Cyber fraud can affect anyone who uses the internet to purchase goods or manage their finances. Criminals do not care who you are or how much money you have. They exploit anyone who falls for their scams. Learn what kinds of internet fraud exist in 2016, so you can protect yourself from the many different schemes perpetrated online.
10 Types of Cyber Fraud
- Lottery Scams
Lottery scams are a type of cyber fraud that occur when a criminal contacts a victim through email to inform them that they won a huge amount in an international lottery or another prize drawing. They then ask you to contact an official with the company to begin processing your winnings. They request personal information to confirm your identity, like copies of your passport or birth certificate, and then steal it. The scammers then require you to pay legal fees, bank fees, taxes, etc., prior to receiving your winnings and continually provide excuses for why they fees need to be paid. They may even ask to direct deposit the nonexistent winnings into your bank account and empty it once they receive your account information.
- Letters from West Africa Scheme
Also known as 419 frauds, the letters from West Africa scheme involves the victim transferring money into their bank account from a foreign country, like Iraq or a country in West Africa, to another account in exchange for a portion of the transferred money. A criminal pretends to be a person of authority and sends you an email requesting your assistance in moving a significant amount of funds out of their country. They trick you by providing well-constructed lies about where the money originated and why they cannot make the transfer themselves. Then they begin to ask you to pay for different legal fees or taxes for the transfer, which they promise you will receive back after you provide your bank account information and they transfer the funds. Cyber fraud victims never receive the money transfer and the con artist keeps the fee money and empties your bank account.
- Money Muling
Money muling is similar to the Letters from West Africa scheme. It occurs when a person knowingly or unknowingly transfers funds obtained illegally between different countries. Criminals recruit third-party persons through advertisements or posts on social media with the opportunity to make money quickly. The victims receive the stolen money, withdraw it from their account, and then transfer the money to the scammer’s overseas account. They do this because the criminal allows them to keep a portion of the funds as payment for the transfer. Even if you do not know you are transferring stolen funds, you could be subject to prosecution for money laundering and cyber fraud.
- Miracle Cure Scams
Many of the advertisements you see regarding miracle cures for weight loss or super foods with amazing health benefits are simply cyber fraud scams. Sometimes scammers pose as a pharmaceutical or alternative health company to market products that have never been tested or approved as medically beneficial. These fake products may even be dangerous if used. The victim pays for the product based on fake clinical research, fabricated testimonials, and meaningless guarantees.
- Loan Fraud
Loan fraud is a type of cyber fraud that generally affects people in underprivileged and desperate situations. They turn to the internet to find a low-cost loan and end up being scammed. The con artist advertises fast loans with approval regardless of a victim’s credit history. They ask for a fee upfront for loan insurance or a deposit. Once the victim pays the fee, they never receive the loan or hear from the scam artist again.
- Psychic Scheme
Psychic or clairvoyant cyber fraud occurs when a scam artist pretends to be a psychic with the ability to see your future. They contact a victim through email or an advertisement and promise you the winning lottery numbers, offer to undo a curse, or even that you may be in some kind of trouble and they know how to get you out. The scammer fools the victim into paying for a full report or to receive more information in exchange for money.
- Pay-Per-Click Scam
A Pay-Per-Click scam, also known as Click Fraud, impacts businesses that pay for a company to provide click advertising for them. The advertising company charges the client every time someone clicks on the banner or advert. Once the ad or link has been clicked a certain number of times, they are no longer displayed so the client must pay the advertising company to put up another advert. Cyber fraud occurs when the company clicks on the adverts to drive up the cost for the client either by hand or through a computer program.
- Pharming
One of the most effective forms of cyber fraud, pharming involves a scammer redirecting traffic from a valid website to their own fake website mirroring the legitimate one. They exploit the Domain Name System (DNS) by confusing a computer’s mapping from the domain name to the IP address. This makes a victim’s computer connect to the scammers server instead of the valid one. They trick the victim into providing personal and financial information including bank accounts, credit card numbers, passwords, and PINs. Most companies use a Secure Sockets Layer (SSL) to provide an encrypted verification of their site, but a victim is not protected if they ignore their browser’s warning that an SSL certificate differs from the server address.
- Call Tag Scheme
A call tag scheme occurs after a criminal illegally obtains someone’s credit card information. The con artist purchases items online using the victim’s actual address for shipping, but linking the tracking information to their own email. They commit cyber fraud by impersonating the company and calling the owner of the credit card to inform the victim they accidentally shipped the goods. They request to pick-up the package once it arrives. The criminal then arranges a pick up through another shipping company using a “call tag” to get the product. Once the victim realizes the fraudulent charge, they request a charge-back from the unknowing merchant.
- Automotive Fraud
Automotive fraud involves a scammer selling a nonexistent vehicle through a site like Craigslist, Cars.com, or AutoTrader.com. They choose a high-end sports car or luxury vehicle and advertise it much cheaper than the blue book value. The potential buyer contacts the scammer who informs them that they are out of town and the vehicle is located overseas. The criminal offers to ship the vehicle even while away and instructs the buyer to make a deposit or the full payment through Western Union or another type of wire transfer. They make the cyber fraud seem valid by also posing as a fake third-party agent guaranteeing purchase protection.
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