I met someone who was bitterly pained for spending so much money to go for a business interview that was sent to his phone, only to discover that they were a scam business.
They told him to pay a certain amount to them and then refer someone else who would be his new victim. This could go on and on as long as the new victims are eager to recover their money lost to the scam.
There are a variety of online business and money scams currently, and the number of victims of these scams is increasing every day despite available tips to avoid these scams.
According to Scamwatch.au, 12,136 online scams were reported for January 2020 with over $7M lost to these scams. This might mean that almost every one of us has fallen victim to an online scam or we know someone who has.
The increasing prevalence of online scams, either in the form of business or otherwise, together with the improved ways of making money transfers makes it important to understand how to identify and avoid falling for online business and money scams.
You don’t need to be a cybersecurity expert to know when a scammer is approaching. This article will open your eyes to some sure ways to identify and avoid falling for online scams.
Online Business and Money Scams
Online business scams come in the form of legitimate online businesses when they are not. Online business scams promise you big returns for your investments or a job opportunity requesting you to make an initial deposit.
Online business scams may require you to do some business online or on a mobile app. There are different types of online business scams, as follows:
- Get-Rich-Quick Schemes: These scams promise rapid and significant returns on investments with minimal effort. Victims are often asked to pay an upfront fee or purchase a product to access the “secret” to wealth, but the promised returns never materialize.
- Pyramid or Ponzi Schemes: In pyramid schemes, participants are encouraged to recruit others to invest or buy into a program, with the promise of high returns. Funds from new recruits are used to pay earlier participants, creating a chain, but the scheme eventually collapses, leaving most participants with losses.
- Work-from-Home Scams: Scammers offer online jobs or business opportunities that claim to allow people to work from home. These offers often require an upfront payment for materials, training, or access to job listings, but the jobs or businesses don’t exist.
- Dropshipping and E-Commerce Frauds: In some cases, fraudulent online stores or dropshipping businesses may sell products that don’t exist or never deliver the goods after payment. This can be a form of e-commerce fraud.
- Investment Scams: Scammers may pose as legitimate investment firms, promising high returns on investments in stocks, cryptocurrencies, or other assets. They may use fake websites or emails to lure victims into making investments that ultimately result in financial losses.
- Phishing Scams: These scams involve deceptive emails or websites that impersonate legitimate businesses, often banks or financial institutions, to trick individuals into revealing personal and financial information. Phishing scams can lead to identity theft or financial fraud.
- Multi-Level Marketing (MLM) Frauds: While not all MLMs are scams, some operate as pyramid schemes, where the focus is on recruitment rather than actual product sales. Participants at the bottom of the pyramid often lose money.
- Business Opportunity Frauds: Scammers may offer business opportunities, franchises, or licenses that require a substantial upfront fee but provide little to no support or value. These can lead to significant financial losses.
The above online scams offer the victim an opportunity to earn money after an initial investment. Below are examples of online money scams.
Online money scams simply find malicious ways to make the victim provide money, personal information, or financial details. There are various ways as shown below.
- Advance Fee Fraud: In this scam, victims are promised a substantial sum of money but are required to pay an upfront fee to release the funds. The promised money never materializes, and the scammers disappear.
- Romance Scams: Scammers establish fake romantic relationships with victims online, often via dating websites or social media. After gaining trust, they request money for various reasons, such as medical emergencies or travel expenses, but have no intention of meeting in person.
- Nigerian 419 Scams: Also known as “419 scams” or “Nigerian prince scams,” these scams involve unsolicited emails from someone claiming to be a wealthy individual seeking help to transfer a large sum of money. Victims are asked to provide their bank details and may be promised a share of the funds in return for their assistance.
- Lottery and Prize Scams: Victims are informed that they’ve won a lottery or prize and need to pay fees or taxes to claim their winnings. The winnings are non-existent, and the scammers profit from the fees paid.
- Inheritance Scams: Scammers claim that the victim is due to inherit a large sum of money from a distant relative. They request fees for legal documents or processing, but the inheritance does not exist.
- Investment Scams: Scammers pose as legitimate investment companies or brokers, promising high returns on investments. Victims may be enticed to invest money, but the investments are fictitious, and the money is lost.
- Tax Collection Scams: Scammers impersonate tax authorities, threatening victims with legal action or arrest for unpaid taxes. They demand immediate payment to a fake tax agency.
- Job Scams: Fraudulent job offers promise high-paying positions that require upfront payment for job-related expenses or training. In reality, there is no job.
