5 Online Internet Financial Scams You Should Know About

Most online scams appeal to the best in people. They offer you ways to manage your affairs, protect your family, save money, or help others. Unfortunately, these scams can cost you everything – including your identity.

5 Common Online Financial Scams

Here are the 5 most common online financial scams:

1. “Ransomware“: Ransomware scams purport to help protect you from “computer lockout” supposedly perpetrated by the FBI or Homeland Security because of your illegal activity. They want you to use a prepaid card to pay them $300 to help you unlock your computer. Avoid this one by refusing to click through on popups and emails that ask for money.
2. Credit card theft: Some hackers can break into your online accounts and steal your information or lift it from another source and use it online. Protect against this by never storing your credit card info in an online store and by reporting it immediately if it does happen to you.
3. Fake auctions: Online auctions can be fun – as long as the seller actually intends to ship you an authentic version of what they picture in their listing. Too often, what you get is a fake or they never send the item at all. There’s no way to avoid this one other than checking out feedback for the seller, buying only from experienced sellers, and shopping only through reputed sites that offer money back guarantees to buyers.
4. Counterfeit cashier’s checks: These are also related to online sales, but in these cases, the victim is the seller, not the buyer. The seller is sent a fake cashier’s check in lieu of payment. Avoid this one by waiting to ship all items paid for with cashier’s check until it clears.
5. Phishing scams. One of the most common online scams is “phishing” or “spoofing.” Identity thieves send out emails that look like they are from the company they are pretending to be, asking you to log in through a link provided in the email and enter your password or other sensitive information. When you click on the email, however, you are often taken to a fake site that looks just like the real version, and they take the password information you enter and use it to hack into your account. Avoid falling victim to this scam by going directly to the site in question and ignoring the email links then verifying that the email was indeed sent by the company.

Don’t Become a Victim!

You’ve already taken the first step to protect yourself – you’re learning about the latest in online fraud. Further steps you can take include:

• Buy online identify theft protection insurance. Some companies offer insurance to protect you in the event of online identify theft. Make sure to choose one that not only alerts you to possible fraudulent activity on your credit report but will stand by you and assist you if you get into trouble.
• Never click on a link in a popup or email – even if the site it leads to looks familiar – and give personal information like passwords or account numbers.
• Confirm the source of any suspicious emails before clicking on links or offering any information.
• Never store credit card information at any online store.
• Update passwords and login info frequently.
• Never keep all your information for your accounts in one place.
• Report any online fraud attempts.

Recovering from Online Fraud

Even with the best of intentions, you may find that you have inadvertently given your private information to unscrupulous thieves – and they’ve stolen your identity. The best way to recover is to take action. You should:

• Document every piece of correspondence and phone call that you make to deal with the issue.
• Contact all three credit bureaus and all companies where the fraud occurred and let them know what happened.
• Close all accounts that were hacked.
• Change all password and login information on all online accounts.
• File a police report if necessary.
• Fill out all reports and provide all information requested by the companies involved.
• Follow up as often as necessary until everything is back to normal.

If you believe that you have been a victim of an online financial scam or that someone has attempted to victimize you, report it immediately to the Internet Crime Complaint Center .