Online Purchase Scams: A Persistent Threat

Online purchase scams remain a significant risk factor, according to the Better Business Bureau. While median losses were relatively modest at $100, over 40% of the scams reported to the BBB were online purchase scams, and more than 80% of individuals reported falling victim to these schemes.

Some scammers establish fraudulent e-commerce stores and purchase advertisements for their websites on social media platforms. Alternatively, they may list items for sale on online marketplaces, including those operated by social media platforms.

In either case, scammers may deprive you of your funds without providing any compensation. Alternatively, they may engage in triangulation fraud, purchasing the item you purchased with someone else’s stolen credit card. Consequently, you may remain unaware that you have been a victim of a scam until you attempt to return the item or utilize a warranty.

To mitigate potential losses, it is crucial to be vigilant and identify suspicious indicators such as excessively low prices, inadequate information, or aggressive sales tactics. Utilizing a credit card can also assist in limiting potential financial losses, as you have the option to initiate a chargeback in the event that you do not receive the product or service.

Employment Scams

Employment scams employ alluring and challenging-to-identify tactics to target individuals seeking employment. Some scammers adopt a gradual approach, conducting interviews and operating with a legitimate appearance. Subsequently, they collect personal information from your employment forms or request the purchase of equipment or training.

Other scams swiftly present themselves, promising guaranteed or effortless income in exchange for program enrollment. Occasionally, a fraudulent employer may send a substantial paycheck and demand the repayment of “extra” funds, employing a variation of the prevalent overpayment scam.

The Federal Trade Commission (FTC) reports a surge in reports regarding task scams, where individuals are hired to perform repetitive online tasks. These reports have increased from approximately 5,000 during the entire year of 2023 to 20,000 during the first half of 2024.

Initially, small withdrawals may be possible. However, the scam unfolds when you are informed that increasing your earning rate requires payment, and deposits are necessary to unlock larger withdrawals. Despite making the payments, you are unable to retrieve any funds, nor do you receive your purported earnings.

Additionally, you may encounter job opportunities that involve receiving money and transferring funds to another account, or receiving and reshipping packages. These “money mule” and “reshipping mule” jobs are frequently associated with illegal operations, and you may incur personal liability.

Imposter Scams

Imposter scams are one of the most prevalent types of scams or fraud due to their broad categorization. These scams typically involve a scammer disguising their identity as a friend, relative, celebrity, politician, businessperson, government agent, delivery person, or company representative.

Some imposter scams have gained specific names, such as the grandparent scam (although it does not always involve a grandparent) and romance scams (which may involve platonic rather than romantic relationships).

According to the Federal Trade Commission’s (FTC) 2023 Consumer Sentinel Network Data Book, approximately 20% of individuals targeted by imposter scams in 2023 experienced financial losses, with a median loss of $800. Notably, the FTC reported a significant surge in losses for government imposter scams during the initial three months of 2024, with median losses reaching $14,740.

Ameans the most hazardous scam in its 2023 BBB Scam Tracker Risk Report. While the median losses were not the highest at $3,800, over 80% of individuals targeted reported financial losses.

Given the increasing capabilities of AI, it is paramount to exercise caution when interacting with individuals, particularly when they attempt to intimidate you or present you with gift or investment opportunities.

Romance Scams

While romance scams aren't new, they remain a popular scam and are a prime example of how scammers can use generative AI to trick victims.

Scammers often steal someone's identity or create fake profiles on dating and social media apps to meet victims. There's no surefire method to detect a fake. Some will use AI to deepfake video calls, and some crime organizations even force people or hire models to conduct romance scams.

After gaining your trust, the scammer might ask you to buy them something, ask for money, or give you an investment "tip" that's part of the scam. Or, the person may "mistakenly" send you money and ask you to send it back or forward it to someone else. If your bank later determines that their payment was fraudulent, the sum of the payment will be subtracted from your account.

Many romance scams start with text messages, private messages on social media, or in dating apps. And they can target anyone—some scammers even seek to form platonic rather than romantic relationships.

To avoid scams, be cautious of unsolicited contacts, requests for personal information, and pressure to act quickly. Also, be wary of deals that seem too good to be true, unusual payment methods, and vague contact details. If you're unsure, verify the source and don't rush into any actions.

How to Prevent Scams

While scammers’ methods and messaging can rapidly evolve, implementing several fundamental security measures can effectively safeguard you against the latest and most prevalent scams:

• Exercise Caution When Contacted: Be wary of individuals who initiate contact with you. Scammers employ techniques such as spoofing calls and emails to impersonate various sources, including government agencies, charitable organizations, banks, and multinational corporations. Refrain from sharing personal information, usernames, passwords, or one-time codes that could be exploited for account access or identity theft.
• Refrain from Clicking Unknown Links: Regardless of the source—email, text message, or direct message—never click on unknown links. Unless you are certain of the sender’s intentions, refrain from clicking on any links. If the message claims to originate from a company or government agency, contact the entity directly using a verified phone number to ascertain its legitimacy.
• Be Vigilant with Your Phone: Similarly, if you suspect a spam call, refrain from responding or pressing any buttons. The safest course of action is to hang up or ignore the call entirely. If you are concerned about potential issues, you can research the organization and initiate a call.
• Update Your Devices: Software updates often incorporate crucial security measures that can enhance the protection of your phone, tablet, or computer.
• Enable Multifactor Authentication: Add this feature to any accounts that offer it as an option. Utilize a non-SMS version to safeguard against SIM swapping.
• Conduct Thorough Research Before Taking Action: Prior to making a purchase or donation, allocate time to thoroughly research the company. Conduct a web search for its name combined with “scam” or “reviews,” and explore reputable charities on Charity Navigator and CharityWatch.
• Refrain from Refunding or Forwarding Overpayments: Be cautious whenever a company or individual requests a refund or forwardage of a payment. Frequently, the original payment will be fraudulent and subsequently recouped.
• Suspicious Payment Requirements: Be vigilant against scammers who request payments via unconventional methods such as cash, wire transfers, money orders, cryptocurrency, or gift cards. These payment options can be more challenging to track and cancel compared to traditional methods, potentially leaving you without recourse in case of fraud.
• Family Password: Implement a family password that can be shared by all members to verify the authenticity of phone calls. This measure helps prevent impersonation by deepfaked videos or cloned voices.