- Tech Support Scams: Victims receive unsolicited calls or messages claiming to be from tech support, warning of computer issues or viruses. They are persuaded to pay for unnecessary services or software.
- Online Auction and Sales Scams: Scammers pose as sellers on online marketplaces, list items for sale and request payment. However, the goods are never delivered, or they are misrepresented.
- Pyramid Schemes: Online pyramid schemes promise quick and significant returns to participants who recruit others into the scheme. The majority of participants end up losing money.
- Phishing Scams: These scams use deceptive emails, websites, or messages that mimic legitimate organizations to trick victims into revealing personal or financial information. Phishing can lead to identity theft and financial fraud.
- Tech Support Scams: Some scams involve fake tech support services, where scammers claim to fix non-existent computer problems. Victims are charged for unnecessary services and software.
- Domain Name Scams: Individuals and businesses may receive fraudulent notices about renewing or registering domain names at inflated prices. Scammers hope to trick victims into paying for services they don’t need.
There is every chance that you have encountered at least two of these online scams at this time of reading this post. Newer patterns of these online scams can arise making it difficult to detect them. I will show you practical ways to detect and avoid falling for any of these kinds of online scams.
How to Identify Online Money and Business Scams
It is easy to identify online money and business scams and avoid falling for them. The reason most people often fall victim to these scams is that they are either greedy for some secondary gains or are made to believe in something fake and unreal.
While online scammers are developing new ways to evade being detected, here are some things they have in common that can help you identify a scammer when they contact you online or via other electronic means.
1. They push you to act too quickly
One common feature of online scammers is that they push you to act too. They give you deadlines after which the ‘great offer’ expires. That way, you might not have enough time to carefully consider the legitimacy of the offer before deciding to send money.
Sometimes, they feign a critical health or legal situation that warrants you to act fast, while promising you a share of some money they hope to receive.
They might show you testimonials of other people who have successfully benefited from their schemes with the hopes that you will be more interested in making your investment too.
Whenever you notice someone you have not met before mounting unnecessary pressure on you to make a payment, that is a classic sign that the person is an online scammer. Once you perceive an air of impatience in the offerer’s voice, they are trying to scam you until proven otherwise.
2. They tell you there are no risks involved
Every business has its own risks involved. Anyone who tells you there are no risks or tries to hide them from you is trying to dupe you somehow. You need to be careful of such offers.
Any business opportunity that promises that you won’t need to do anything else after making the initial payment may be up to no good. Any offer that does not show the risks involved is, in fact, too good to be true.
3. You don’t see a real business behind what they do
Many online networking businesses and Ponzi schemes thrive on leveraging the power of customer referrals. They try to make you refer someone else. This would have been a powerful business strategy for selling products and distributing services, except that there are no businesses behind the schemes.
Before you invest your money into an online business, you should try to see if there is any real business behind it. Even if they promise to do all the work for you, make inquiries into the type of work they promise to do for you.
Business involves the process of rendering goods or services or any other activity that promotes sales or customer acquisition. If this is absent from the money scheme, you should resist the urge to invest no matter the returns they promise you.
4. It looks too easy
Making money is not easy. If it was, almost everyone would have been wealthy. In reality, less than a handful of people are wealthy in the world today.
Because people are looking for easy ways to make money, these online scammers promise to give them their heart desires. By offering an opportunity that looks too easy, they can convince many people to join and invest their hard-earned money.
Once you yield to their convincing persuasions, that might be the last time you will hear from them. If they eventually reach out to you, they want to ask you to make another payment to clear the previous one and make it available.
5. You can detect some typographic errors in the emails or text
Another common thing you will see with online business scams, especially those sent via email, is the high level of typographic errors in the written texts. Only a few scammers take time to proofread their proposals to ensure that it is error-proof before sending.
6. Scam-detecting apps will detect a scammer’s phone call
Scal-detecting applications have made it possible to detect online scams. There are built-in spam and scam detector functions in most email clients like Gmail.
It is now possible to detect calls from scammers using mobile apps like Truecaller. This app can identify and block phone calls from potential scammers even before they have a chance to convince you to make any payment. I strongly recommend installing this app or any other similar app on your phone.
How to Avoid Falling for Online Money and Business Scams
Once you have been able to identify a scammer, you are more than 90% protected against his schemes. The major way to avoid falling for online business and money scams is to try to discern their true intent before sending out any money.
The following ways can help you do that.
1. Ask the person to wait
Nothing infuriates a scammer more than you asking him to give you some time to think. He doesn’t want you to have that luxury of time. A scammer wants you to act quickly so that you don’t have the time to tell anyone else.
