The Most Common Financial Scams Found Online

Internet scams evolve quickly and are a multi-billion dollar industry. They tug at heartstrings or target those who are vulnerable, and there is often no way to catch the people behind the scams. Keeping abreast of the types of scams and learning how to safeguard yourself against them can save you both heartache and financial hardship.

The Romance Scam

Romance scams often use online dating websites, but they can also use social media or email to initiate contact. To avoid the romance scam, never share financial information or send money to someone you do not know personally.

The scammer will create a fake profile designed to lure in victims. They often present themselves as trusted citizens such as military personnel, aid workers, or other false identities. The scammers move quickly to create a deep personal relationship and want to establish contact outside the original platform, such as via phone, email or instant messaging. These scam artists are masters of manipulation. Once they have gained the trust of their victims, they will begin to asks for money or account information. They may do this subtly or directly, often using a heart-tugging story of some family emergency.

They may also ask for pictures, usually of an intimate nature. The images can later be used to attempt to blackmail the victim if the victim does not continue to supply them with money, or threatens to get authorities involved.

It is hard to know how many people fall for some version of this scam because victims often feel deep shame and sometimes frightened. They are hesitant to report the fraud because of embarrassment for having fallen for the scam. Other victims continue to hold out hope that they were not taken advantage of and that the situation will somehow resolve.

Imposter Scams

Scams of this nature remain near the top of the FTC’s list of most successful scams year after year. The overall nature of the fraud revolves around someone pretending to be a friend or loved one in need. Generally, the scammer has hacked someone’s email or social media account. They then reach out to the person’s contacts and express an immediate need for help.

Depending on who they are targeting, they may ask for loans or money to be wired or transferred because of an emergency. There is usually a promise to pay the money back in a short time.

Like other scammers, these people are masters of manipulation who can learn quickly how to tug at heartstrings. They often invoke children in need to motivate the victims to rush to their aid with monetary support.

IRS Scams

The IRS scam has also been around for some time, but it continues to evolve. The most disgusting thing about this scam is that those most likely to fall for it are the elderly. The victim receives a phone call or an email from someone posing as an IRS representative. The victim is often asked to give their social security number as confirmation and then told that they owe a specific amount of back taxes to the IRS.

They are then told that if they make a payment immediately, they can avoid thousands of dollars in penalties and fees. If the scammer is operating via email, there will be a fake link in the email to send a payment, and the site will often look legitimate. The same scam happens via phone calls as well and victims give bank or credit card information to take care of the balance.

Like so many other scams, it is suspected that this scam is also underreported. Victims either blame themselves for falling for the scam or they never even know they were scammed. It is often only discovered with another family member realizes the person is suddenly struggling financially.