There was a viral video on Youtube a few years back featuring World Of Warcraft characters singing a song called “The Internet is for Porn.” Besides pornography, the Internet is also filled with scams. Ranging from the run of the mill Nigerian 419 email scam to fake products and services to tricky email titles aimed at getting you to download malware, the Internet has become a veritable playground for hustlers from all corners of the world. Indeed, according to Reuters, around $559 million was lost in 2009 alone due to Internet-based fraud. While we cannot possibly list all the past and present scams inflicted on the internet, we have assembled a scam prevention guide that organizes these scams into thematic categories. By listing their common features, we hope to educate web users on the warning signs certain scams possess and to exercise caution whenever they recognize these distinguishing features. Listed with each category are certain actions users can take to prevent being victimized.
Scams that prey on Greed
Greed, being one of the seven deadly sins, is a very common human feature. Due to its universality, online scams focusing on the target’s greed is quite lucrative for scammers and hucksters the world over. This family of online scams include 419 email scams (419 is the Nigerian Penal Code number for fraud) promising millions to intended targets who fork over “bank fees” to “redeem” such promised amounts. High Yield Investment Program (HYIP) scams involve software-driven Ponzi schemes where victims refer friends and family to “invest”–all ridiculously high yield “investment income” is taken off the deposits of newer members. Stock pump and dump newsletter scams trick the newsletter reader into buying stocks that are supposed to be on the verge of a “breakout.” The newsletter buys the stock at very low prices and proceeds to dump the stock after the newsletter victims have bought up (and driven up the prices of) the hyped stock. Finally, one other common greed-based scam is the free giveaway email. This email notifies the receiver that he can claim a free iphone or other valuable gift. All the receiver needs to do is to pay a claim fee or send money for shipping and handling. Of course, the promised item is never delivered.
Greed-based scams all share the common feature of huge returns from very low initial investment or “no money down”. Whenever you notice that there’s almost no money or effort needed from you in order to claim money, be careful. If it’s too good to be true –it probably is. Avoid anything where you have to pay money to claim money. Avoid financial advice from companies that aren’t well known or that use partial names of famous finance companies. Run searches for the company name or the email address that sent you the offer. Normally, if the offer is a scam, other people have already complained or posted a complaint online.
Scams that prey on classifieds and auctions
Budget-conscious shoppers, due to their relentless search for a “good deal” often make for ripe and easy pickings for scammers that know how to game online auctions or write compelling online classifieds. These scams often involve listing really cheap products on Craigslist, Ebay, and other sites, taking payment, and failing to deliver the item. The scam works because the scammer’s prices are slo low that victim won’t feel a big need to ask for a refund since the list price is so low. The scammer is banking on the fact that the victim will feel that asking for a refund won’t be worth the time and effort. In order for this scam to be worth the scammer’s time, dozens of items are put on auction and several auction/sales are held to maximize the number of victims. Another variation of this scam is to trick the buyers into confirming Craigslist or Facebook account verification through SMS. The scammers then turn around and sell the phone-verified accounts to people who want to spam Craigslist or Facebook.
To prevent getting victimized by low price scams, always insist on using an escrow service. Escrows protect buyers by giving them the opportunity to inspect delivered goods before releasing money. To prevent SMS verification-related scams, don’t respond to the “seller” once you find out an SMS “verification” is involved. This will save you time and aggravation in addition to helping minimize the amount of spam on the Internet.
Business transaction-related scams
The target victims for these types of scams are webmasters, online publishers, and other entrepreneurs. One very common form of this scam is the “domain appraisal” scam. Website or domain owners receive an email indicating that the sender wishes to buy the website or domain usually at a very high price. However, the website/domain owner has to get the site or domain “appraised” by one of the “appraisal companies” listed in the email. After paying for an “appraisal”, the domain seller tries to contact the “buyer” but the latter has disappeared. Similarly, the fake SEO services scam involves email solicitations promising high search engine rankings in exchange for SEO “services” which are described in seemingly “technical” detail. The online business owner pays but the services are never delivered.
The common feature of online business-related scams is that they involve spam solicitations. To prevent being victimized, avoid using services that are “marketed” via spam. That should take care of most of the problem. If you do want to go ahead with the domain sale or SEO service, run a search on the email address or website domain used in the email. If they are scammers, you can be sure that there will be complaints on the net about the “domain appraiser” or SEO company. For SEO companies, run search for the term “Search Engine optimization” and look at Google’s rankings for that term. If the company doesn’t appear on the first page, they aren’t worth your time and money. Finally, post a “need more info on” discussion on webmaster forums to discuss the particular SEO company or domain appraisal company. If they are scammers, victims will surely come out of the woodwork to share their stories.
