The online financial scams you might not spot

It’s not always easy to spot a financial scam, designed either to part you from your money or to steal your identity in order to get access to your finances. We might think that surely nobody now falls for those emails claiming to be from a deposed Nigerian prince who wants to put his millions into your bank account for safekeeping, but in fact many people still do. Furthermore, the fact that scams like these seem so easy to spot can lull us into a false sense of security. We think we’re too savvy to be fooled, but more obscure and less obvious scams can sneak in under our noses as a result.

Auction sites

As well as sending fraudulent emails and setting up fake or disreputable websites, scammers also take advantage of online auction sites like eBay. If someone buys an item from you or makes a winning bid, but then explains they need to pay by cheque, be very wary. If they then say that they need to send you a cheque for a fixed amount that is more than the agreed price, insist they send you only the agreed price via a trusted online payment method or refuse to deal with them.

This is a scam in which they send you the cheque but get you to transfer them the excess amount (the difference between the figure on the cheque and the sale price) before the cheque inevitably bounces. Written down like this it might seem like you’d never fall for this scam, but in the heat of the moment, when you both want to complete your sale and be helpful to a buyer who seems charming and genuine, you may not realise that you’ve been had until it’s too late.

Trading scams

In 2017, The Independent reported that pensioners were being conned by binary trading scams and in many cases were losing thousands of pounds from the pension pots they’d built up over a lifetime. Since the pension regulations changed in 2015, retired people have been able to access their whole pension in a lump sum. They then have the freedom to invest it as they please, in the hope that they can make it stretch a bit further.

There are many legitimate binary trading platforms, but as a novice, it’s very hard to spot those that are fraudulent and avoid them. The best advice is to always check for information on whether a given site should be trusted or not. Legitimate trading platforms should be regulated by the Financial Conduct Authority (FCA): those that aren’t can’t be pursued by the financial ombudsman as they are outside its jurisdiction.

With this type of scam, “brokers” at fly-by-night websites persuade victims to keep investing more money, assuring them that it’s safe and that big rewards are just around the corner. Various reasons are given as to why they can’t withdraw their funds just yet before the money suddenly disappears from their account and is never seen again. In this case it’s not the type of online trading that is the problem: these “brokers” aren’t investing their victims’ money at all, but are just taking as much of it as they can for themselves.

Beware of dubious surveys

Scammers try many methods to harvest your personal information in order to steal your identity. They could then potentially use this to access your bank account or online e-payment account like PayPal. Be very cautious when filling in surveys online that seem to ask for too much information, especially if they offer fabulous prizes like free holidays.

Similarly, look out for phishing emails that seem to be from reputable companies asking for information. Often the email address is just slightly wrong or the tone of the email seems off. Never click links in these emails or reply to them: if you’re unsure, contact the company directly.

Dangerous fun

Games and puzzles on social media that ask “What kind of [x] are you?” or “Find out your [x y] name by answering these questions” may seem like harmless fun. But often the questions they ask you are typical verification questions used for online banking, like the name of your pet, the road you grew up on, or your mother’s maiden name. Be very wary of divulging this information in a casual manner.

We can’t ever assume we’re immune to being scammed online. Always proceed with caution and think twice about giving away any information. Be even more cautious about sending or investing money to anyone you’re not 100% sure of. Scammers are always coming up with new tactics, and it’s up to us to be on our guard.

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