Avoid Common Online Scams

By Lianne     January 30, 2015   |  back to Flipit plus

Don't fall for these common online scams

There are many scams out there that will leave you broke and reeling -- in this age of online payments and transactions, scammers are getting better and better at what they do by making their scams appear to be the real deal.

Here are a few common scams to keep an eye out for, and some suggestions to make sure you don't accidentally fall prey to a deal that is, in fact, too good to be true.

Money transfer scams

Wire transfers are a favorite of scammers because the money can be picked up in cash and is virtually impossible to trace. Scammers will insist that you wire them money, or will send you a fake check. By the time you realize that the check bounced you will be the one responsible for reimbursing the bank -- meanwhile, the scammer is long gone, along with your money.

When buying or selling products online, particularly through consumer-to-consumer sites like eBay or Craigslist, look out for some of these common scams:

  • Overpayment: if you're selling something online never accept a check or money order for more than your asking price. Scammers will send you a fake check then ask that you reimburse them the difference; when the check eventually bounces the victim is on the hook to pay the bank back for any money withdrawn -- meanwhile, the money you sent to the scammer is long gone.
  • Fake tickets: con artists have been known to print out fake event tickets and sell them to unsuspecting buyers. Depending on the event, these tickets can set you back hundreds of dollars, and you won't realize the ticket is fake until you try to use it.
  • Bait and switch: in this scam, the con artist will buy an item you're selling but claim that it arrived broken or damaged. In fact, the scammer has an identical (broken) product which they will then try to return for a refund -- ending up with the perfectly functioning product and your money! This eBay scam can be difficult to spot, so protect yourself by writing down the serial number of the product you are selling, or, if possible, make a non-removable mark somewhere on the product so you can recognize the original.

Some general tips to keep in mind when making transactions online: 

  • never use a money transfer or wiring service to send money to people who you haven't met in person
  • never give your banking information to people or businesses you do not know or trust
  • never reimburse someone for a payment made to you by check until you call your bank and verify that the funds have cleared

Rental scams

Another common trick is for scammers to pose as homeowners looking to rent their house or apartment. The fake owner posts a legitimate-looking advertisement, often offering a place in a great location and at a great price.

The victim reaches out to the "owner" and is told that the place is theirs if they send a deposit or application fee. Often the "owner" will insist that there are many other people interested in the property, so the victim feels pressured to send money ASAP. Once the money is sent, however, the "owner" disappears and the listing is removed.

In another scenario, a legitimate homeowner looking to rent his or her home is scammed by someone claiming to be interested in renting the property. The "renter" expresses interest in the hosue and sends a fake check for the deposit. Shortly thereafter, the "renter" cancels the deal and asks that the money be sent back. Once the owner finds out that the check was fake, it is often too late.

Employment and get-rich-quick schemes

These kinds of scams usually start with an offer that sounds too good to be true -- work from home and earn thousands of dollars a month, no experience necessary -- and end with the victim without a job and out of money.

A common type of employment scam is the mystery shopper scheme: scammers will send a fraudulent check, then ask that you deposit it in your bank account and pay an application or training fee back to them. Legitimate mystery shopping companies do not send their clients a check prior to their work being completed; rather, they reimburse expenses after they're made. You should never have to pay to be a mystery shopper -- being asked to do so is a red flag that it is a scam.

Similarly, get-rich-quick schemes that claim you will earn lots of money after making a "small" investment upfront are just another way for scammers to cheat you.

  • be skeptical of any job offer that requires you to pay money up front
  • be cautious when dealing with people who claim to be overseas or are out of the country on business; scammers tell their victims this to explain why they can't meet in person
  • poor grammar and spelling mistakes in job advertisements are another giveaway that the job ad could be fake

Emergency scams

These scams work by preying on victims' sympathy -- a scammer will send out a letter claiming to be in an urgent situation (I've just been mugged or hospitalized in a foreign land) and target well-meaning people with pleas for help -- and their money.

Some of the most effective scammers will find ways to impersonate a victim's loved ones, usually by using social networking sites to glean personal information. Some scammers will even hack into someone else's email account to send out personal messages to their contacts asking for money.

Verify that an emergency is real by contacting the loved one in question through a different means -- ideally in person. Remember that scammers will pressure you into wiring money because it's untraceable and irretractable -- urgent requests to have money wired should be regarded as a red flag.

Romance scams

In order to be successful, scam artists must win your trust and confidence. Nowhere is this more true than with romance scams, and the age of online dating has made these cons more common than ever.

The scam usually begins with the scammer cultivating an online romance, then revealing that they need help paying off debt or leaving their homeland so that they can meet you in person. The scammer requests that you wire them money -- or they might launder money through you by sending you a check and ask that you transfer the money back to them. Once the money is in their hands, however, the love interest vanishes without a trace, and the hapless victim ends up in debt and broken-hearted.

Resources to help you avoid scams

The Better Business Bureau and Western Union have teamed up to create Scam Stopper, a thorough list of common scams and ways to avoid them

If you're ever in doubt about a business or charity's authenticity, search for it on the Better Business Bureau

Take the Fraud Quiz to assess your knowledge of online scams

If you've come across a scam, report it to the FTC or your state Attorney General to keep others from falling for it


About an editor Lianne,

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