In the technology-driven world today, everything seems to be connected to and run by the internet. Although it’s truly a great tool to have access to, it also puts individuals as well as businesses in a situation where online fraud and scams are prevalent. Being a victim of online fraud and scams is no joking matter and needs to be taken very seriously to stop these thieves.

It is important to be aware of Internet fraud including the most common scams, how to avoid becoming a victim, and how to report it. To be on top of the game, it is necessary to become savvy enough to avoid the often costly and illegal activity from wreaking havoc and causing unnecessary stress and strife for those who conduct business as well as personal tasks online.

With information gathered from reliable and trustworthy sources, such as the Federal Trade Commission (FTC), this unique resource guide was designed to educate and protect individuals as well as businesses against internet scams, types of online fraud, and other web-based unscrupulous practices and cyber-crimes.

Why You Should Care About Fraud

Everyone should care about and be aware of online fraud and internet scams because each and every person and business that uses the internet is at risk. Also known as cyber-crimes and e-crime, these acts can cause a major inconvenience, stress, and even huge financial issues – and no one is immune to these damaging acts. If you do anything at all online, there is a chance you could be the next victim of an online crime.

In fact, there is a better chance each day of being the victim of common internet scams and frauds as the techniques are becoming more advanced. According to Verizon’s “2016 Data Breach Investigations Report,” an unparalleled source of information on cyber-security threats, the new wave of cyber-crime threats are “well-funded, and more costly to victimized organizations.” Ginni Rometty, President and CEO of IBM, agrees and said cyber-crime is “the greatest threat to every profession, every industry, every company in the world.”

Why Online Fraud is So Prevalent Today

Online fraud and internet scams happen so frequently for a few simple reasons: Many people do not understand the risks involved or assume it will never happen to them. It is crucial to understand how business or personal information is at risk and to understand that it can happen to anyone at any time. It is a constant threat and should be treated as the serious crime it is.

Believe it or not, most online security issues are not found on the problematic websites most suspect, like the ones featuring pornography and gambling. Surprisingly the cyber threats are most commonly found in the “so-called” legitimate websites often frequented by people on a daily basis. These sites include social media platforms, major search engines, and many retail shopping websites.

How Online Internet Scams Work

Internet scams, which are cyber-crimes, are on the rise. These sneaky criminals pry their way into private accounts, work computers, and even personal homes. The tools and method of attack are often popular programs, apps, social media sites, and software. From clever phishing scams to work-at-home schemes, and cat fishing ploys, these common internet scams are designed for one reason: To steal other people’s money! Here are some of the most common internet scams and how to avoid being a victim of them:

Common Internet Scams to Be Aware Of

The Nigerian Scam

Most people have probably seen the emails from a desperate Nigerian Prince who seems to be having a hard time getting his insane amount of money transferred to a U.S. bank account. The scammer insists that assistance is needed to claim the fortune and those who help will be rewarded very well. The ‘Prince” often asks for money for legal fees indicating that there is no access to the money until it is transferred out of the country. There is no Prince, there is no money, do not fall for it.

Publisher’s Clearing House Scam

Publishers Clearing House sweepstakes are 100% legitimate, however, there are also internet scams that are illegally using the Publisher’s Clearing House name. The scammers disguise themselves as the real company to make people think they have really won. The clue that it is a scam and not a legitimate winning prize is that most scammers ask for money from the “winner” before a prize will be awarded. This is a huge red flag. In addition, all genuine winners will be contacted as follows, per the PHC website: “All PCH prizes of $500 or greater are awarded by either certified or express letter or in person by our famous Prize Patrol at our option.” A prize notification received any other way is a scam.

Travel Scams

Travel scams come at the most convenient times, and that’s no coincidence. These scams consist of emails sent to potential victims with an amazing vacation offer that indicates it is a ‘must act now’ offer only good for a short period of time. Most often, the vacation includes hidden costs and fees which are not revealed until after the recipient has paid for the trip. Other emails scams don’t even offer a trip at all, but simply take the victim’s money and run. Experts suggest that only trusted travel sources should be used for any vacation packages and that consumers do their homework before sending anyone money or giving credit card information.

