3 ways scammers are cashing in on the cost of living crisis

There are no two ways about it, scammers thrive in times of uncertainty. Just as they took advantage of their victims’ fears during the pandemic, they’re now doing the same with the cost of living crisis. As the situation worsens, many individuals are falling for a host of new scams that prey on their financial anxieties. What’s more, these scams often involve aspects of social engineering, making them increasingly complex and difficult to detect. However, as part of Cyber Security Month, our fraud prevention team has identified the most popular online scams currently doing the rounds so you can keep yourself, and your loved ones, safe.

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Investment scams are often fronted by self-proclaimed "advisors" who promise their victims big payouts, fast cash, or guaranteed returns in exchange for an investment. If you’re presented with an investment opportunity that assures high returns for minimal risk, be cautious. In 2021, the amount of money lost worldwide in investment scams tripled to $1.67 billion. So, if it sounds too good to be true, it’s because it probably is. 

1. An investment scammer hooks their victims via an email or an online ad promoting an attractive investment opportunity. 
2. To learn more, the target is prompted to ‘sign up’ by entering their personal information. 
3. A few days or even hours later a ‘financial advisor’ will contact the target either via email or phone. Here, they encourage their target to transfer a sum of money into either: an existing bank account, a newly opened account, or via an investment platform or online banking page sent across by the advisor.
4. Once the money enters the account, the advisor may let their target withdraw money from the account so that it looks legitimate. However, shortly afterwards, they’ll empty the account and disappear with the money.

In general, investment scams have three telltale signs:

1. A "too good to be true" offer that promises zero risk and high gains touted by a fictional advisor presenting themselves as a wealthy, international business person.
2. A link to an alleged trading platform which may look legitimate but is actually fraudulent. These platforms often include real-time values of different cryptocurrencies or stocks, various logos, and the website design frequently looks professional. 
3. Occasionally, investment scammers disguise themselves as potential love interests and operate across different dating platforms. This is known as "pig butchering." Here, the scammer first connects with their target on an emotional level before pressuring them to send them money or cryptocurrency.  

The takeaway? If you’re interested in investing, only do it on your own terms, across a trusted platform, or via a bank.

A staggering $2 trillion dollars is laundered globally every year—often by unsuspecting accomplices acting as "money mules." Money muling involves the storing or moving of dirty money from a criminal to a victim’s bank account and out again. By getting a mule to move their money on their behalf, criminals make it more difficult for authorities to track the flow of their laundered money. However, if caught, the money mule may face legal charges as they are technically participating in a crime which could involve anything from drug and human trafficking to terrorism.

Thanks to the current cost of living crisis, many individuals are facing increasing economic pressure. Money mule scammers use this to their advantage by marketing their scam to those in desperate financial straits as an easy way to make some extra cash. However, their targets rarely understand the grave legal implications of participating in such a scam—with many not realizing they are participating in a scam at all.

When attempting to identify a money mule scam, look out for one of these four signs:

1. An individual you’ve never met in person, asks you to accept a sum of money and then forward it on to one or several individuals. They may tell you that you can keep a share of the cash as compensation for proceeding with this transaction.
2. Likewise, if this individual asks you to open a new bank account in either your name or in the name of a company in order to receive or transfer money, this is also likely a money mule scam.
3. Online ads or emails that use buzzwords such as instant payments, fast, legit, 24/48/72h, and low risk, or go along with images associated with wealth.

Any ad that asks you to “sell” your bank account should absolutely be avoided as it’s highly likely to be part of a scam.

In times of hardship, like the current global crisis, people might find themselves desperately searching for a new job or a way to make some extra cash. Job opportunity scammers take advantage of individuals in financial distress and so far have taken millions from their victims this year. Such scams establish contact with their victims through many different means including:

• Fake job offers on well-known trusted platforms
• Fake business emails
• Ads on social media
• Ads in newspapers, on TV, or on the radio

These job offers and ads will promise a lucrative job opportunity but their real purpose is to gather their target’s personal information and gain access to their finances.

Job opportunity scams rely heavily on complex social engineering techniques to mislead their victims. These are three of the most common job opportunity scams:

To ensnare their targets, scammers often set up fake app testing job ads. Here, they promise attractive bonuses to their victims for opening an account on a trial basis and in doing so, take their private information including passwords, email addresses, user names, and IBANs. Because the victims of such scams believe they’re applying for a legitimate job, they’re more trusting and therefore, more readily disclose their private data.

In a pyramid scheme, fraudsters reward their victims for enrolling others into a business that often offers a non-existent product. In doing so, a pyramid structure is created in which the base of the pyramid grows rapidly as more and more victims are recruited to be part of the fraudulent scheme. In a bid for legitimacy, some schemes offer a line of dubious products or distributorships which the recruits are then encouraged to advertise to their networks. 

The more recruits an individual onboards into the scheme, the higher their salary. However, in addition to the fact that the scheme may be attempting to sell a non-existent product, pyramid schemes often require high entry fees and individuals further down the pyramid rarely make any money.

Regular job offer scams create a duplicate of a legitimate company’s website and attach it to a similar-sounding domain name. From here, the scammers create a host of fake job openings on trusted job platforms which direct applicants to the fraudulent website. These jobs frequently offer a significantly high salary, vague job descriptions, and include unusual logo placements. 

Once an applicant shows interest, it’s common for the "job offer" to be made very quickly. Then, so as to look legitimate, they send their targets contracts they have to physically sign while requesting personal information including social security numbers and bank details. Additionally, scammers may ask for money for upfront background checks, job training, equipment or supplies. 

The best way to tell if you’ve discovered a job offer scam is to search online for alternative websites for the company you’re applying to. Here you can compare the websites, the details of the job offer, and the contact persons listed in the job ad.

At N26, we take security seriously. All N26 Mastercards are protected with 3D Secure technology, and if you spot any suspicious activity on your account, you can immediately lock your card right from the app, plus instant notifications on all account activity give you visibility and peace of mind. Visit our plans page to find the account that’s right for you.