By Amy Miller, AFC®
Online scams are constantly changing and more widespread due to the increased amount of time Americans spend online. According to the Better Business Bureau Institute for Marketplace Trust’s (BBB) recent Start With Trust Online research report, online scams have increased by 87% since 2015 and have become the most prevalent, making up 55% of all scams in 2022.
The BBB also reported that online scams resulting in monetary loss increased to 81% during the pandemic and that the military was not exempt. In fact, according to the Federal Trade Commission (FTC), fraud attacks in the military community increased by 69% in 2021. Active-duty service members and veterans reported the highest amount of fraud losses, which reached approximately $267 million.
(We discussed this in more detail during Military Consumer Month – you can read that article here:
There are a lot of different scams out there and all of them can be perpetrated online; however, there are a few that seem to be more prevalent and result in the most monetary loss. Following is BBB’s list of those top online scams and a few steps you can take to protect yourself.
Online Purchase Scams
Online purchase scams typically involve a scammer pretending to be a legitimate business and selling products via a fake website. These sites look genuine and may even be advertised on other business websites and social media platforms. Typically, they are open for a short period of time and disappear quickly.
Purchase scam warning signs include offers of products at unbelievably low prices, recent/new presence on social media, no reviews from previous customers, and the absence of shipping information or terms and conditions on their site.
The best way to protect yourself is to do a little research before making an online purchase. Always check the website and social media pages to learn more about the retailer, including whether they are foreign or domestic if they are using a secure site, and what payment types they accept.
Cryptocurrency & Romance Scams
The BBB’s next two scams with the highest incident of loss are Cryptocurrency scams (87% loss rate) and Romance scams (85% loss rate). The two scams combined are quickly becoming one of the top online scams internationally. According to the FTC, crypto-romance scams conned around $139 million dollars from victims in the U.S. in 2022. In addition, the FTC reported that approximately 46,000 consumers lost more than $1 billion dollars in Cryptocurrency in 2021.
Crypto-Romance Scams are very similar to regular romance scams, except they are after your cryptocurrency instead of your cash. Scammers will make contact via a dating app or social media site and will work to earn your trust and affection. Once they have it, they will claim to have knowledge of investing and trading opportunities. They may even walk you through a few legitimate trades to build your trust. These scams have become very sophisticated and often have fake trading sites that mimic real platforms.
Your best defense is to do your research before you divulge your personal information, invest or transfer funds to anyone or any entity you are not completely sure is legitimate. Search the names of companies and individuals you are corresponding with and include the words “review” and “scam” in your search. Be wary of promises of big returns, requests for emergency needs, travel expenses for meetups, deadlines, and “expiring” offers.
Scamming Contact Methods
Scammers have become very resourceful when coming up with new scams and contacting their targets.
Websites and online shopping are the most popular forms of contact and result in the most monetary loss, followed by email and social media. Traditional phone scams resulting in loss have been on the decline for some time now and currently accounted for just 17% in 2022. The trend seems to be moving toward text messages, which are now involved in around 30% of online scams. Texts will typically contain links that will connect the victim to a fraudulent website. Losses associated with text scams are also increasing. In 2022, around 20% of text scam victims lost an average of over $600.
Often, these texts will appear to be from the target’s bank, from the post office stating “you’ve missed a delivery,” or the text may simply say “Is this you?”. The scammer’s goal is to get the target to start a conversation to either gain personal information or to visit a website. Fraudsters are very savvy and are masters at knowing what to say to get a target to act.
The best tip is to never assume a text is legitimate. Remember, scammers can “spoof” numbers and websites. Again, research is your best defense. Do not reply or click on any links sent from any text that you haven’t verified.
Protecting Yourself
As I’ve stated several times in this blog, research is your best defense. Here are a couple other tips you can use to protect yourself.
Websites – Check the URL for incorrect letters or symbols that may make it appear to be a legitimate site. Something a little off is a red flag. Remember, con artists can spoof sites. Also, look for the age of the site. A new site is another red flag. You should also look for proper grammar, spelling, and contact information and you should determine if the website is a secure site (look for “https” in the URL).
Social Media – Research the company before purchasing from an ad on social media. Scammers can purchase ads and appear online as legitimate businesses. Do more research on the product and company before ordering or sending money.
Text – Do not click on any links. This may allow scammers to download malware and hack your phone. Additionally, never reply STOP – this indicates that your phone is active and will most likely prompt more text being sent to you. You can also block the sender and report it by forwarding the messages to SPAM (7726).
For more resources and information – check out the links below.