Common Scams and How To Protect Yourself

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The internet is a part of everyone’s daily life and has transformed our world in ways we couldn’t have previously imagined.Unfortunately, along with the conveniences and opportunities that our interconnected world offers are heightened risks.

Online scams are a perfect example of this very reality.
From phishing scams that aim to steal your financial information and identity to offers that are too good to be true and end up costing you money for nothing in return, the online environment has its share of scams and shady operators.

Explore some of the more common online scams you’ll want to steer clear of while learning the best practices to avoid these dangerous pitfalls altogether.

THE ADVANCED FEE SCAM

Have you ever received an email that claims to be from a bank, an influential foreign businessperson, or a lawyer, promising you large sums of money in exchange for a small upfront fee? If so, you’ve probably encountered the advanced fee scam – and hopefully you avoided it.

This scam always starts out by giving you the good news: you’ve been selected for a prize, inherited a large sum of money, or have been chosen to work with a successful organization.

Yet, there’s a catch: the funds are blocked and require a cash payment to unlock them. This might include processing fees or taxes to be paid on the money you’ve allegedly inherited. Moreover, the businessperson who is so keen to work with you might require an upfront fee to investigate you as a potential partner.  Here’s how the scam works:

  • The advanced fee scam is designed to make you part with your money in exchange for a large payout.
  • It usually uses email or text messages which are sent out to a large group of people simultaneously. Mail servers block many of these messages, and you might see some of them land in your spam folder.
  • Unfortunately, the payout promised by this type of scam almost never exists – and once you’ve paid the scammer, recovering your money may be next to impossible.

To avoid these types of nefarious schemes, simply ignore emails, phone calls or text messages asking you to make a payment in exchange for a large sum of money and send it to your junk folder or report them to the infrastructure provider.
As with all scams, it’s important to remember the golden rule: if it sounds too good to be true, it probably is.

GUARANTEED ACCEPTANCE FOR A CREDIT CARD OR LOAN

If you’ve been trying unsuccessfully to obtain a credit card or personal loan, you’ll know how frustrating rejected applications can be. So, what if there was a guaranteed way to get your card or loan? That’s exactly what the guaranteed acceptance scam promises its victims.

Unlike legitimate loan or credit card applications that require a solid credit and employment history and stable personal finances, guaranteed approval scams won’t ask you for much financial information at all. That is the first sign that you’re dealing with a less-than-honest organization.

In exchange for guaranteed approval, you may be asked to pay an upfront fee, join a club, or take other actions that require you to pay the scammer immediately. As you may have guessed, once you’ve paid the fee, that’s probably the last you’ll hear from the scammer. Moreover, your credit card or loan will never materialize.

  • This type of scam often targets job seekers, students and people with bad credit.
  • You should be especially cautious about any offer you receive in the mail without your name on it, by email or in a text or social media message.

To avoid the guaranteed approval scam, it’s important to remember that there’s simply no such thing as credit approval without a hard credit check and detailed financial information.

If you’re dealing with a legitimate loan or credit card company, they’ll always ask you to verify your identity, income and credit record. Furthermore, it’s important to not disclose sensitive or seemingly harmless personal information over the phone to someone who reaches you directly.

LOTTERY SCAMS

Winning the lottery is a dream that many people wish would come true. Accordingly, it’s no wonder it’s such a popular story for scammers to tell unsuspecting victims.

If you read through your junk email folder right now, chances are you’ll come across more than one lottery scam email that your email provider has already filtered for your safety. If you’re unlucky, you may receive one in your regular inbox delivering the best news you’ve had all year: you’ve just won the UK, Spanish or another foreign lottery.

  • The lottery scam works by getting you excited over your big win and baiting you with a type of upfront fee that you need to pay in order to receive or unlock the funds.
  • This fee could be in the form of “government taxes”, a processing or handling fee, or bank transfer fees.
  • After paying the fee, you’ll never hear from the scammer again and you certainly won’t receive any lottery winnings.

Remember, every lottery in the world requires you to buy a ticket in order to stand a chance of winning. If you haven’t bought a lottery ticket, you simply can’t be the winner. It’s as simple as that.

Another type of scam you may encounter are special offers to buy guaranteed winning numbers for local or international lotteries. Any time you hear “guaranteed” and “lottery” in the same sentence, you’ll know there’s a scammer at work.

If you’d like to stand the chance to win a lottery prize, simply buy lottery tickets the old-fashioned way or through your local lottery’s official website. That way, you’ll be sure you’re not getting scammed.

PHISHING

The phishing scam is a sophisticated type of fraud which tricks you into revealing your banking login details or personal information to the scammer through a fake website and email address.

Typically, you’ll receive an email that looks like it was sent by your bank, online broker or PayPal.

  • The mail will scare you by telling you that your account security has been compromised and that you need to update your details immediately.
  • Once you click on the link in the email, you’ll be directed to a fake website that appears to look similar to the official company website the scammer is impersonating.
  • After you enter your details, the scammer will use them to access your real account drain every last cent.

