-the-art security to protect our members’ accounts and the money in them. Click here to become a member today!
