In 2010, victims lost over $388 Billion to online fraud and scam schemes. Norton Cybercrime Report stated that the number was up by 3% by the following year, and by 2018, a McAfee report states that the figure had climbed to over $600 billion. It’s not difficult to see why victims are losing so much money; the anonymity and reach provided by the internet have encouraged fraud practices.

Today, victims lose money in various schemes, from fake purchases to lottery scams, and even advertising on fake websites. Advertisers seem to be receiving the worst of it because, in 2021, click fraud alone was estimated to cost marketers over $42 billion, according to Cheq.

So, what are the different kinds of scams online today? How do they work, and how can you protect yourself? 

What are scam schemes?

Scam and fraud are two different practices, although the terms are often used interchangeably. In an online scam, someone always loses money or resources – time and energy – to scammers, usually through a scam website.

Many common scams are incredibly simple and easy to spot. For example, the scammer could pretend to be a celebrity and ask you for a small amount of money.

Some other internet scams are incredibly complex and involve a scam website that’s a replica of websites like Amazon. These are known as spoofed websites. 

You’ll even see fake discount coupons or forged documents from your bank account. There are also identity theft scams, credit report scams, and scams that offer free money from the government.

Most online scams have a singular end result – the scammer takes your money and runs, and some people who fall victim sometimes don’t realize they’ve been scammed until much later.

Popular scam schemes on the internet

Instagram scams

With over 2 billion users, Instagram, unfortunately, provides a target-rich environment for scammers. One of the most popular ones is the follower scheme. Here, an app or website would promise to get you hundreds or even thousands of new followers, and all you had to do was provide your username and password. Many of the scam sites even have designs that closely resemble the legitimate site. 

After submitting login details, users would swiftly lose their accounts to scammers. Following that, some scammers reach out to family and friends asking for a loan, while others promote illegitimate products. 

In some other cases, scammers don’t touch the Instagram account and instead use the login details obtained to access user accounts on other platforms since most people use the same password for most platforms.  

Phishing scams

While Instagram ads aim to exploit people’s desire for internet fame, phishing scams are designed to exploit the gullibility in us all. In a phishing scam, attackers use bait, often emails that are crafted to appear as legitimate as possible, to trick users into providing credentials or access to personal or financial information.

One particularly dangerous form of this is called the spear phishing scam. Here, the attacker targets a few high-level individuals in legitimate companies with access to sensitive information. It’s common for attackers to spend weeks and even months building the target’s trust.

Eventually, the attacker sends what looks like a legitimate email to the target, leveraging the trust they’ve built. When the target clicks the email, they land on a phishing site and unwittingly give the attacker the access they seek.

Lottery scams

Here, the target gets a message that they’ve won a life-changing amount of money. But they need to contact someone and pay “processing fees” to receive their winnings. They work because most people are willing to part with a few hundred dollars to win several million.

Tech support scams

In a tech support scam, you’ll receive an email or text message that your PC has been compromised and that you need to reach out to tech support for assistance. The support then asks you to pay a ridiculous fee via wire transfer, gift cards, or cryptocurrency to clean your PC.

Credit card scams

Credit card scams are a little more sophisticated because they involve special devices known as skimmers. These capture information stored in the credit card’s magnetic strip, which the scammer uses to create a counterfeit card. The scammers may sell the counterfeit cards or use them for untraceable purchases. 

What are fraud schemes?

Fraud schemes are perpetrated on websites designed to steal your money, confidential information or install spyware on your computer. 

One of the biggest forms of cybercrime is ad fraud, which has recently eclipsed credit card fraud as the most costly fraud scheme. By targeting advertisers, ad fraud diverts money to fake publishers, often taking a payout for ads that have never been seen by humans.

Other online fraud schemes are also often used to get people to install malware or some sort of spyware on their computers. Here, the fraudsters either steal users’ private data or use their PCs for unauthorized activities like cryptocurrency mining and hacking. 

Popular fraud schemes on the internet

Click fraud and ad fraud

Ad fraud is a broad category that includes malicious activity around online advertisements. Click fraud is a type of ad fraud, but it often extends to cases like hidden ads, competitor clicks, and even pixel stuffing. 

Here, perpetrators click on ads as often as possible without generating any actual traffic or conversions for the advertiser. Fraudsters often use click farms – online services designed to offer fake traffic for various purposes – to generate these clicks, racking up ad spend. Fraudsters may also use click bot software to achieve the same goal. 

Find out more in our complete guide to click fraud.

Crypto based fraud

As crypto has grown, it is often seen as a way to ‘get rich quick’. However, criminals deploy many sites and projects monthly with the simple goal of defrauding people. This might include stealing the login details to their storage wallets or exchanges, or simply coaxing people to invest in fake crypto schemes.

Fake courier/delivery scams

These fraudulent sites exist to harvest your passwords or payment details. By emailing or messaging you explaining that you need to pay a fee to release your parcel, you give up both your personal information and probably a lot of money too…

Fake products

There is a growing trend for websites offering what appear to be high-quality goods, which are, in reality, inferior copies. These use the old bait and switch technique, tempting you to pay for what might appear to be a high-value product (Japanese knives, leather shoes) and then what you receive – months later – is not what is advertised. By then, the site has closed down, and you’re left with a crappy product.

How to avoid fraud and scam schemes

1. Double check the sites you visit

Some malicious websites go to significant lengths to replicate the original, but there are always glaring differences. It could be in the logo, the grammar, or even the fact that the site is a single page. 

Another easy way to identify fraud sites is to look them up on sites like fakewebsitebuster.com and scamadviser.com. These publish scam reports that are updated regularly. If the website is up to no good, you’ll probably find it on there.

If you suspect a website of malicious activity, you can also request an investigation from these platforms. They will publish scam reports on what they find, and you could help countless other users avoid the same fate.

2. Avoid unsolicited emails

Emails are usually the access points for most phishing scams. If you don’t open them and click the links, fraudsters will find it much harder to get your information. That’s why it’s a good idea to avoid unrecognized email accounts and only click links you can verify. 

Google now has an extra layer of protection in this regard; you get an orange notification message at the top of your window every time you interact with emails and documents from outside your organization. Be sure to pay attention to these messages.

3. Be wary of “giveaways” and freebies on social media

Instagram and Facebook are rife with fraudulent schemes. Whether scammers are promising to grow your follower base or send you ridiculous amounts of money, it’s helpful to keep one thing in mind – if it sounds too good to be true, it most likely is.

4. Be aware of fake traffic in your marketing funnels

As a business owner, there are so many things to watch out for. From fraudsters using fake credit cards to buy your products, for you to be hit with chargebacks; to targeting bots and fake profiles with your marketing campaigns.

Once a bot has seen your ad, or clicked on your banner, you can even end up retargeting the same fake profile if you’re using remarketing ads.

Protect your ad campaigns

All these measures help avoid many scam schemes. But ad and click fraud are constantly proliferating, and now more than ever, it’s essential to safeguard your PPC ad campaigns.

ClickCease’s click fraud protection software does precisely that by blocking fake impressions and clicks on your ads. Our software ensures malicious agents won’t see your ads, giving you every lead your money is worth.

Fraudsters and scammers are clever, but with the measures and the right protection software, you can stay one step ahead. 

Run a free traffic audit on your ads with our 7 day free trial.