Online Scams: What Are They and How to Protect Yourself From Them

Some are more subtle than you think

Burglar leaving a computer monitor with a full sack - Online Scams
Lifewire / Theresa Chiechi

Online scams start from the same bit of economic rationality. When it's possible to broadcast to millions of people, it's inevitable that someone, somewhere, will bite. But not all scams are created equal. While the Nigerian Banker may not fool you, other more subtle scams just might. Here's what you need to know.

What Is an Online Scam?

Online scams are a type of fraud. While they can take many forms, they always serve one purpose—to separate you from your personal information or your money. Most online scams fall into one of three broad categories.

The Email Money Scam

So-called Nigerian Banker scams make many people laugh, with the fake formality and the odd language. Variations of the Nigerian Banker email scam use this approach, too. The challenge with this type of scam is that the goofy sentences act as a screener for the spammer. If despite all the red flags, you still follow up, then you're self-selecting yourself into a small, gullible pool of people.

The Friend in Need

Ever get an urgent Facebook Messenger note from a distant friend or acquaintance expressing some sort of emergency? For example, they lost a wallet while on vacation in a foreign country and they urgently need you to send money by PayPal, Venmo, or Western Union to help with documentation?

Hacked social media accounts offer a vector for scamming because you're primed to trust the person you think is on the other side of the screen.

The Legit-Sounding Problem

A problem especially for seniors and people subject to debt collections, some scammers use personal information about you or your family to attempt to coerce an immediate payment for an alleged debt or to address a family emergency.

Business Scams and Frauds
Peter Dazeley / Getty Images

How Do Online Scams Work?

Online scams work because they prey on natural human inclinations to seek gain and avoid loss. An entire academic field, called behavioral economics, outlines the instinctive choices we make, such as:

  • Fear of Missing Out: You can get a big reward, but only if you act now!
  • Loss Aversion: If you don't act now, you'll face even bigger losses later!
  • Reference Dependence: The fee is just a small amount of your winnings!

Scams work because they target people's emotions, not their logic.

How Do Online Scammers Find Victims?

Online scammers find victims in a variety of ways:

  • Email Phishing: Probably the most common online scam, phishing is when fraudsters send out fake emails to trick you into logging into a supposedly trusted website, like your bank, social media account, or favorite shopping platform. Nigerian Banker and Nigerian Prince scams are a type of phishing as well.
  • Mobile Phishing: Like phishing emails, phishing apps want to trick you into downloading malware onto your mobile device.
  • Fake Software: Sometimes called scareware, this often starts with a pop-up window warning that you have a virus. It encourages you to click a link to remove the infection but installs malware on your computer instead.
  • Social Media: Popular social media sites sometimes contain scams that encourage you to click a link leading to malware. Plus, people tend to share personal information on these sites, making them vulnerable to identity theft and socially engineered scams.

How Do I Avoid Getting Involved In This Scam?

Most times, a little vigilance and research can help you avoid online scams. Here are a few tips:

  • Don't post private information on social media: The more you post (including those "20 fun facts you never knew about me" posts that are excellent data-sources for socially engineered scams), the more you empower the people who want to scam you.
  • Don't click unexpected links: If you want to check, for example, your banking information, go directly to the bank's website and log in there. Don't click the login link in a message.
  • Always request documentation: If someone tries to pressure you, ask them to send documentation by U.S. Mail. Legitimate people and businesses will accommodate this request.
  • Never give passwords to people: No one, not even tech support, needs your password.
  • Never give money unless you initiated the transaction: When people need you to give them money, especially when there's no risk to you, then there's high risk to you. Unless you were the one who initiated a purchase or donation, never give money to someone who reaches out to you.

I’m Already a Victim. What Should I Do?

If you've fallen victim to an online scam, there are a few things you should do:

  • Report the scam: Send a report to organizations such as the FTC, the Internet Crime Complaint Center (IC3), and
  • Contact your bank: Ask the bank to reverse any fraudulent charges. The bank can also issue new debit and credit cards, if necessary.
  • Run anti-virus and anti-malware software: If your computer is infected, these programs can remove the virus.
  • Change your passwords: Make sure to choose strong ones.
  • Notify your friends and family on social media: If you've been hacked, let your friends and family know so they don't fall victim to someone pretending to be you.

How Do I Avoid Being Targeted for an Online Scam?

While you can't prevent a scammer from emailing you, you can take some steps to avoid them. Make sure your email spam filter is turned on, for starters. If scam emails make their way into your inbox, don't click any links or open attachments. Report the email as spam and block the sender.