Online Financial Scams

Common Online Financial Scams and Ways to Prevent Them

We as consumers are in charge of thoroughly checking online sellers we're unfamiliar with before buying anything online. One important step to prevent online financial scams is to find out whether the company has had any complaints against them and check their ratings with the Better Business Bureau (

The five most commonly experienced scams are:-
  • Merchandise fraud
  • Fake check
  • Phishing Spoofing and Identity theft
  • Travel deals with catches and fraudulent health-products
Amongst these five scams, identity theft tops the list as the most widespread cyber crime and thus it is important to protect your personal information because scammers are always on the watch and ready to strike.

Tips for Avoiding Internet Auction Fraud:

  • Understand as much as possible about how the auction works, what your obligations are as a buyer, and what the seller's obligations are before you bid.
  • Find out what actions the website/company takes if a problem occurs and consider insuring the transaction and shipment.
  • Be cautious when dealing with sellers outside the United States. If a problem occurs with the auction transaction, it could be much more difficult to rectify.
  • Ask the seller about when delivery can be expected and whether the merchandise is covered by a warranty or can be exchanged if there is a problem.
  • There should be no reason to give out your social security number or driver's license number to the seller.

Tips for Avoiding Credit Card Fraud:

  • Don't give out your credit card number online unless the site is a secure and reputable one. Sometimes a tiny icon of a padlock appears to symbolize a higher level of security to transmit data. This icon does not give any guarantee of a secure site, but does provide some assurance.
  • Don't trust a site just because it claims to be secure.
  • Before using the site, check out the security/encryption software it uses.
  • Make sure you are purchasing merchandise from a reputable source.
  • Do your homework and research on the individual or company to ensure that they are legitimate.
  • Send an e-mail to the seller to make sure the given e-mail address is active, and be wary of those that utilize free e-mail services where a credit card wasn't required to open the account.
  • Check with the Better Business Bureau from the seller's area.
  • Check out other websites regarding this person/company.
  • Be cautious when responding to special investment offers, especially through unsolicited e-mail.
With the onset of online shopping and internet banking, there is a significant rise in the number of transaction scams happening every day. Detecting online frauds is difficult. The Internet is where thieves and scammers are skilled at targeting vulnerable people.

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