Top 5 Internet Fraud & Scams Of All Time

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If you’ve been using the Internet, and specifically email, for any length of time, then by now you’re most likely aware of most of the common email scams that exist online. Dean covered the five most common email scams, so if you aren’t familiar with them, then please take the time to read his thorough article.

Beyond just basic email scams, there are other methods that scammers use to defraud people of their money through the Internet. Today, I would like to examine five additional Internet scams that are very commonplace, but unfortunately not quite as many people are aware of them.

These are scams that trip up the most people every year and lead to a substantial financial loss. Take the time to read through and understand these scams so that you never find yourself a victim of them.

Nigerian Scams Revisited

I remember watching a documentary a few years ago that detailed how scammers, usually located in third world countries, set up computer clusters connected to the Internet and send out thousands of Nigerian scam emails every day.

The name of the scam comes from the original form of this scam, which consisted of emails outlining a situation in Nigeria that required a massive transfer of money from that country into the United States for safety. For assisting with the money transfer, the recipient of the email is promised a percentage of the transfer amount, usually totaling hundreds of thousands of dollars to a few million.

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Once this came became widely known, it immediately evolved and continues to evolve even today. It now takes a very wide variety of forms including the elderly sick person looking to transfer their entire estate into your bank account.

top internet fraud scams

Then there is one of my personal favorites, the young woman in danger who is seeking a savior to help her – and of course she has a very large sum of money to offer as a reward. Here is an email from “Miss Diana” of West Africa, who has a DC worth $5.9 million, and is seeking to escape her country and live in the United States.

top internet fraud scams

The scammers put together storylines and plots that appeal to the basic human emotions of greed, goodwill and love. In some cases they almost always reference God in some way – in an effort to appeal to western Christian values. In the end, the many variations of the Nigerian scam end in only one place if you offer up any of your contact information or, even worse, your bank account information – an empty bank account.

Scammed By A Counterfeit Website

The second most common Internet scam is email phishing. Dean mentioned this in his article (fake links in emails to banks or Paypal), and MUO covered SonicWALL, which can detect phishing emails. However, did you know that even if you don’t click on a fake link and you follow the advice to type in your bank or Paypal’s URL directly into the browser, that the site could still be counterfeit?

It’s true. If you visit the wrong website or download the wrong file from an infected email attachment, you could end up with malware on your PC that specifically targets a browser security flaw. Internet Explorer seems to be the most vulnerable to these. The Malware basically re-routes your browser URL query to a different page than the domain that you typed in.

top internet fraud scams

Because the scammer has altered the DNS settings for a specific website or hijacks your browser, it’s very hard to realize that you’re actually visiting a counterfeit version of the site you intended to visit. How do you prevent such a scenario from happening to you?

First, run MalwareBytes religiously. Second, keep your browser fully patched and updated. And finally, be vigilant about anything on the website that seems a bit odd. Thankfully, most major banks are catching on to this problem and are starting to incorporate a unique image of your choosing into the login process. Each time you log in, the website asks you to confirm the image. If the website doesn’t ask you to confirm, or it’s the wrong image, then you know you may be visiting a counterfeit site.

Three Major eBay Scams

While the Nigerian scams and phishing emails with fake links are the two most common Internet scams, the popularity of eBay over the past decade has led to another whole family of Internet scams. There are three significant scams that you should be aware of if you’re an eBay user. The first is a scam that targets eBay sellers, and it involves the scam artist obtaining a matching broken item that’s identical to the item that you’re selling. Often, such scam artists will actually purchase one right off eBay that’s in need of repairs or otherwise has some damage to it at a fraction of the cost of a new one.

internet fraud

Then they will purchase your identical item, which is in perfect condition. They’ll make payment to you, receive your item, and then email you to say that the item was damaged in shipment. Often, they’ll threaten to give you negative feedback (a hard thing to deal with as an eBay seller). Many sellers simply cave and send a full refund, and the scammer returns the damaged item, keeping the working item for themselves.

Protect yourself from this scam by either requiring your buyers to purchase shipping insurance, or doing what the seller in the above example did and put in writing that all sales are final, and no returns are accepted.

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The insurance option is the best approach because it removes all liability from you as the seller. If the buyer claims that the device was damaged in shipment, it’s up to them to prove it to the postal service, and face fraud charges if they are found lying.

The second common eBay scam is the Auto Scam. The Motors section of eBay is a bustling auto marketplace where huge volumes of sales take place every day. Unfortunately, because these are big ticket items, and because the financial transactions on eBay are not very secure for buyers, the marketplace is very attractive to con artists.

The con is very simple. First, they list a very popular big-ticket auto that they actually don’t even have. Sometimes they’ll even just steal photos from other listings.

internet fraud

Now, I don’t know if the listing above is authentic or not, but I offer the listing as an example of how much money is at stake. If you really want this car and you don’t live near enough to inspect it, you might be willing to cough up payment, or even a partial payment, at the end of the sale. Don’t do it. There are far too many examples where people have sent in a significant chunk of change, and the seller simply disappeared without a trace. Never bid on an auto on eBay Motors unless an on-site inspection by you or a third party on your behalf is agreed upon.

