Stu Sjouwerman is the founder and CEO of KnowBe4 Inc., a security awareness training and simulated phishing platform.
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Online scams have become increasingly pervasive. According to the FBI’s Internet Crime Complaint Center (IC3), billions of dollars are lost to online scams every year and this number is rising exponentially. While fraudulent acts committed by cybercriminals can vary, they broadly fall into these five main buckets:
1. Money, Discounts And Freebies
Money, discounts and freebies appeal to everyone’s desire to find a bargain. From playing the lottery to entering sweepstakes to tax refund scams that promise 75% savings, there are an untold number of ways con artists scam people into giving up their identity or financial information like bank account and credit card numbers.
2. Employment Scams
Job scams are another tactic used by fraudsters. Scammers start by creating an online presence of a fake company complete with fictitious employees and social media profiles. Then, job seekers are lured with the carrot of lucrative pay or easy employment terms. On the pretext of completing the employee onboarding process, scammers steal personal information such as social security numbers and contact information. Sometimes they request an advanced service fee to complete the employment process.
3. Romance Or Friendship Scams
These scams consist of criminals creating fake online profiles and registering themselves on social media and dating sites. They invest a lot of time building a trust bond with the victim and, once trust is established, they ask for favors or money. Examples include soliciting medical treatments for a sick family member or money for travel.
Sextortion, where someone threatens to distribute private material (e.g., nude photos) if their demands are not met, is also common. According to iC3, Americans lost $956 million to romance scams in 2021.
4. Fear Or Threat
Scammers are known to exploit public fear by using it to hook victims. Examples include messages such as:
• “You will lose all your data and photos, and only our software can help fix it.”
• “Pay your electricity bill now, otherwise you will lose power.”
• “This is a warning from the local tax authority. Complete this action now or face a fine or court action.”
• “Your Netflix service will terminate unless action is taken.”
The Covid-19 pandemic provided a major resource for scammers to exploit fear and uncertainty.
5. Tech Support Scam
Here, scammers pose as service representatives of known household brands to offer assistance to fix a problem that doesn’t exist or offer tech support you don’t need. Unsuspecting victims allow these unauthorized technicians to access their computers remotely and then install unwanted programs or malware that can steal sensitive information or corrupt data and services. Per FBI estimates, U.S. tech support scams caused losses amounting to more than $347 million in 2021, up 137% from 2020.
Social Media Scams On The Rise
While it’s common for fraudsters to use phone, web and email to scam online users, the FTC warned that social media scams are quickly becoming the “weapon of choice” for cyber scammers. According to the FTC, more than 95,000 people in 2021 fell victims to fraud initiated via social media platforms. Losses from social media fraud alone amounted to a staggering $770 million, which is almost a quarter of all reported losses to fraud in 2021.
Social Engineering Red Flags
To avoid falling victim to online scams, it’s imperative that consumers be extremely cautious and alert while communicating and transacting online. Start by keeping an eye out for these social engineering red flags:
• Watch out for “stressor events” that exploit emotions to make victims act impulsively. Scammers can urge a victim to rush to close a deal that will “expire soon” if the transaction is not completed.
• Avoid clicking suspicious URLs or downloading file attachments from unknown senders or responding to untrusted people.
• Be wary if someone is willing to purchase a product or service at a premium, especially if they say they’re willing to pay by check. Fraudsters propose issuing a check to buy something for more than its stated price with the promise of refunding the difference before the victim discovers the check is bogus.
• Be suspicious if the scammer is unable to speak on the phone or meet in person or comes up with excuses to make a financial transaction in an unconventional manner (e.g., payments via gift cards or cryptocurrency).
• If someone calls you unexpectedly and offers assistance, find a way to verify their identity. Do not allow an unknown person to remotely connect to your computer without proper verification, even if they appear to have a solution to your problem.
Most online scams are surprisingly easy to spot. Studies show that frequent security awareness training exercises are incredibly effective at reducing the chances of a cyber security incident by up to 70%. If you believe you are a victim of internet fraud, contact your local FBI office and file a complaint with the IC3.
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