Cybercriminals can be very creative when it comes to swindling people out of money. They will use a variety of methods to target their victims, ranging from impersonating government officials to creating fraudulent online marketplaces. Time and again they have proven to be very adaptable, tailoring their scams around various hot topics.
In recent months, many scams have capitalized on the COVID-19 pandemic, with the schemes impersonating health authorities or offering to sell protective equipment that was in short supply. Up to December 16th, the US Federal Trade Commission had received more than 275,000 reports of fraud and identity theft related to the pandemic, with the victims reporting losing US$211 million in total. These days, there are scams doing the rounds that attempt to cash in on the vaccine rollout.
Make no mistake, however; fraudsters don't launch their campaigns only in the wake of public health emergencies or global events. The European Commission recently conducted a survey on consumers’ experience with fraud and scams and found that over half of the surveyed Europeans had experienced at least one of the types of scams they were surveyed about in the past two years.
Fraud comes in many forms, and we’ve rounded up five common schemes where con men try to trick victims out of their money at pretty much any time of the year and regardless of what’s making the news. We also share a bunch of tips on how you can avoid falling victim to the ploys.
Online shopping and auction scams
One of the many ways scammers like to target unsuspecting victims is through shopping scams. During the pandemic, there has been a surge of these scams — especially due to the shortage of certain goods, such as face masks and hand sanitizer. More broadly, however, using a sophisticated design that may come complete with a stolen logo, fraudsters will create a fake retail website masquerading as a reputable vendor, and offer luxury products from famous brands for ridiculously low prices.
However, once you make an order, you’ll either receive a counterfeit product or nothing at all, or worse: if you shared your credit card info, the criminals could rack up charges on it. Fraudsters have also taken to social media and started offering their goods there. Another similar tactic cybercriminals use to defraud victims is the auction scam. The fraudsters will create a bogus auction offering an item they don’t have, or copy a real listing, and once the prospective buyer wins the auction and pays the allotted price, the victim never receives the product.
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To lower the chances of losing money to such scams, you should always do your due diligence and research the vendor you are buying from by looking through their terms of service and privacy and return policies. You should also try to find reviews from other customers who have ordered from the website. If the vendor is asking you to share too much personal information, that should immediately be a red flag. Perhaps the best and safer advice would be just to purchase the product from a reputable vendor with a proven track record.
Money mule scams
Money mule scams can take various forms; however, the goal of the criminals behind them remains the same – to move money from illicit activities without being traced. To achieve their mission, the crooks will target their victims using various means – enticing them through work-from-home jobs, which isn’t an outlandish concept considering the current pandemic situation, or using online dating services to cultivate a relationship. Once they’ve earned the victim’s trust, they will send them money or a check and ask the victim to send it to someone else. There are various outcomes; depending on the scam, you might submit a fake check that will initially clear ... but then bounce and your bank will ask you to repay it, or you may be moving money for a criminal element and you might find yourself in legal trouble.
The advice, in this case, is simple: if the remote job in question entails transferring money for the client to purported clients or contractors, don’t accept it; the risks associated with accepting such jobs online far outweigh any benefits. If your online love interest tries to coax you into sending money somewhere on their behalf, you should be suspicious and refuse to do so, especially if you’ve only ever met them online; romance scams abound and some victims blinded by love have ended up losing their life savings and in some cases had to face legal charges.
Lottery and prize-winning scams
Lottery and prize-winning scams, which fall under the advance-fee fraud category, usually start with the potential victim receiving an unsolicited email, phone call, or text message claiming that they won a large sum of money or some kind of a luxury prize. The message will include pressure tactics telling the victim that there is a limited time to respond and claim the prize, but to do that they will have to pay a fee that covers taxes or shipping costs, or other imaginary charges. Since the competition is bogus, the victim won’t receive any of these “winnings” after paying the faux fees.
Alternatively, the victims may be solicited to take part in a competition or lottery with astronomical prizes and they are told that they can increase their chances by paying for secret tactics or more draws. The only result, however, will be the victim getting scammed out of money. It's also worth noting that U.S. citizens partaking in foreign lotteries may be violating federal law, so besides losing money to a scam they could also be facing legal trouble.
To avoid losing your hard-earned money to such scams, you can enable a spam filter, which should prevent most of these scammy emails from making their way into your inbox. If some of these emails do make it through the cracks and you are aware that you didn’t sign up for any contest or lottery, just ignore them and mark them as spam. However, if you’re still interested in reading through them, you should look out for the signs we’ve mentioned earlier, such as additional charges to claim your prize or winnings. You can also research the company or promoter claiming to be behind said competition; if it’s not legitimate you’ll find either little to no information about them, or complaints by the victims that fell into their trap.
These scams read their ugly heads especially – but by no means only – during the respective tax seasons in various countries. However, cybercriminals don’t use one uniform method; rather, they resort to multiple flavors of tax fraud. One popular tactic is to use phishing emails to impersonate the local tax authority, through which they try to coax sensitive personal and financial information from their intended victims, which they can use to commit financial and identity fraud. The crooks behind such attacks may try to trick you by claiming that you made a mistake when filing your tax return, or use scare tactics and threats by claiming that you have an overdue tax bill or will face penalty payments if you do not act promptly.
RELATED READING: Did someone file your taxes before you?
There are multiple ways you can protect yourself. If you receive an email purporting to be from your local tax authority, the easiest way to check if it is real is by contacting your tax authority directly to verify whether the email was sent by them; one telltale sign could be that you receive a notification about a tax return you did not file. If you receive a suspicious call laced with threats, demand the agent's name and identification, and again verify it with the relevant authorities. It’s worth noting that a real agent probably wouldn’t use any type of threats and would just inform you of any mistakes on your part.
Investment scams are usually known for promises of high profits and quick returns, or “certified” hush-hush tips that will make you enormous amounts of money. Although the offers will vary on how you’ll get rich and how high your return on investment, the key message will remain the same – multiply your investment quickly and easily. Fraudsters employ various strategies to con victims out of money, such as Ponzi schemes, cold-calling their victims, or pump and dumps.
Whichever trick the conmen try to pull, it usually starts off by opening a line of communication, for example by email. The miscreants will tout a great deal offering you a chance to make tenfold on your initial investment, or they may impersonate a representative from a real investment company; alternatively, the investment can be real but the recipient of the money will not deposit it. In any case, the only people getting richer from this scheme will be the criminals.
First of all, it's prudent to remember that there is no guaranteed investment or method that will make you easy money. If an offer like that makes its way to you and piques your interest, you should definitely investigate it by looking into the offer and the company associated it with it. Even if both the investment and company prove to be real, you should also verify the identity of the person offering you the deal.
Unfortunately, all manner of cybercriminals aren’t going anywhere anytime soon. However, the good news is that by remaining vigilant and always verifying all the available information and performing your due diligence, you can spot scams from a mile away. To paraphrase a well-known Russian proverb, only trust after you verify.