How to Protect Yourself From Online Fraud
Tips to Keep Your Accounts and Information Safe
Millions of people each year are targets of internet scams and online fraud. It can be tough to keep up with the crooks and con artists, who are constantly changing their techniques to keep ahead of the authorities.
However, there are some simple but important steps you can take to protect yourself from online fraud. Learn more about what you can do to prevent being a victim of a scam.
What Are Internet Scams?
An internet scam is the use of websites or online software to take advantage of someone by stealing their identity or their money.
Millions of dollars are lost to online scams each year, and these crimes affect people of every age. Millennials are 25% more likely to lose money to online fraud than people ages 40 and older, while people over age 40 are more likely to lose higher amounts when they are victimized.
How Online Scammers Get Your Information
Internet scammers use many different methods to try to con, deceive, and defraud people.
Online shopping scams
In an online shopping scam, a consumer tries to purchase a product online, perhaps from an e-commerce site or an online auction. However, they never receive what they ordered, and when they file a complaint with the supposed retailer, they never receive a full refund, nor do they receive what they ordered.
In some cases, the consumer never receives any reply at all, and the scammer simply disappears with the money.
In a data breach, private, sensitive information, such as personal information or financial data, is accessed or leaked by an unauthorized party. Unscrupulous people may then use that private information to conduct any number of misdeeds, including taking out fraudulent loans or hacking into financial accounts.
Data breaches have occurred at Target, Home Depot, Neiman Marcus, T-Mobile, Kmart, Staples, UPS, Anthem, Blue Cross, JP Morgan Chase, Adobe, eBay, Twitter, and the federal government, just to name a few.
Credit card fraud
Scammers may illegally obtain a person's credit card or debit card information, then use it to make purchases or draw cash advances.
Phishing (also known as spoofing) is an online scam in which someone uses fake emails or bogus websites to trick people into giving up their personal or financial information. The phishing victim thinks they are dealing with a legitimate entity, but in reality, the phisher is a scam artist who then steals the victim's identity, passwords, or financial account information.
How to Keep Your Information Safe
Common sense and a “trust but verify” approach is the best way to protect your accounts from online fraud. Below are some simple things you can do to protect yourself:
- Change passwords. Change your email password frequently, and don't use the same password for your email as you do on other accounts. Use secure passwords that have capital letters, numbers, and special characters. You can also try a password vault such as LastPass; it encrypts all your data, suggests secure passwords, and will make sure your passwords aren’t used twice.
- Only trust encrypted websites. Encrypted websites start with "https" instead of "http." Your browser may also display a lock icon to show that the site is encrypted. It's not a guarantee the site is safe, but it's an indicator that it's more secure.
- Don’t email signatures or account numbers. Don't send full account numbers, passwords, wiring instructions, or other personal information via email. Use a secure file-sharing service to send documents that have personal data or signatures and simply make a phone call if you need to give an account number.
- Verbally confirm any wire transactions. Don’t wire money to strangers. If you are wiring money for a transaction such as a real estate closing, call the person requesting the wire to make sure the request is legitimate. And if you're wiring money to a relative, such as a grandchild, double-check the request with a phone call.
Scammers have been known to use emotion and urgency to convince people a loved one is in financial trouble and needs funds quickly.
- Don’t open attachments or click on email links from unknown sources. Clicking on an email link or opening an attachment from an unknown source could download a virus to your computer. Don’t click on email links if you don’t recognize the sender. If you receive an email claiming to be your bank requesting information, don't click on a link in the email; it could send you to a fake website. Visit the bank's website on your own or give them a call instead, and be sure to use a number you've verified is real. Always be cautious with unsolicited emails.
- Turn on two-factor authentication. This is a type of security feature that requires two forms of authentication, such as your password plus a special code texted to your phone. It's an extra layer of protection in case your password is stolen.
Report Online Scams
If you suspect you've been the target of an online scam, report it to the authorities.
- For phishing scams: Forward the email or text message to the Anti-Phishing Working Group, email@example.com. Then file a report with the Federal Trade Commission (FTC) at ftc.gov/complaint/.
- For internet scams: Report the crime to the Internet Crime Complaint Center (IC3) of the Federal Bureau of Investigation (FBI) or use their online tip hotline.
- For online shopping scams: You can send a complaint to Econsumer.gov if you've had a problem with foreign online shopping sites.
Reporting these scams could help you recoup your losses. It also helps the authorities find out what techniques criminals are using, so they can try to stop these crimes before they happen and teach others how to protect themselves.
The Bottom Line
Online fraud can affect people of any age, and it costs consumers millions of dollars a year. Protect yourself from online scams by carefully vetting the websites you visit, using caution with unsolicited email, and changing your secure password frequently.