All phishing-related scams share one common feature—they lure you to a site you trust, whether it is your bank or a domain registrar and create an opportunity where you are compelled to enter login information. Once they have captured your personal information, they login to the real finance or domain registrar and proceed to make withdrawals or transfer your domain. Phishing scams are all about misdirecting and abusing your trust. They differ only in form. The more common phishing scams involve sending fake notices: server notifications, facebook or other social networking invites, domain registrar notices, online banking notices, and online payment (paypal, alertpay, epassporte, etc) notices.
To avoid becoming a victim of phishing scams, observe the following rules. Be suspicious if your domain registrar or bank emails you. Try to remember if you have given them permission to email you. Avoid emails from banks and institutions you don’t use. Check for images in the email. Many official emails have images that come from the official site. Don’t click the links immediately after you open the email, hover over the link and see if it displays your bank or domain registrar’s site. Look at the extension. Is it a .com? Read the information, does it ask you to login? If so, does the link have a secure page that starts with an https:? When you click the link, make sure your antivirus/malware detection software is turned on. Keep an eye on any alerts. Leave the page at the earliest sign of suspicious activity on the site or if your software sends you a warning.
For scams to be effective, they have to target strong universal human emotions. We already discussed scams that target greed, misplaced trust, and the need for a bargain. The final category of online scams focuses on human desire—the need for companionship and sex. These scams come in two major forms—scams that get you to join dating sites by diverting you to the sites and scam dating sites that promise something and never deliver. The most common dating site diversion scams are run by spammers that place “looking for someone” ads on Craigslist, plentyoffish, and other huge sites that have dating classifieds or dating listings. These fake ads often come with a picture and a fake come on and fake “interests” and otherwise fake bios. When a victim emails the contact information listed in the ad, the spammer will initiate an email “conversation” with the intended victim. Once the victim sufficiently trusts the other party or wants to see more pictures, the spammer sends the victim a link that goes to a dating site. The scamming spammer gets paid for every victim that signs up for a seemingly “free” account. These “free” accounts aren’t free at all as you can see from how scam dating sites work below.
Another place frequented by dating site spammers/scammers are webcam or chat areas on Yahoo and other free networks. They run profiles with pictures or automated chat software that tries to chat up real members and send them links to dating sites. Other spammers even use fake webcams to entice people to click on dating site recruitment links.
Not all dating sites are scams. Most are legitimate businesses. However, based on litigation, pending and resolved, here’s a general profile of how dating site scams work. Dating site scams have three parts—fake profiles to entice victims, automated or semi-automated messages when victims sign up, and automatic membership rebills. Once a person has been tricked into signing up to a fake dating site for “free”, employees or software send the person messages indicating how they are interested in the victim’s profile and would like to know more about them. The website gives members a certain number of “free” credits they can use to contact other members. Victims then use up the “free” contact credits responding to the fake messages sent by dating site employees or software. At this point, the victim can use his/her credit card to buy another batch of credits, so they can continue communicating with other “members.” The dating site is configured to continue billing the victim’s credit card on a monthly renewing basis until the victim intervenes and stops the rebills.
To avoid becoming a victim of dating site scams, follow these tips. Be very suspicious of links sent to you by someone who posted an ad at a “free dating” site. If their correspondence includes links to dating sites, webcam sites, or porn sites, delete their emails and ignore them. Use a fake email from mailinator.com or other mail masking system so your real email isn’t spammed. If you would like to join a dating site, exercise caution when you see naked pictures on the front page of the site or if there’s any indication that there’s “hundreds” of people “ready for sex” in your area.
If you join a dating site, and you get a very quick email right after you have joined, try to see if it is a template email. Does it indicate the sender read your profile? Look up their profile. Does it look real or consistent? Email back and see if their response makes sense. Don’t sign up when your ‘credits’ run out if you have any lingering suspicion that the people you’re communicating with are fake.
Scam prevention software
Besides, the scam protection tips outlined above, there are software-based solutions against scams. These applications prevent you from being scammed by recognizing attack sites (downloaded from a database), blocking the loading of such sites, and warning you of possible phishing sites. All are bundled with antivirus and security features. Download antivirus security applications today to get automated help avoiding online scams. These applications feature the following:
Detecting attack sites—these applications actively prevent your browser from entering suspected attack sites. If you run a search, they also place a notice next to any suspected attack site that appears on a search results list.
Blocking phishing sites—these applications will give you a warning if you have mistakenly or intentionally clicked a link to a site that doesn’t appear to be what it claims to be. This can definitely prevent you from becoming a victim of identity theft.
Proactive prevention involves both vigilance and software assistance
Scammers have definitely made the Internet a much more dangerous place. Not only do these fraudsters target your money, they also target your emotions as well. While scams are often not obvious and easy to spot, we hope that by isolating common features of these scams, providing you with prevention techniques, and always keeping your malware/antivirus applications running and fully updates, you can avoid becoming victimized in the very dangerous digital jungle the Internet has become.