The last eBay scam is shown above. As a seller, you’ll get used to notifications from eBay, and sometimes it’s easy to assume they’re all authentic. Scammers will scour completed eBay sales and then send these fraudulent emails to the seller, as though it’s from eBay’s automated system. The goal of the email is to get you to click on the link and log into your eBay account. The moment you do – your eBay account and all financial information contained therein, is compromised.

Have you ever been “taken in” by an Internet scam? Do you know of any other popular Internet fraud or scams that are floating around out there? Let readers know in the comments section below.

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9 Comments - Write a Comment

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phirebird

Hacked eBay/Half.com accounts + Fraudulent chargeback transactions. I got hit with this one a couple of times, but quickly learned to shell out the extra few cents for delivery confirmation and verify the buyer account. Here’s how it works. (1) The scammer gains control over an inactive ebay/Half.com account (don’t ask me how) and makes a bunch of purchases. (2) Sellers send the items and scammer receives them. (3) Scammer issues a chargeback request through their credit card company, which ebay/Half.com always complies with. (4) Seller must prove that the delivery occurred and must eat the purchase price if they can’t.

It seems to happen frequently with video game listings.

After any sale is made, google the buyer’s username and delivery address to see if any other sellers flagged them as fraudulent. Look for any suspiciously lengthy gaps in the buyer’s review history. If the sale seems sketchy, buy insurance in addition to delivery confirmation. Also, try to wait as long as possible before shipping the item. Sometimes eBay will notify you that the seller’s account was hijacked and recommend issuing a refund to the seller.

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phirebird

Hacked eBay/Half.com accounts + Fraudulent chargeback transactions. I got hit with this one a couple of times, but quickly learned to shell out the extra few cents for delivery confirmation and verify the buyer account. Here’s how it works. (1) The scammer gains control over an inactive ebay/Half.com account (don’t ask me how) and makes a bunch of purchases. (2) Sellers send the items and scammer receives them. (3) Scammer issues a chargeback request through their credit card company, which ebay/Half.com always complies with. (4) Seller must prove that the delivery occurred and must eat the purchase price if they can’t.

It seems to happen frequently with video game listings.

After any sale is made, google the buyer’s username and delivery address to see if any other sellers flagged them as fraudulent. Look for any suspiciously lengthy gaps in the buyer’s review history. If the sale seems sketchy, buy insurance in addition to delivery confirmation. Also, try to wait as long as possible before shipping the item. Sometimes eBay will notify you that the seller’s account was hijacked and recommend issuing a refund to the seller.

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Tony

Ok, I understand that they’re after your bank details. But how does them having your bank details let them empty your bank account? Surely they can’t do that without permission? I mean every check I write has my bank account number on it; why is this route not abused too?

Ryan Dube

Hey Tony,

I believe that with the routing number and account number, a person could manage to get money out…but with that said I think most of the scams listed above (like the Nigerian scams) actually convince people to send in a bit of money at a time – a few hundred or grand here and there. Apparently the story is convincing enough that some people buy it…

-Ryan

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Rajeeva

I suppose there is another kind of scam that this particular big e-shopping site in India propagates. The site is http://shopping.indiatimes.com – they list something like a million items on their site. But most of the items when they are bought they refuse to deliver saying that it is out of stock??? then they issue “Gift Certificate” for that amount so that you may buy something else that you dont need. I have personally lost hundreds of Rupees on that site. Why cant this site list the item as out of stock in the first place? I suppose they just keep several items on their site so that they can just show that they have so many items on their list. This site also advertises their online products offline in their newspaper, ie, the Times of India and their they quote discounted price to attract customers. Actually, if you try to buy the item online, there will be no or lesser discounts.

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Rajeeva

I suppose there is another kind of scam that this particular big e-shopping site in India propagates. The site is http://shopping.indiatimes.com – they list something like a million items on their site. But most of the items when they are bought they refuse to deliver saying that it is out of stock??? then they issue “Gift Certificate” for that amount so that you may buy something else that you dont need. I have personally lost hundreds of Rupees on that site. Why cant this site list the item as out of stock in the first place? I suppose they just keep several items on their site so that they can just show that they have so many items on their list. This site also advertises their online products offline in their newspaper, ie, the Times of India and their they quote discounted price to attract customers. Actually, if you try to buy the item online, there will be no or lesser discounts.

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Deep

You were saying about the last e-bay scam type:
“The goal of the email is to get you to click on the link and log into your eBay account. The moment you do – your eBay account and all financial information contained therein, is compromised.”
But that is not true, and also this phishing scheme is widely used not just of e-bay.
If you log in to e-bay that’s fine, but in most scenarios, the links in the email don’t take you to e-bay. Instead, you’re taken to another URL (often an IP) which has a clone of the e-bay page. It it here that you post your info, they will have a copy of it while you’ll be redirected to ebay, possibly logged in so you won’t suspect what happened.

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Deep

You were saying about the last e-bay scam type:
“The goal of the email is to get you to click on the link and log into your eBay account. The moment you do – your eBay account and all financial information contained therein, is compromised.”
But that is not true, and also this phishing scheme is widely used not just of e-bay.
If you log in to e-bay that’s fine, but in most scenarios, the links in the email don’t take you to e-bay. Instead, you’re taken to another URL (often an IP) which has a clone of the e-bay page. It it here that you post your info, they will have a copy of it while you’ll be redirected to ebay, possibly logged in so you won’t suspect what happened.

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GTFO

You Fail. So GTFO.

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