The internet and the various devices that have become a part of our daily lives have given cybercriminals more access to our data, arguably making fraud easier than ever. Though things like online shopping or using data apps should be fun, the ever-present threat of fraud always necessitates vigilance.
Prevention is critical because it's so hard for victims to recover stolen funds or details once a fraud has occurred. So, to help you protect yourself and your family against online fraud, this article details some of the most common fraud attempts, the techniques that fraudsters most commonly use, and how you can defend against them.
What is Online Fraud?
Merriam-Webster dictionary defines fraud as deceit, trickery, or deliberately misrepresenting something "to induce another to part with something of value." Theoretically, online fraud is when this criminal act takes place on the internet or using some kind of technology.
However, the definition of online fraud is slightly more nuanced. While attempts to emotionally manipulate users with social engineering tactics are not uncommon, online fraud can also include sophisticated hacking techniques, viruses, and malware such as ransomware.
The various techniques fraudsters use make online fraud hard to detect. When coupled with the internet's inherent anonymity, retrieving stolen information or funds can be near-impossible. In addition, almost as soon as certain online fraud techniques are publicized, cybercriminals find workarounds that render prevention tactics outdated.
The Most Common Types of Online Fraud
First, let's look at the types of online fraud that result in the most significant overall losses, according to the FBI…
Romance Scams - Love is a powerful emotion, which is precisely why fraudsters use it to their advantage. Cybercriminals create fake personas on dating websites or social media to reach out to individuals seeking romance and affection. After tricking their target into believing they have a genuine connection, they manipulate the victim's dedication to them by asking for money or gifts. In 2022, 70,000 Americans fell for romance scams, making them by far one of the most common online frauds.
Phishing - One of the oldest online frauds, it's a testament to how well it works that phishing is still as common as it is. Usually, phishing occurs through email, with a message made to look like it's from a trusted source. This email may ask you to update your information so fraudsters can steal it, click a link that infects your device with a virus, or enter your card details to win a prize.
Ransomware - A type of malware, ransomware allows fraudsters to take control of your device and hold it at ransom until you surrender information or payment. Ransomware is one of the most devastating frauds to fall victim to because you can lose all the data stored on your device, your details, and your money. The fraud element of ransomware usually occurs when victims are tricked into downloading it through a phishing email or malicious link.
Charity and Disaster Fraud - The world can often be a scary place, and charities and the people who donate to them do their part to make it better. This is why charity scams are some of the most pervasive and deplorable, praying on the goodwill of unsuspecting individuals. These frauds often occur during times of disaster worldwide, using false collections on social media or through crowdfunding pages. In many cases, victims of charity fraud may not even know that their money didn't get to the people who needed it.
Holiday Scams - Similar to charity fraud, which often occurs in times of high emotion, the holiday season provides the perfect opportunity for fraudsters to prey on internet users. With the increased number of transactions occurring online as people rush to buy gifts, scammers set up fake websites populated with products they do not intend to deliver in order to collect payment and address data. Such crimes cost victims $281 million in 2022.
Elder Fraud - Finally, rather than being a specific method of fraud, elder fraud constitutes any of the above attempts when explicitly done to an older member of society. Elder fraud is common due to social isolation and a lack of digital literacy, which makes it more likely victims will trust scammers and do as they say.
How to Spot an Online Fraud Attempt
Understanding the types of online fraud you might fall victim to is the first step in understanding how to prevent them. However, as techniques change over time, not all fraud attempts will look the same.
For example, a job offer scammer may require a lump sum payment from you for your application to be considered, or they may ask for a CV for use in later identity theft. This is why the next step in avoiding falling victim to fraudsters is to look at the broad yet unchanging methods that underpin almost every scam attempt. These include:
Generative AI
A novel tool but one that's becoming all the more useful for scammers, AI is now at a point where it can generate fake photographs and even videos that are almost indistinguishable from the real thing. As such, spotting AI-generated content when fraudsters use it can sometimes be just as tricky as spotting fraud itself.
In general, you should look for photos that seem overly 'perfect,' and if you're unsure, use a reverse image search function. Fake dating profiles commonly use AI photos, so don't hesitate to investigate if something feels off.