Data Breach

A data breach occurs when data is stolen from a secure location and put into an unsafe environment. Data breaches can happen on a corporate or personal level and expose protected personal or confidential information, putting the owner in danger.

Catfishing (The Romance Scam)

A Catfish Scam is an online scam where someone assumes a persona to trick or con a person into believing they are someone they are not. The scammer (the catfish) creates fake online profiles to make their lie believable and typically utilizes social media and online dating sites which contain fake photos, bios, friends, and more to lure victims with the intent of scamming them out of money.

Loan or Credit Card Scam

Email offers that indicate pre-approval from banks or credit cards that seem “too good to be true” usually are not legitimate. If an email is received that indicates you are approved for $500k and you have not applied for a loan and submitted your income and other financial information, it is almost guaranteed to be a scam. The reality of the situation is that there will be a large “processing or loan fee” which is the way the scammers make their money. This is definitely a scam that will cost if the bait is taken.


Ransomware is a type of malware that is typically delivered to the victim via emails. When the user opens the email, it rapidly encrypts the files on a network. When the business or individual recognizes that they can no longer access their files, the scammer then demands a payment (or ransom) in order for the victim to regain access to their data.

Phishing Scams

Phishing scams are emails that cyber criminals send in attempt to get your login credentials for your bank accounts, social media accounts, and other personal accounts that offer data that is valuable to them. They send clever email messages in an effort to trick and deceive and will say anything to get your information including posing as a bank, credit card company, or other familiar business.

Lottery Scams

Congratulations lottery winner! Please claim the $65,000,000 lottery prize today! All that is required is a small fee of $5,000 to claim it. SCAM! The classic lottery scam is one of the oldest and is still used today. These scammers play on the fantasy people have of actually winning the lottery and take advantage of people who actually think it is legitimate. Stop and consider that a lottery ticket was never purchased, nor was a contest entered, so it is virtually impossible to be a winner at this scam.

Facebook Scam

With the popularity of Facebook today, many individuals and businesses use it on a regular basis to communicate and promote. If these personal accounts are hacked, the scammer can gain knowledge as well as access to friends and family, which can be a huge concern. This opens access to personal information that can be detrimental if used by cyber criminals. It is crucial to protect the privacy and online security of your account just as a bank account would be protected. Applying a double authentication method is highly recommended for security.

Credit Card Fraud

Credit card fraud is one of the most popular cyber-crimes today. Scammers fraudulently obtain credit card numbers from unsecured websites or an identity theft scheme. Always be sure to use a reputable company for online shopping, don’t always trust a website just because it says it is secure, and check with the Better Business Bureau to make sure the company is reputable before shopping online with them.

Tips to Avoid Online Fraud

Online scams and fraud are tricky to identify because they truly look legitimate. They play on the good nature, generosity, and compassion for others to scam victims. Here are some ways to avoid becoming the victim of online scams and cyber-crimes:

  • Never open suspicious or unfamiliar texts, pop-up windows or emails
  • Only engage with known people or businesses
  • Always use a double authentication when available
  • Keep personal and financial information secure and private
  • Always secure mobile devices and computers
  • Use strong passwords
  • Avoid requests for money or passwords

Report Online Fraud

Those who have been a victim of an online fraud or scam should definitely report it to the proper authorities. Just as there are many kinds of fraud and scams, they may also need to be reported differently. The first step is to contact the local police fraud department.

In addition, contact the state consumer protection division to report the fraud. In cases of violations of federal laws, contact the appropriate federal agency. Complaints about Internet-based scams should be reported to the Internet Crime Complaint Center. In addition, a list of resources to report scams can be found here.

Penalty for Online Fraud

Penalties for online fraud ranges from state to federal punishments and can include fines and prison sentences of up to 20 years.

Online Scam and Fraud Statistics

The statistics are quite alarming. According to IBM, online advertisements are 182 times more likely to transport malicious content than pornography websites, whereas popular search engines are 27 times more prone to transferring malicious programs than fake software sites, and even online shopping websites are unsafe and are reported to be 21 times more likely to spread malicious content than counterfeit software sites.


For more information about Internet scams and online fraud, there are a variety of great resources to help. The Financial Fraud Enforcement Taskforce and the FBI also offer helpful information and explanations of the various types of frauds and scams, as well as excellent information about what victims of fraud need to do.