BBB Tip: The Anatomy of Online Scams & How to Spot Them

Keyboard with red button that says scam alert

Every year, thousands of consumers are victimized by online scams. Not only are the number of scams increasing, they’re also getting harder to detect.

According to the BBB Scam Tracker Risk Report, more than 46,000 scams were published on BBB Scam Tracker in 2020, a 24.9% increase over 2019. For all the scams that are reported, many more go unreported.

Online scams are the riskiest kind.

  • Online purchase scams accounted for 38.3% of all scams reported to BBB Scam Tracker in 2020 (up from 24.3% in 2019 and 20.6% in 2018). 
  • Nearly two-thirds (64.7%) of all scams with a financial loss reported to BBB Scam Tracker were online purchase scams.

Common online scams include dog scams, advance fee loans and car rental scams.

One of the best ways to spot an online scam is to learn how scammers behave and what tactics they use.

BBB Scam Tracker Risk Report

The BBB Scam Tracker Risk Report gives consumers helpful insights on how spammers operate.

How Spammers Contact Consumers

The number one method of contact is through a website, followed by social media and email. A minority of scammers use phone calls, online classifieds and text messages.

Impersonating respected brands and their websites is a popular tactic. Amazon has become the second most impersonated brand by scammers after the Social Security Administration.

Scammers are less likely to contact consumers in person as they prefer to hide their identity.

Note: For more information on fake websites, refer to our article on how to check if a website is legitimate.

Online credit card payment

Preferred Payment Methods

Requested prepaid or gift cards and wire transfers through Western Union are often a red flag.

However, the most common payment method used by spammers is credit cards. Next are online payment processors such as Paypal and bank account debits.

How to Spot a Scam

There are many types of scams and variations of those scams. And scammers are constantly planning new scams.

The following tips can help you to spot telltale signs that you might be dealing with a scammer.

#1. Always be on your guard

Whenever a stranger contacts you, always ask yourself whether it might be a scammer. Never assume it’s legitimate, even if they appear to be working for a charity, private organization or known government agency.

For example, the Federal Trade Commission reported that over 35,000 people lost more than $10 million in 2018 in a Social Security Administration scam.

#2. It seems too good to be true

Thinking of going on vacation, and suddenly you’re contacted by a stranger with an offer that’s too good to turn down? Be careful, it might be a scam. If it’s too good to be true, it probably is.

#3. Be wary of unsolicited email or text messages

Never click on links or open attachments in an unsolicited email or text message. It may send you to a fake website or enable scammers to install malware on your device that they use to gain access to it.

Note that even if the email or text message appears to be from your bank or a legitimate service provider, scammers are experts at impersonating these organizations with legitimate logos and attractive designs.

#4. Don’t be pressured to act immediately

Scammers know that the longer a consumer thinks about doing something, the less likely they are to act on it. They will create a false sense of urgency to give the impression that the consumer will lose out if they fail to act immediately.

Legitimate organizations are unlikely to pressure their clients for an immediate decision. If you feel pressured to act immediately, it’s a red flag.

#5. Follow your brain and not your heart

Have you ever received a message saying that an unknown uncle left you a $10 million inheritance or that you won the lottery? Most people will immediately know it’s a scam, but many want to believe it’s legitimate.

Scammers often prey on the desperate and vulnerable in our society. And they often succeed.

#6. Poor grammar and spelling mistakes

Scammers are great at imitating things, like official documents. But if it is full of spelling mistakes and poor grammar, you’re likely dealing with a scammer.

Legitimate organizations will present content or information professionally, without spelling mistakes and poor grammar.

#7. Be cautious of anyone you’ve met online

Social media platforms and dating sites have left us more exposed than ever before. It presents an opportunity for scammers to learn more about us and exploit it for their purposes.

When you meet a stranger online, you might feel safe talking to them in the knowledge that they can’t hurt you physically from a distance. However, many scammers use social media to reach out to people, build a rapport and scam them.

#8. Never share personally identifiable information with a stranger

Scammers often pretend they need your personally identifiable information, such as your social security number, passwords or PINs, to help you resolve an issue.

Don’t share any compromising personal information with strangers.

#9. Problem or prize?

Many scams fall into one of two categories, namely:

  • Problem – They make you believe you have a problem and they are the only ones that can help you.
  • Prize – They can help you claim a prize or reward, for a fee, of course.

When dealing with a stranger online, consider if what they’re saying falls into one of these categories. If the answer is yes, it’s a red flag.

#10. Unusual payment methods

Scammers often prefer payment methods that are hard or impossible to trace, such as iTunes vouchers and gift cards.

Legitimate companies won’t require payment by vouchers or gift cards.

The Better Business Bureau has resources to help consumers and businesses. You can report a scam (whether you’ve lost money or not), file a complaint against a business, leave a review of a business you’ve used and report an ad.

Visit our blog for more tips and scam alerts.

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