Top 10 Online Scams of 2020

2020 was quite an unusual year for all of us. There was confusion and uncertainty all over the world due to the pandemic and society is slowly crawling towards normalcy. With people being forced to stay indoors, the internet played a crucial role in helping them carry out their daily activities. Now that the internet is the go-to place for various needs, online scammers have seen an exponential growth in the number of potential victims. 

As per our Global State of Scams report, an increase of 40% in online scams can be expected for 2020. Several countries report that online fraud is becoming the most reported crime. There are several different types of online scams as scammers keep coming up with innovative ways to defraud consumers. In this article, we have listed the Top 10 Online Scams that netizens need to watch out for.

The Top 10 Online Scams in 2020

• Advance Fee Scams
• CoViD-19 Scams
• Counterfeits/Low Quality Products
• Phishing Scams
• Pyramid/Ponzi Schemes
• Romance & Dating Scams
• Sextortion Scams
• Subscription Scams
• Tech Support Scams
• Work from Home Scams

Advance Fee Scams

The Advance Fee Scam is a very old scam that persists to this day due to a lack of awareness. This scam has many forms - an email informing you that an unknown distant relative has left millions of dollars in your name, a SMS announcing that you have won a lottery that you never entered, someone you met on Instagram telling you that your money can be doubled in 24 hours and many more.

You will be promised an unexpected windfall of thousands or millions of dollars The key part of this scam is that you will need to pay a certain amount upfront, often cited to be a ‘processing fee’, a ‘withdrawal fee’, or whatever other imaginary reason the scammer can come up with. Once you pay the fee, there will be more fees to be paid. The enormous sum of money promised will never reach you, because it simply does not exist. 

Beware of anyone insisting that you make the payment using cryptocurrency or gift cards. These methods are impossible to trace and preferred by scammers. To know more, read the article about Safe Ways To Pay Online.

Beware of anyone insisting that you make the payment using cryptocurrency or gift cards. These methods are impossible to trace and preferred by scammers. As per the BBB Scam Tracker Risk Report (2019), a combined 2,700 cases of Advance Fee Loan scams and Sweepstakes, Lottery, Prize scams were reported in USA and Canada. Consumers lost $847 per case on average.

CoViD-19 Scams

The fear and desperation caused due to the Coronavirus pandemic set the perfect stage for scammers to carry out a number of different cons. CoViD-19 scams emerged through pretty much every channel such as websites, emails, text messages and social media pages.CoViD-19 scams refer to scams carried out under the pretense of helping cure the disease or to help those whose lives have been affected due to the lockdown.

Scammers tried to take advantage of people in all kinds of ways like peddling fake cures, announcing fake relief funds, faking donation requests, setting up fake stores to sell pandemic-related essentials such as masks and more. Over 660,000 CoViD-related domains were registered by June 2020 and it was reported that Coronavirus-related domains were 50% more likely to be malicious.

Counterfeits/Low Quality Products

Probably the biggest online scam affecting the western world is the scourge of fake stores claiming to sell items such as clothing and electronics at deep discounts. Data suggests that these stores originate predominantly from China. However, the websites go to varying lengths to conceal their country of origin. In our blog section, we have written about several scam networks that are making online shopping a nightmare for consumers. 

Ordering from these websites often turns into a bad experience. The modus operandi is to copy images from legitimate websites and advertise heavily using Facebook, Instagram, Pinterest and Google Ads. The products that are shipped turn out to be low-quality counterfeits that barely resemble the products that the consumers thought they were ordering. 

Even paying through a relatively safe method like PayPal is not completely secure in this kind of scam, as the scammers deploy various tricks to deny refunds. They may give out fake tracking numbers to show PayPal that the product has been delivered, or they may demand that the product be returned to China at the buyer’s own expense (often higher than the cost of the product). If the buyer disagrees, they may offer a partial refund, which is still profitable for the scammer as the products they send out cost almost nothing to produce.

Phishing Scams

Phishing scams come in the form of phone calls, emails and text messages that are designed to impersonate a legitimate company. For example, you may receive an email from ‘PayPal’ that there is a problem with your account that needs to be resolved immediately, or you might receive a message from ‘Netflix’ offering you a month’s free subscription if you answer a survey. The real purpose of these messages is to steal your personal information and login credentials.

Phishing scams are relatively easy to avoid if you are vigilant. Verify whether the email or message has come from an official email ID and check whether you are being redirected to the company’s real website. Avoid clicking links in messages and emails, and only login by going directly to the original website. According to statistics, 96% of phishing attacks are carried out through email.

Pyramid/Ponzi Schemes

Many of the investment opportunities available online are fraudulent schemes. While investments through legitimate means can generate between 1% to 15% per year, scammers offer the same kind of returns on a daily or weekly basis. They use fake identities and approach people directly through social media websites or by running online ads. They target people who are not active investors and are therefore not savvy enough to recognize the absurdity of the scammer’s promises. 

