The Internet harbors a haven of online financial scams. Accounting for an estimated $21 billion in losses each year, online financial scams wear a variety of crafty disguises. Among the most successful frauds are six popular ploys to avoid.
The cyber-con courtship
For con artists, online dating sites double as a trove of potential victims. A press release, issued by the U. S. Federal Bureau of Investigation (FBI), showed a high incident rate of women over 40 being conned by men overseas. These cyber Romeos work on their prey for several months before revealing the ultimate goal.
Online protection tip: Regardless of how long you’ve been communicating or courting someone online, never provide financial assistance, be it accepting a check or ‘lending’ money.
A charitable scam
Con artists use catastrophic events to evoke the sympathy scam. Following the devastation of Hurricane Sandy, the 9/11 attack on the Twin Towers and the Boston Marathon bombing, perpetrators developed fake websites and email solicitations. These impostors are even turning to social media to advance their financial scam.
How to avoid this online financial scam? Make direct donations to foundations and charitable agencies that you are familiar with, only.
Using a letter that appears to have been sent by the U.S. Federal Trade Commission (FTC), fraudsters send small business owners an email, reporting that consumers have filed complaints against the entity. In turn, the unsuspecting proprietor clicks on the link, highlighted in the email to review the complaint, only to be hacked of any confidential information.
Maxim: If you have never corresponded to a government agency or company and out of the blue, receive an email, never click on any links or open any attached files. Instead, follow up with a phone call to verify the communication’s authenticity.
The tax trickster.
In 2012, the U.S Internal Revenue Service paid $4 billion in tax refunds to fraudsters. According to Carol Kando Pineda an attorney with the Federal Trade Commission (FTC), tax-related ID theft transpires one of two ways: an identity thief uses the tax information to secure a job or file someone else’s tax credit.
How to avert tax id theft. Because security breaches transpire anywhere online, avoid the temptation of downloading or using any “free software” to file your taxes. Tax applications generally have adware programmed into to the software.
Note that the IRS does not customarily initiate contact via email or by phone. In the event a tax payer suspects that he or she is a victim of fraud, first notify the U.S Internal Revenue Service at 800.908.4490.
The rental racket
Renter beware of online rentals ads that appear too good to be true. This online scam involves a prospective renter, sending a money order as a security deposit for a home, apartment or even a vacation rental. Once these rental racketeers receive the untraceable funds, they disappear.
Maxim: In terms of renting property, never send cash without seeing the property and checking the landlord and or/ property manager’s reputation.
The ‘official’ website sham
From popular brand names to government fraud sites, the most successful online scams involve elaborate web design. These impostor websites were designed with one purpose in mind: to commandeer consumers’ personal identification.
Since the Patient Protection Affordable Care Act went into effect on October 1, 2013, there’s been a rash of fake websites, designed to resemble the official federal Health.gov portal.
The loan shyster
From automobiles to pay day loans, borrower beware of online lending sites. Instead of these lending sites helping consumers secure a loan, these sites aggregate personal information to sell to identity thieves.
Avoid inputting personal information online when applying for a loan, specifically on unknown company websites.
Please share any situations you’ve had involving an online financial scam.