Spoofing
Spoofing is a technique commonly used in phishing, charity, and holiday frauds, as well as employment scams. It involves creating fake websites, email addresses, or phone numbers that look similar to the real thing. For example, instead of ceo@companyname.com, you may receive an email from ceo@componyname.com.
Spotting spoofed information is an easy way to know something's wrong, but you'd be surprised how often these things fly under the radar. Make a habit of being vigilant when checking your emails every morning or visiting online stores, and always check a company's or individual's details against those available publicly.
Robocalls
Getting calls from robots, even legitimate ones, is annoying. Most people will hang up when they realize there's no one on the other end of the line. However, even by answering a fraudulent robocall, you've proven to fraudsters that your phone number is legitimate. This gives the go-ahead for humans to start calling you and initiating a scam.
Because it's challenging to know a robocall before you've answered it, a low-trust policy is best. If you get a call from a withheld number or a number you don't recognize, don't answer. You may miss some important calls, but any legitimate caller will be happy to leave a message and have you call them back later.
Emotional Manipulation
By far the most common tactic when dealing with fraudsters, these individuals will try everything to get what they want from you. Depending on what they think will get you on their side, they may be incredibly kind, and if they can sense you're hesitant, they may try to scare you. In the case of ransomware, they may even threaten to release data from your device to your friends, colleagues, or on social media.
This behavior can be difficult to distinguish from passionate conversations in emotional situations like romance scams. So, establish clear boundaries, and be wary of any attempts to 'speed up' your actions by individuals who initiated contact online or over the phone. Those who've contacted you under legitimate pretenses will be fine waiting for you to verify their credentials.
How to Prevent and Protect Against Online Fraud
Now that you know how to spot an online fraud attempt, there are a few things you can do to establish extra defenses against fraudsters.
Update software ASAP - Hackers and those intending to use malware and ransomware against you often gain access to your device through outdated or unsatisfactory software protections. Developers release patches to prevent this, so if you still need to set up automatic updates, check and manually update your devices' software regularly.
Limit the information you put online - In the age of social media, this can sometimes feel counterproductive. However, if a fraudster intends to target you, they will use everything they can to fool you and get you on their side. Do not post about companies whose products you use, hotels where you stay, or devices you own. If you want to post these things, make sure your social media profiles are private.
Check and double-check - Reverse image search tools, company directories, and sites that list fraudulent numbers, like The Economic Times, are all at your disposal. Make sure to use them to check the information potential fraudsters feed you. Don't bother calling a fraudster out if something doesn't add up. Cease contact immediately and block their contact.
If something feels off, it probably is - Getting a message, email, call, or text out of the blue from someone you don't know should set alarm bells ringing. Don't reply to unsolicited contact; send any strange emails straight to your spam folder. If you're shopping online or donating to a charity, listen to your instincts and, though it may not be polite, lead with suspicion.
In Conclusion…
The digital age has made it much easier for fraudsters to get the best of their victims, providing myriad ways to reach out to you and disguise their true intentions. Despite this, there are some reliable ways to prevent scammers from taking your money and data.
When it comes to online fraud, knowledge is power, and prevention is key. Try to learn about common frauds you may encounter, and protect yourself by updating the device software, setting your social media profiles to private, and blocking any suspicious contacts.
Don't hesitate to tell your friends and family about potential frauds you've come up against or share the details online to prevent others from falling victim to the same methods. With a concerted effort, we can defend against fraud and make the internet safer.
Sources and Resources
- https://www.pingidentity.com/en/resources/blog/post/everything-need-know-online-fraud.html/
- https://abilitynet.org.uk/factsheets/internet-scams-and-how-avoid-them
- https://www.fortinet.com/resources/cyberglossary/internet-fraud
- https://www.experian.com/blogs/ask-experian/most-common-types-of-fraud/
- https://www.tripwire.com/state-of-security/top-scam-techniques-what-you-need-to-know/
- https://assets.publishing.service.gov.uk/media/5a7ad8c2ed915d670dd7efad/fraud-typologies.pdf
- https://financialcrimeacademy.org/fraud-detection-methods/
- https://www.victimsupport.org.uk/help-and-support/keeping-safe/protect-yourself-fraud/
- https://www.actionfraud.police.uk/individual-protection
- https://www.centralbank.net/personal/security/security-news/seven-tips-to-avoid-online-fraud/
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