What is an Online Scam? And How to Defend Against It

Andrew Sanders
Posted: April 8, 2019

In 2017, the FBI reported that a collective 300,000 victims lost $1.4 billion due to online scams. The victims in these cases tended to be either relatively old or relatively young – in other words, people who may not have enough tech-savvy to understand how to see through what may seem like a fairly obvious falsehood. Even the most tech-literate people can still fall victim to online fraud, however.

Common Examples of Online Fraud

People often misrepresent themselves on the internet. If you don’t know this, then the world is a dangerous place for you, because there are reams of scams that you need to avoid. Here are some common ones:

  • Tech Support Fraud: Let’s say that you receive a notification that your computer is slow, broken, or infected with malware. You can fix it, but you need to pay a fee. This is tech support fraud, and it’s one of the most common scams there is. Even massive corporations are in on the game, with the retailer Office Max being forced to pay $35 million USD in restitution for a fraud that involved giving fake virus scans to their tech support customers.
  • 419 Scams: The number 419 refers to the section of Nigerian laws that deal with fraud, but the 419 scan itself is neither new nor unique to Nigeria. Its proper name is the “Advance Fee Scam.” Any variant of an email that claims you need to pay a sum of money up front in order to claim an even larger sum of money being held in reserve is probably a form of this scam.
  • Catfishing: The subject of a popular reality TV show, Catfishing is when a person on the internet misrepresents themselves as a potential romantic partner by using fake pictures, social media accounts, and dating app profiles. Catfishing can often escalate into demands for cash or gifts, or it can turn into extortion.

Based on these common examples, you – the person reading this article — probably don’t worry too much about online fraud. After all, the items above don’t do much more than troll for the common denominator. Based on how easy it is for you to see and avoid these scams, you probably think that you’ll always be able to see through an attempt to gain your confidence.

Advanced Forms of Fraud Can Trap Anyone

Let’s say you’re buying a house.

At some point during the blizzard of emails between you, your bank, and your real estate agent, you receive a communication asking you to wire

What is an Online Scam? And How to Defend Against It

your down payment to a specific account. The request looks legitimate – it comes from the bank, has the bank’s letterhead, and is written using a familiar writing style. You wire the down payment with no qualms at all.

You don’t realize you’ve been scammed until you sit down at the closing table.

This is a real example of an online scam that’s so subtle that there’s only one genuine interaction between the fraudster and their victim. It also involved the use of malware – malware that targeted the victim’s computer, allowed the attacker to observe the ongoing transaction, and insert an email with information that appeared to be genuine.

Many sophisticated scams tend to comply with this basic model. In what’s known as Business Email Compromise, an attacker identifies a business and compromises their email until they understand how they make payments. Then, they send emails to their various purchasing departments pretending to be the CEO or a major customer. The email requests that the purchasing department pay a falsified invoice. Using this method, a man recently plead guilty to scamming companies such as Google and Facebook to the tune of nearly $100 million.

Avoiding Advanced Online Scams

Advanced online scams rely on the fact that the attacker knows a lot about you and is thus able to predict your actions. This level of in-depth knowledge usually relies on malware that spies on your phone or computer. In other words, the one way you can prevent most sophisticated online scamming operations is to download a sophisticated anti-malware suite. Want to learn more? Check out our list of Top Ten Antivirus Solutions today!

About the Author

Andrew Sanders
Andrew Sanders

Andrew is a writer on technology, information security, telecommunications, and more