It’s important to note that your bank, broker or PayPal will never email you asking you to confirm your account details.

If you do receive an email that looks suspicious, first make sure that it has been sent from the organization’s official email address. Then give them a call to confirm that it was really sent from a legitimate person.

To report identity theft in the US, you can visit the federal government’s identitytheft.org website.

OVERPAYMENT SCAM

If you run an online store or have recently posted items for sale on a classifieds site like Craigslist, you will want to watch out for the overpayment scam.

This scam is especially easy to fall for because the scammer will actually send you money first before trying to defraud you. Here’s how it works:

  • You’ll receive a message from the scammer, to say they paid you too much for the product by mistake and asking you to refund them the difference.
  • They’ll typically ask you to make payment by Western Union, MoneyGram or another payment method that’s difficult to trace.
  • After you make the payment, you’ll realize that their original payment is fake – either the proof of payment they sent is forged or the payment will have been reversed.

If you sell your items on eBay or Amazon remember that it’s almost impossible for someone to overpay you on these sites. The exact amount due is charged on the checkout page, so if a buyer claims to have overpaid, you should absolutely be suspicious of the supposed “buyer”.

CAREER OPPORTUNITIES

Job seekers are always keen to find employment opportunities and scammers often take advantage of this reality.

If you receive an email from someone you’ve never heard of, offering you access to a great selection of jobs with high salaries in exchange for a fee, be on your guard.

You should also be suspicious of jobs that require very few skills – like putting letters in envelopes or assembling low quality products.

  • The career opportunities scam almost always requires you to pay an upfront fee. This is typical of most scams.
  • It could be called a finders’ fee, job placement fee or membership fees for a job seeker’s club, or the cost of training materials or a home assembly kit.
  • Once you’ve paid the fee, you’ll soon realize that the jobs on offer either don’t exist or the positions have already been filled.
  • If the scam involves assembling products, you’ll find that nobody wants to buy them.

Remember, when companies use employment agencies to recruit talent, the recruitment fees are almost always paid by the company – not by you. Any time you’re asked to pay upfront, you should be especially cautious.

CHARITABLE DONATIONS

The spirit of giving is a beautiful part of human nature, and millions of people are in need of benefit from charitable donations each year.

Unfortunately, scammers are extremely active in the online charity space. Accordingly, you’ll always want to verify before you donate.

  • If you receive an email asking for charitable donations, check the name of the charity carefully. It could be a scam.
  • You can check the legitimacy of a charity through give.org, the Better Business Bureau’s Wise Giving website. Simply enter the name of the charity to find out if it’s a scam or not.
  • Be especially careful of emails that feature “tearjerker” stories about poor children or families in developing countries and ask you to donate to anonymous persons.

To ensure that your charitable donations reach people who are truly in need, it’s best to donate to well-known charities with long track records of transparently supporting successful projects.

FREE VACATIONS

Everyone loves a relaxing vacation and getting one for free sounds like a dream come true. Unfortunately, chances are that an offer like this could be a scam.

  • The free vacation scam always starts by giving you exciting news – you’ve won a free trip! However, to claim it, you’ll need to join a club or pay a fee.
  • Once you’ve paid, not only will you never receive the free trip, but you’ll also have given your credit card information to the scammer which could result in serious financial harm.
  • In the rare case where the scam does provide a free trip, it will usually involve extra fees, cheap flights and substandard accommodation – you could even arrive at your hotel only to find that your reservation was fake or cancelled at the last minute.

If you’d like a chance to win a free vacation, the best strategy is to enter a competition hosted by a well-known airline, booking site or tourism business. It’s always better to be safe than sorry.

MAKE MONEY AT HOME USING YOUR COMPUTER SCHEMES

The final scam is probably the sneakiest of all. In this age of freelance work and remote jobs, there’s nothing unusual about making money at home using a computer.
Scammers are taking advantage of this to hide their fraudulent schemes in plain sight.

  • The work from home scam usually involves something like posting reviews on unknown websites, sending out mass emails to unknown people, or other simple tasks.
  • You’ll be promised big earnings – usually thousands of dollars per month – for doing menial tasks. This is a big red flag.
  • Almost all of these scams will ask you to pay a signup fee or a training fee before you start working. Once you’ve paid this, you’ll realize that your earnings are tiny or nonexistent.

To avoid being scammed like this, it’s best to always seek online work through legitimate companies or freelance sites.

STAY SAFE, STAY LEGITIMATE, AND NEVER PAY UPFRONT

Online scams are always evolving, but they always feature common traits; an offer that’s too good to be true, a time limit that’s going to expire soon, and an upfront payment.
By avoiding online offers that exhibit these characteristics and sticking to well-known websites and organizations, you’ll be able to stay safe online and enjoy the great entertainment and career opportunities that the internet and social media have to offer.

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