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Online scams: how to spot fraud and stay safe on the web

Make sure you stay safe online by learning all you need to know on avoiding online scams with this handy guide.

7 min read

With so many of us relying on deliveries these days and choosing to shop online, it’s also important to learn to recognize potential online scams that trick people into handing over personal information. Don’t worry too much though—this article will guide you through a few things you need to keep in mind to stay safe online and remain vigilant while on the web, especially on social media platforms and private messaging services.

1. What is online fraud?

But first thing’s first, what is online fraud exactly? Well, the term refers to crime which takes place on the internet via well-known websites and mobile applications. Generally, it’s much easier for cyber-criminals to take advantage of individuals online rather than attempt fraud through face-to-face interactions.

And of course, internet fraud is big business: according to a report by the European Central Bank (ECB), fraudulent transactions actually account for €1.8 billion annually! Fortunately, there are ways to protect yourself. The very first step is becoming more aware of the common techniques used by criminals to defraud unsuspecting individuals.

2. Common online scams

Awareness allows you to have better judgement if ever faced with a scam, making you more likely to see through attempts. Although there are many forms of online scams, below are the top choices for cyber criminals.

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Purchase scams

During 2019, in Europe alone, e-commerce was responsible for an eye-watering €621 billion in revenue. With so much money floating around in cyberspace, it’s not surprising that criminals saw an opportunity to take advantage. One technique is the online shopping scam. These can exist in the form of an entire fraudulent website, or on legitimate listing sites, such as eBay or Facebook/Instagram marketplaces.

Both techniques entice eager shoppers into purchasing goods that often don’t exist—a fraudulent website, created for this purpose, will be designed to look like a genuine business, complete with items to browse, a shopping cart and checkout. One tell-tale sign of a malicious website includes a warning in the URL bar that reads “Not Secure.” This appears when the website owner has not purchased an SSL certificate, which means that the connection between the website and the end user is vulnerable to attack. Legitimate business owners know how important it is to protect their customers’ data by investing in this mark of trust, and therefore, this is something you should always look out for.

Phishing emails

Phishing is one of the most common forms of online fraud. Targeted individuals will receive an email, SMS message or phone call, appearing to be from a genuine source, like their bank or an online shop. The message will typically be designed to trick them into sharing sensitive information. For more information on phishing and how to avoid taking the bait, visit our in-depth guide.

Romance scams

Love is blind, providing an ideal opportunity for criminals to take advantage of those searching for “the one,” either on dating apps or social media. The online dating scam requires a lot of time and patience—here’s how it works: the scammer will pretend to be someone they’re not, creating an attractive profile and using fake images. After building trust with their victim, the criminal will make up a story, such as a medical emergency, encouraging the victim to send them money.

In the US, romance scams are becoming an increasing concern. The Federal Trade Commission reported over 21,000 cases totalling losses of $143 million for 2018, compared to $55 million in 2015. This particularly cruel crime exploits grooming techniques to lure vulnerable victims into fake relationships, mirroring the psychological abuse associated with domestic violence. Rather than falling in love, the victim falls into a trap.

The fake fundraiser

Most techniques are designed to play on people’s emotions, and to override their ability to make logical decisions. The false promise of love is one example, taking advantage of empathy is another. That’s exactly how the fake fundraiser online scam works. Cyber criminals set up an online fund-raiser, including a “sob-story” to pull at the heart strings and encourage people to donate to a false cause. However, there is no cause, and the individual(s) setting up the fundraiser plan to take the money for themselves.

Advance-fee scam

This is one of the oldest tricks in the book. Recipients receive an email from an individual asking for help to transfer millions of euros, pounds or dollars. The story depicts a wealthy individual whose funds are inaccessible due to complex legal issues such as civil war, government restrictions, and so on. Typically posing as a high-ranking official, they offer large sums of money to anyone who can assist them. Luckily, this kind of scam is quite predictable, and should be fairly easy to spot.

The key takeaway here is to be wary of malicious individuals attempting to steal your money.

“Get rich quick” schemes

“Get rich quick” schemes are abundant online and they usually promote high-paying, low-effort job offers. Criminals advertise fake job listings, looking to hook anyone who is desperately seeking work. In the hopes of starting a new, well-paid role, victims will hand over their personal information, only to have money or their identity stolen.

Whilst these scams were probably more obvious in the past (“click here to get paid €1,000 per day, working from home, with no experience!”), criminals are becoming more sophisticated. For example, LinkedIn has been targeted by criminals messaging people with fake job proposals. Blended with genuine recruitment opportunities, these offers may appear convincing to the untrained eye and are highly effective at drawing people in.

3. How to avoid online scams

As younger generations have been born and raised with the internet, you’d be forgiven for thinking online safety is second nature to them. Surprisingly, a report by the Federal Trade Commission (FTC) found that millennials are more likely to lose money to online scams compared to those over 40. With that in mind, what are the best ways to avoid online scams? Here are a few tips:

  • Familiarize yourself with techniques commonly used by criminals. It’s almost impossible for them to trick someone who knows what game they’re playing.
  • Do your research on people or organizations who contact you. Whether it’s a potential mate on a dating site, a recruiter on LinkedIn, or a charity representative asking for donations, it’s important to question their motives.
  • Always keep your personal information secure. You should be extremely cautious anytime someone asks for payment details, or your personal information.
  • Be careful when shopping online. Research the website if it’s unfamiliar and make sure the payment service is secure (for example, look for the padlock symbol in the URL bar). Where auction listings are concerned, look at each user’s registration date and previous sales or purchases. Additionally, using an online bank with extra security can add that much needed layer of protection.
  • Check your social media privacy settings. You can become a target for criminals if your personal information is clearly visible online, so check your settings to restrict which information is shared publicly. .
  • Be sceptical of deals and offers online. This includes job offers, discount codes, travel deals, free giveaways, or abnormally large discounts on expensive items.

4. How to report online scams

If you spot internet fraud, or you’re concerned you may have been a victim, it’s vital that you report it as soon as possible. Notifying the relevant authorities will hopefully lead to punitive action for those behind the scheme. If a genuine organization is impersonated in any way (for examples, a phishing email from PayPal), notify them directly—it’s in their best interest to investigate. In addition, contact the relevant fraud organization for your country.

Europol’s list of fraud reporting authorities:

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At N26, we take your security very seriously. We trust this article has added an extra level of awareness and security to your online adventures. However, if you think your account security has been compromised, please reach out to our dedicated Customer Support team immediately—they will be happy to assist you.

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