The concept behind Ponzi and Pyramid schemes is to ‘rob Peter to pay Paul’. In the case of Ponzi schemes, scammers pose as forex, binary options or cryptocurrency traders. They often claim to have expertise in all three, even though there is not much overlap between them in reality. Payments are required to be made using cryptocurrency, making it practically impossible to recover the money once the payment has been made. A small part of the deposit from Investor A is given to Investor B as their ‘profit’, which may entice them to invest bigger amounts. The scammer then suddenly disappears with everyone’s money. 

The case is similar with Pyramid schemes, but they operate on a bigger scale as it is mandatory for investors to bring in at least two more people to invest in the scheme. Investors are indirectly bribed to trap more people into the dishonest scheme as they receive a commission for every deposit made by their referrals. The only money coming into the scheme is from investors themselves as the company has no tangible product or service. These kinds of schemes are unsustainable as there will inevitably be a point when no more people join. The revenue stream slowly runs dry and the operators of the scam disappear with everyone’s money. 

Romance & Dating Scams

Romance and Dating scams are mainly of two types. The first is that someone randomly messages you on social media and over the course of a few days or weeks, claims to have fallen in love. The scammer can string the victim along for months, sending pictures stolen from a real person’s account. Eventually, they will start demanding gifts or money. The most obvious sign of this kind of scam is if they keep making excuses to avoid a video chat or refuse to meet in person. 

The other kind of romance scam is where a dating app/website owner may pay people to chat with the opposite sex. The person on the other end will pretend to be romantically interested and request the user to make various in-app purchases or upgrade their subscription. The ploy is to make the person looking for love spend as much as possible on the platform.

Sextortion Scams

This kind of scam involves sending out emails to individuals claiming that the sender is a hacker who has managed to capture videos of the recipient while they were engaged in sexual activities. The recipient is blackmailed that the video will be released to their friends and family unless they pay a certain amount using Bitcoin. These threats are completely false and the emails are sent out en masse to hundreds of people at once. An easy way to tell that the email is fake is that it will never include any personally identifiable details, except maybe the recipient's name.

According to a five-month long study by Check Point Research in 2019, attackers used devices infected with malware to send out 30,000 sextortion emails every hour.

Subscription Scams

Subscription scams involve getting users to share their card or bank details in exchange for a free trial or a gift. People neglect to read the fine print which might state that they are agreeing to subscribe to a service. The consumer may realize months later that they are being charged regularly, usually from an unrecognizable company. Cancelling the subscription might also turn out to be a difficult task as the company may not be contactable. 

The subscription can be cancelled by requesting the bank to stop any further charges, but the amounts already deducted are usually not recoverable. Read our article 97 'Brain Training' Sites Trying to Get Your Money about a large network of websites that use the tactic of promising free Apple products in exchange for sharing payment details. The small print on these websites states that the user will automatically be signed up for a recurring subscription, which most people do not realize they are agreeing to.

Tech Support Scams

The main weapon of Tech Support scammers is to set up fake websites resembling real ones, such as those of anti-virus companies. They also run search engine ads displaying fake customer care numbers of companies like Microsoft. This kind of scam targets the elderly who may not realize that the scary pop-up saying that their computer is at risk is fake. 

When they call the fake customer support number, the scammer may take access of their computer through remote-viewing programs like TeamViewer or AnyDesk and pretend to help them with the non-existent problem. The unsuspecting victims are swindled for hundred or thousands of dollars by the scammers under the pretense of ‘fixing their computer’.

Work From Home Scams

Work From Home scams saw a huge uptick owing to the pandemic, as many people lost their jobs. Desperate unemployed people are easy prey for work-home-job scammers, as these jobs require bare minimum qualifications. Additionally, they promise high pay for low-effort jobs such as data entry. The catch is that these job offers are nothing but a variation of the Advance Fee scam, where the company will demand a payment, such as an ‘account maintenance fee’, ‘account upgrade fee’, ‘membership fee’ and more. Real companies and recruiters will never ask you for a payment. Read our article about Job & Employment Scams to know how to spot these scams.

The fee might not be demanded outright. The scammer will make the worker invest their time by asking them to complete a huge volume of work within an impossible deadline. When the worker is unable to complete the work, they will threaten them with legal action for causing damage to the company. Then, they will agree to stop the legal action if the worker agrees to pay them a certain amount to settle the matter. Alternatively, the company may ask for a ‘withdrawal fee’ once the work has been completed. 

The prevalence of online scams only seems to be increasing with each passing year. Scammers are winning in 2020 and the situation may not improve in 2021 either; it might possibly even get worse. By knowing the most common scams and the signs to watch out for, you can prevent falling victim to them and prevent others from becoming victims too. Awareness is the most important tool for fighting scams.