If you’re one of those people who has never fallen victim to financial online scams or has never even heard of them, then you’re in the “lucky” category. During the first quarters of 2023 alone, some Americans lost more than $7 billion to fraud, which is 5% more than in 2022.
Scammers use sophisticated tools and techniques to lure their victims. They also know where to push emotionally, making people send money or even share sensitive information without questioning anything.
According to Kathy Stokes, the director of fraud prevention programs with AARP, “They have the money, they have the time, and they’ve got the playbook to get you into that heightened emotional state. It’s us against them.”
But what are some of the most common financial online scams to be aware of? And how to protect yourself and your loved ones? Let’s discuss below.
4 Financial Online Scams to Stay Away From in 2024
Here are some of the financial scams you don’t want to become a victim of and ways to safeguard yourself from them:
1. Phishing Scams
Scammers send out approximately 3.4 billion phishing emails daily, and their initial goal is to steal as much money as possible. Sometimes, they prey on people’s personal information, which can eventually help them steal even more money.
But what is phishing exactly? It’s the practice of sending fraudulent emails or text messages to trick people into revealing their sensitive data. There’s even vishing, where scammers call individuals instead of texting.
How to protect yourself from phishing scams:
- Don’t click on suspicious links in emails or texts, and don’t download any attachments.
- Never give out your personal information, such as credit card details or Social Security number, to individuals you hear from for the first time. No legitimate organization will ever text or call you with such requests.
- Reverse-search unknown phone numbers and email addresses on Nuwber to learn who is standing behind them.
2. Romance Scams
Romance scams aren’t unheard of these days. In fact, they are everywhere: on dating apps, social media, messaging apps like Telegram and WhatsApp, and even email.
In 2022, according to the Federal Trade Commission, 70,000 Americans lost $1.3 billion to romance scams. Here’s how romance scams work: a cybercriminal creates a fake account to lure unsuspecting women or men online. They try to make the relationship quick and start talking about falling in love almost immediately. They then ask for money and receive it, but the victim never hears from them again.
How to protect yourself from romance scams:
- Check the account of the person you’re in contact with for any warning signs. It could be an AI photo, a lot of posts with barely or no likes, or even no posts at all.
- Never send money to someone you’ve only talked to online, especially if you only text.
- Be aware of the warning signs, such as requests for specific payment methods, unusual communication with grammar errors, and refusal to video chat.
3. Charity Scams
If you’re a kind person who loves to help everyone without first fact-checking the details, then there’s a high percentage that you can become a victim of a charity scam. These scams are aimed at responsive, compassionate, and easily suggestible individuals who don’t think twice about helping a child in need or a stray cat.
According to estimates, charities lose 5% of their revenue to fraud every year. Little do some people know that their hard-earned money goes into scammers’ pockets instead of donating to a real charity.
Charity scams usually occur after natural disasters, during holidays, and during tax season. Awareness months (e.g., Breast Cancer Awareness Month) are also no exception.
How to protect yourself from charity scams:
- Always verify the charity before donating, even if the person on the other end of the line pleads for donations. It’s better to spend 5 minutes of your time at least Google the name of the charity than lose money.
- Don’t succumb to emotional manipulation to help people in need or save a dog. High-pressure tactics, lack of information, and suspicious payment methods are some of the giveaway signs of charity scams. If you really want to help, find the list of charities online and reach out to the one you want to donate to.
4. Employment Scams
Job seekers are especially vulnerable to scams nowadays. Such a simple task as finding a job can cost you thousands of dollars if you don’t know what you’re dealing with.
In 2023, fake job scams were one of the fastest-growing types of scams in the US, with 15,000 people losing $52 million to them. Some of the common giveaways of these scams are too-good-to-be-true offers, upfront fees, interviews via messaging apps, requests for money or personal information, and generic job descriptions.
In some cases, scammers impersonate real companies. They use the names of well-known organizations or businesses and create spoofed email addresses to appear legitimate in the eyes of job seekers. Unfortunately, some individuals fall for this, which results in them not getting the job in the best case.
How to protect yourself from employment scams:
- Research the company that contacted you. Check its official website and contact information, and read reviews on Indeed and Glassdoor to see what people have to say about the company.
- Verify job postings for detailed descriptions of responsibilities and qualifications. If the description is vague and has terms like “fast money”, “earn fast”, “no experience necessary”, or “unlimited earnings”, it’s better to proceed with caution.
- Check for professional communication. If emails or messages are unprofessional, with a lot of grammar or lexical errors, there’s a high chance that you’re dealing with a fake job offer.
Let’s Sum Up
Financial online scams are quite prevalent these days, with scammers using their best techniques and tools to trick individuals into sending them money or sharing personal information. Thankfully, some signs give them away, and more and more people are learning how to protect themselves.
Phishing, romance, charity, and employment scams are some of the most widespread rip-offs in today’s America. The only solution is to educate yourself and be aware of what’s out there in the digital space.