In contrast to someone who wants to scam you, a genuine person will allow you time to understand what the business is all about. They may give you reasons and evidence why you should not waste too much time but they will never be too in a haste to get angry at you if you don’t act fast.
2. Do not send money to anyone you have not met
The simple way to avoid getting scammed of your hard-earned money is to not send money to anyone you have not met before. This might mean that you may sometimes not be able to help those who might be genuinely in need of help online, but you can decide to help with money you can afford to lose when you are convinced that they are genuinely in some need.
The Federal Trade Commission (FTC) recommends not to send money to someone you have not met, especially when you are not involved in any real business deal with them. Before you wire money either for help or investment, think twice about it and calculate your risk to ensure that it is something you are willing to let go of.
Some people prefer to give cash instead of making digital transfers. That reduces the likelihood of falling for an online scam to a great extent.
3. Opt-in for cash transactions on a one-on-one basis
There is a lot you can learn about a business when you meet one-on-one with the promoters. This is why scammers will never agree to meet with you in a safe location. They prefer you to quickly wire the money to their bank account.
A scammer will try to pretend to be genuine by accepting to meet you in person, but just when it’s time to meet them, they would call the appointment over some made-up emergency.
To avoid falling for online business and money scammers, frequently opt in for hand-to-hand cash transactions particularly when the person on the other side is not seeming trustworthy.
4. Inquire about the risks of the business
Once you hear that you don’t have anything to lose, think twice about committing your money to such a person or business. Risks are not something you want to hide from your clients when they ask from you. Even if there are no obvious risks, there is always something to comment on concerning the associated risks in the business.
When asking a scammer to tell you the risks involved, he/she may try to change the topic or deviate to something else unrelated to what you are asking. The scammer might get angry when you persistently try to ask what the risks of the business are.
5. Never give out your personal information online
Sometimes you might not be the one to send the money to them directly. They can find ways to hack into their victim’s bank accounts and take as much money as they want. To prevent this, avoid giving out sensitive information about yourself.
Online scammers can obtain personal information by asking people to fill out a form to get an offer or login to a fake replica site (otherwise called a phishing site). They can place a call across to you if they got your phone number and contact details via any means and ask you for some sensitive information which they would then use against you, if provided.
Beware of giving out your personal information to anyone who is not your friend or family, online. Your friends and family will not ask you for sensitive information about you, like passwords, OTPs, and credit card details. A scammer may hack into their account to pretend to be them when they are not.
6. Avoid responding to suspicious emails
Many of the emails you receive from scammers are tracked, enabling them to know who opens them and who replies to them. Once they see that you are active, they can then go ahead to contact you via other means until they have succeeded at what they want.
Thankfully, many of these emails land in the spam folders in most email clients like Gmail. Once you scroll through the list and you don’t see any email from a legitimate source that was mistakenly thrown into the spam folder, delete everything without opening any of them.
7. Keep questioning them
Aside from asking a scammer to wait a little, questioning him is one other major thing that infuriates a scammer. When an online scammer asks you to send them money, keep asking them more questions about them and what they are asking from you.
Oftentimes, they have pre-answered questions. So, asking them new questions they didn’t anticipate can throw them off-balance.
But if you are free to play a bit with them, just ignore their calls or chats and move on with your life. You don’t have to respond to them.
8. Don’t be greedy
Some of us have fallen for the same kind of scam several times. Yet, we still don’t want to learn. Stop believing that one miracle will happen and someone will give you a huge amount of money without doing anything. That is greed.
You might have fallen for a scam before, but you can’t afford to repeat the same mistake over and over again. Reiterate to yourself that money is not so easy to get, such that someone will offer you money freely without you doing anything.
9. Don’t pay for a job you have not yet gotten
The so-called employment scams will offer you job employment online or over the phone and then ask you to make a payment to commit the job to you. You should not fall for their schemes.
No employer will ask you to pay for a job when you are qualified for it. They are not doing you a favor by giving you the job. It is a win-win situation: you offer your services in exchange for the salary or wage.
Have you asked yourself why such fake employers cannot remove the money from your first salary instead of demanding you pay first? That is a clear sign they are into some shady business.
Final words
Online scams have become very common nowadays. It is also now easier to scam people due to improved payment technologies available.
You need to learn to identify online scams in any form they come, and also learn ways to avoid falling victim to online scammers.
The central reasons why most people fall for online scams are greed and carelessness. You should always tell yourself that “Whatever is too good to be true, probably is”. It is too good to be true. How else do you want to see it?
