Nobody wants to become a victim of an online scam, but with ever-evolving methods, scammers are constantly trying to stay one step ahead of their potential victims. According to the FBI annual Internet Crime Report, the Internet Crime Complaint Center (IC3) received 351,937 complaints of online fraud and scams in 2018 — an average of more than 900 every day. Internet-based exploitation, fraud, and theft were the most frequently reported crimes, creating a massive $2.7 billion in financial losses.
The following are some of the most common online scams reported to the IC3 in 2018, and their advice on how to protect yourself from becoming a victim:
Auction Fraud — The seller typically requests funds to be wired directly through MoneyGram, Western Union, or bank-to-bank wire transfer, ensuring that the funds are not recoverable and there’s no recourse for the victim. The item is never sent. To protect against auction fraud, always check out a seller’s feedback, be wary of sellers or buyers who live out of the country, and be wary if the seller only accepts wire transfers or cash.
Counterfeit Cashier’s Check – A buyer offers to buy an expensive item, such as a vehicle, and pay with a cashier’s check, which is thousands more than the price of the merchandise. The scammer tells the seller that the excess is to be forwarded to a third party to handle shipping costs. The seller is told to cash the cashier’s check and, once the check clears, wire the excess funds to a “shipping agent”. When the cashier’s check is returned as fraudulent, the seller is on the hook for the lost funds. When accepting cashier’s checks for any payment, ensure that the dollar amount is correct, and do not accept one that includes “excess” funds, or is from outside the country. Contact the financial institution the check is from on to ensure it is legitimate, and make sure you get the contact information from a reliable source – not from the check itself.
Debt Elimination Schemes – Scam websites advertise a legal way to settle mortgage loans and credit debt by making a payment of $1,500-$2,500 along with supplying personal information, loan information, and a power of attorney, in exchange for the issuance of a bond that allegedly will legally satisfy the debt. This is typically a fishing scheme with a high risk of identity theft. Before divulging any personal information for a deal that sounds too good to be true, contact eLegitimate.com to find out if they have Better Business Bureau accreditation and are a legitimate company.
Online Affiliate Scams — Some fake web-based “international drop-ship companies” advertize for affiliate opportunities to sell high-end electronic devices, such as home theater systems and plasma television sets, at significantly reduced prices, for a fee. The company instructs the affiliate to place online ads and auction listings and to forward fees via wire transfer. The company never ships the merchandise, and the affiliate is out the money they’ve forwarded, as well as facing legal action from their buyers. Always be cautious of exaggerated claims of earnings or profit, and do not pay upfront for instructions or products.