Don’t get scammed: How to recognize and avoid online fraud

Kitboga is the pseudonym of a software programmer with a strange career detour. In 2017 his grandmother became a target of online scammers, leaving Kit disgusted and angry and ready to strike back. Since the incident, his mission became targeting scammers using scambaiting. Today, he and a few others like him manage to bring entertainment value into a deadly serious question: online scams.

Unfortunately, many young IT professionals starving for a quick buck choose to become part of a scam operation rather than earn less in a regular job.

Anti-scammers manage to extract critical information about the criminal organization and its operations. Some of them hack the scammers’ computers and use them to confront scammer agents. Occasionally, newly recruited agents will crumble under all the moral pressure and reveal details about the internal structure of the company they work for. This ongoing battle is somewhat under the radar, but it won’t ever cease, and we must give it a closer look.

Some online samaritans reach out to targeted people and manage to prevent cybercriminals from claiming their money. Scammers prefer cash, crypto, or gift cards – any currency or method that helps them quickly vanish after the robbery.

Those who follow our blog series know that cyber security is the ultimate digital padlock. We firmly established that one of the most significant flaws of any security is the human factor, the weakest link between man and machine. Online scammers abuse this relationship and get to the vulnerable through the vast-reaching hand of the Internet. Most scammed victims happen to be senior citizens, but as we shall see – nobody is insured, and everyone is someone’s target.

This article is not about where the Nigerian prince hid the counterfeit money. His method caused work until its notoriety crippled the effect. Every scam method has a lifetime, but some linger far longer than expected. Would you believe it if I told you the ‘the prince’ —although it already reached a meme status — still does fantastic damage each year. You may not fall for it, but someone will, and that could be your relative, friend, or business partner.

Even if you run a strictly non-digital business, some inevitable part of your data is embedded online. We must often refresh our knowledge on new technological advances. Every new gadget is a potentially powerful weapon in the hands of the wicked.

The evolution of online scamming

Online scamming is a type of fraud, and as such, it spreads across layers of styles depending on scope and complexity. Some criminals specialize in compromising corporations, like business email breaches. Others focus on the individual – the weak, the defenseless, the tech illiterate, or the naive. If you think you have a strong character and perceptive mind, think again. It only takes one invulnerability to unleash an avalanche of bad events and add your number to statistics.

The cluster of issues we deal with now, ranging from politics, diplomacy, and public health, does not help us better battle online scammers. The bad news is that they are here to stay and act as the evil shadow of every tech achievement. We must accept this omnipresent threat, keep a high guard, and follow up on how they evolve.

Phone scams may have taken a step back and let cybercrime take over. However, many online scammers still use phones as tools for destruction. War never changes, only the arsenal.

The anonymity of the Internet has made the effects of scamming even worse. For example, in a tightly-knit neighborhood, odd-looking people look suspicious. But online, everyone is suspicious by default. There is always the chance the email you just received from your boss is the deed of a scammer.

The primary cues of face-to-face conversations are lost in an online setting, and pretty much anybody can approach us. An incoming message is as meaningful as the avatar that stands behind it. And how much do we know about the person behind the avatar?

We are naturally more reserved in our online communications. The anonymity factor in online chats works in favor of online scammers. It is easy for them to pretend to be the vendor when approaching their rightful client and vice versa.

Some scammers follow protocols they themselves perfected for decades. They hone their skills and produce a robust algorithm that’s only getting better in time. As a result of this improvement, the number of frauds grew into thousands and their damage in billions. For 2021 alone, the damage from online dating scams in the USA alone reached a ten-figure. The dating scam example shows that senior citizens are by far not the most common victim of scammers. There are quite a few lonely people desperate enough to dare reach out into the unknown in hopes of connection. There are quite a few examples indicating that pandemic restrictions exacerbate the problem.

Isolated or not, the demographics of online scamming are disturbingly vast. Depending on the scammer’s quality and resources, we all fall under some category or other as potential victims. The sooner we learn what makes us vulnerable to fraud, the better we are as individuals and professionals.

What are some of the trending types of online scams?

Some of the tactics described below seem absurd; others rival good old nuggets like the ‘Nigerian prince letter.’ Let’s keep in mind that perpetrators concentrate on abusing vulnerabilities, and practice shows that where there is one, there’s another. Senior citizens who possibly suffer from health conditions are examples of an ideal target. However, online scams cater to all human flaws. Unfortunately, our drives and desires become vital factors in orchestrated scammer traps. Great companies rely on personas to get a better read on their customers; scammers use the same strategy to single out victims.

Let’s have a peek into the jungle of online fraud. Mosquito nets and malaria pills are obligatory.

     
  • LOTTERY SCAMS

    Winning the lottery is incredible. But what if I told you that you won the Australian national lottery, even though you have never even been to that country. Yes, unfortunately, some people fall for this one. Scammers claim they have a big reward for the victim and request a modest sum in advance, claiming they need it for transfer fees.

    Reading about lottery scams, one can’t help but think, “There is no way this is happening to me.” We believe we are smart enough to see through the veil that’s been thrown over our eyes. It does come as a surprise how many people do fall for this trick.

    Being hit by a lottery scam is similar to being hit by lightning: once you have been struck once – chances are you will get it again. Scammers work in networks and often exchange lists containing potential victims’ personal information. Losing your wallet is terrible, but ‘losing your wallet and somebody else finding it’ is an entirely different ball game, usually ending with a bitter defeat.

