Finance Work & Business

Top 5 Online Scams to Watch Out For

Understand common online scams to avoid becoming a victim

Online scams continue to proliferate and become harder to spot. Scam busting expert James Greening takes a look at the common scams online and how to avoid them.

The internet has connected the world like never before. Communicating with anyone in any part of the world is as easy as a few clicks or taps. However, the virtual world also provides a cloak of anonymity to unscrupulous individuals and criminal groups who dupe unsuspecting victims of their hard-earned money. 

The internet is far from being a safe place but if you know about the dangers to look out for, staying safe is as easy as clicking away. These are the Top 5 online scams that you need to watch out for.

Fake Online Stores

E-commerce scams are the most common ones you are likely to come across. Don’t believe the flashy ads on social media offering great products at unbelievable prices. The truth is, advertising companies like Facebook and Google don’t have any verification requirements such as KYC. Anyone with a working card can advertise on these platforms and a considerable portion of them are scammers.

Ecommerce scams take many forms. There are stores that take your money and send nothing, Chinese stores that bait-and-switch customers by delivering inferior products and fake sites that exist only to steal credit card details. The contact information and refund policies are often bogus, making it difficult, if not impossible, to get your money back.

There are large scam networks operating from China that create hundreds of fake sites daily. These sites run for a few months before being purged and replaced with new ones. Therefore, you should be wary about trusting any online store that you haven’t heard of before, can’t find reviews for and doesn’t let you speak to a real person from the company.

Bait and switch is a common form of online scam where poor quality products are provided in case of the advertised version

The ‘Waldorf Dolls’ bait-and-switch scam, where images of expensive hand-made dolls are used to advertise cheap Chinese ones

Investment Scams

Investing requires a lot of knowledge, skill and patience to get the highest possible returns. Even professionals with years of experience under their belt can rarely get more than a 10% to 15% return on investment annually. Even a famed investor like Warren Buffet generates a 20% ROI in a typical year. In a realistic scenario, 1% to 8% annually is a reasonable expectation and often comes with considerable risk. 

However, scammers exploit the lack of financial knowledge that the layman has, such as what kind of ROI to realistically expect. Investment scammers claim to generate ridiculously high returns like 1% to 10% per DAY and there are many who don’t find this preposterous. 

Buzzwords like ‘crypto’, ‘forex’ and ‘binary’ are thrown around to make victims believe that they are making a genuine investment. Moreover, scammers claim that the returns are guaranteed, which is never the case in any legitimate investment. 

Sadly, when the time comes to withdraw the non-existent profit is when the scam unveils. Victims are asked to pay various fees and only end up losing more money in the hope that they will at least see some kind of returns. That day never comes because the ‘investment opportunity’ is nothing but an Advance Fee Scam. Consider this: Anyone who can double their money in a matter of weeks wouldn’t need to take money from others.

Is it too good to be true? Online scammers often offer very tempting returns to scam people

A typical investment scam promising absurdly high profits like 16% in 24 hours

Recovery Scams

Recovery scams feed off of Investment Scams. Scammers know that a person who has already fallen for one scam is an easy target for another scam. They maintain ‘donkey lists’ of previous victims whom they approach with fake promises of recovering money – money that they have themselves stolen in many cases. All their promises of recovering the funds are fake, especially the impossible claims of recovering cryptocurrency. 

The goal of this scam is to give you false hope that you can get your money back and then hook you on a retainer. It will be months before you realize that you are not going to see a dime of the money you lost and by that time, you have already lost more money by paying the fake company’s retainer fees.

Employment Scams

The Coronavirus pandemic has been a real boon for scammers who prey on job seekers. With scores of people getting laid off from their jobs and working from home becoming the norm, the number of fake job listings has gone up exponentially. 

Scammers contact desperate professionals with too-good-to-be-true job offers and even conduct bogus interviews. After a few rounds of fake interviews, they will send across a dubious offer letter outlining the job description and promised wages. After raising the victim’s hopes and giving them false dreams, they start making demands about money to be paid for various reasons such as ‘processing fees’, ‘equipment fees’ and more. 

Legitimate companies will never ask workers to pay expenses out of pocket. Any fees required will be deducted from payments, not be demanded upfront. 


The word ‘phishing’ is a play on ‘fishing’ because scammers use bait, such as an official-looking email, to get victims to share their personal and financial information. Phishing tactics are getting increasingly sophisticated, making it difficult for someone who is unaware about this scam to spot an email from a dubious source.

For example, you may get an email from ‘Amazon’ telling you that a large purchase worth hundreds of dollars has been made from your account. To cancel the order, you need to visit a link provided in the email, which leads to a page that looks just like Amazon. If you enter your login details on this page, the information will be sent directly to scammers. The email and web page have been both created to mimic Amazon and have absolutely no relation to the company. 

The fake email could be from any organization like banks, utility companies, video streaming sites and more. It could also be a text message. The goal is always the same: scare the user into sharing their sensitive information. As a general rule, never click on links in email and text messages. Always go to the official directly and login to check if there really is any issue.

How to stay up to date with common online scams

Now that you know the most common scams to watch out for, your chances of avoiding them are much higher. Remember, if it’s too good to be true, it probably is.

James writes for the site which is regularly updated with details of online scams. He is also a writer for which details online scams and more.

Stay safe out there!

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