     
  • CANCEL /RENEW AN ONLINE SERVICE

    Anyone who browsed the internet for more than a day should recognize the occasional pop-ups claiming big awards. Take one-millionth visitor, for example – most of us in IT have been ‘the lucky one’ at least a couple of times already. But where is the ‘award pop-up today’? Scam tactics come in and out of style quickly. As soon as a fraud tactic becomes public knowledge, it is replaced by something else. ‘The millionth visitor’ trick is not as common anymore, but it still lingers on, and we have thousands of new fake online services instead.

     
  • FAKE COMPUTER VIRUSES

    A relatively old method, the ‘fake virus’ claim is still effective. Victims of this scam are quickly convinced they should immediately call a phone number that connects to someone pretending to be from IBM or Microsoft. The phone number is usually on display in big letters. It is easy to assume that most of the targets have something in common: bad eyes.

    As soon as victims connect with scammers via phone, the latter quickly hijack the victim’s computer via software like TeamViewer.

     
  • SOCIAL MEDIA SCAMS

    Social media frauds are so versatile we might want to rethink how we approach our favorite social app. According to a recent Federal Trade Commission report, this type of crime is prolific, and the losses from last year were near $800 billion. As we will see later, this scam is just one of many getting a natural boost from COVID-19 consequences. During the pandemic, people spend more time online, boosting the effect of online frauds.

    Social media is naturally one of the best breeding grounds for online dating scams, which, as we shall see, pair up nicely with crypto frauds. Criminals have managed to close the loop of their online scheme by adding one of the best weapons ever invented against humans: emotions.

Crypto-Related Fraud

With the value and interest in “digital gold” surging after the virus hit, criminals ride a rising tide and manage to lure more unsuspecting small-game investors (or people who simply fell in love) and rob them. Cryptocurrency adds another layer of anonymity that the Internet, by default, provides. Therefore, crypto scams victims are having a callous time finding the thieves. Thanks to the supreme privacy rules of cryptocurrencies—a byproduct of blockchain technology—criminals get away with such frauds and disappear without a trace.

Crypto fraudsters use dating apps to leverage their digital coin schemes. Cybercriminals can combine crypto frauds with online dating scams. Thanks to more people feeling lonely amidst the pandemic and the buzzing fuss around cryptocurrencies. The result? An exquisite combination that already caused material and psychological damage to tens of thousands of victims for 2021 alone.

CRYPTO FAUCET SCAMS

The best scams are those that require little investment (or risk) for the perpetrators, and crypto scams culminate into what are now ominous applications promising a slow but steady income.

One such example is the crypto faucet scams. The term ‘faucet’ aims to describe the rate of payment. Leave your kitchen tap water to drip overnight, and it would have filled a bowl in the morning. Cypro faucet apps promise their users will gain tiny amounts of cryptocurrency by completing simple tasks.

It is worth mentioning that there are legitimate crypto faucet apps, but this type of business also creates immense opportunities for criminals to “open up shop.” There is a time bomb hiding within the simplicity of the facet app scams. It seems you have everything to gain and close to nothing to lose by trusting them. A brief reminder about the stark similarity between faucet apps and “make thousands from home” scams: they both seem to offer extremely lucrative deals. Faucet app users are convinced that the risk should be low since they put less effort into this. How very wrong.

Scammers use crypto faucet apps to funnel users’ private data. As in most similar scams, offering your name and date of birth is just the tip of the iceberg. The perpetrators aim high. They then gain more assets by leading users to contribute to their demise. For example, some tasks from the faucet app seem innocent: watching ads or completing a captcha; others entice users to click on a dubious link. I cannot emphasize how disturbing the growing number of people who install such apps, link their wallets, and further stake their time and money.

The most popular crypto faucet scams — and one of the most devastating— involve digital wallets. Users spend days, sometimes weeks, gathering drips of the promised digital coin, only to find out at the end they cannot withdraw it. Not only did victims lose their money, but they also put the effort in doing something for a long time on behalf of someone they don’t even know. This insane version of modern slavery would make even the builders of the ancient pyramids raise an eyebrow. In ancient times, terrorizing people took a lot more resources. Today, anyone can use digital technologies to reach millions of people effortlessly and, thanks to automation, damage them without putting too much effort into it.

Conclusion

Online scammers are modern-era kings of the online jungle. It takes an immense effort to dethrone them. The reasons pile up: the potential targets grow constantly and are far into the hundreds of millions; the sophisticated methods to lure victims and cover-up tracks are improving. Online fraud is the harmful bacteria we must learn to live with, and if there is one general rule that will help you avoid the majority of scams, it should be this: don’t wire money to anyone you haven’t met yet.

One of the worst effects of online fraud goes far beyond material damage. Victims often walk off with a permanent psychological scar that won’t heal for years, if ever. Imagine the devastating rush of feelings that a mother experiences when a convincing male voice tells her over the phone that her son suffered a life-threatening car crash.

What is the best way to kill a trending scam scheme? Bring awareness. Mention the threat of online scams the next time you speak to your parents or grandparents, and you might save a life.

Author

Kris Terziev

Kris is the Head of Research and Development at CodeCoda and, as he himself says, is constantly seeking better methods of developing and implementing software solutions.
In his previous experience as a software engineer, he has experienced everything from plain assembly code through the optimization of the process of business and functional analysis and the development of Fintech Applications.
During his school years, he won several medals in international competitions in mathematics and computer science. Concerning his professional interests, he pays special attention to algorithms and software development methodologies.