10 Known Online Scams Targeting US Citizens You Should Avoid

Humans have been driven to commit scams since time immemorial. Perhaps it is necessity, or greed, or just natural proclivity. The reason matters little when the end goal is the same. What matters is that con artists and those trying to stop them have been engaged in an endless clash of wills that only seems to become more complicated with each new generation.

Before the digital era, authorities had become familiar with the complexities of virtually every scam and fraud known to humans. Systems had been set in place to tackle them and, for the most part, scams, while existing, had been relatively kept in check. But with the arrival of the internet era, con artists and fraudsters had experienced a new Renaissance. The internet had inadvertently accorded fraudsters a unique opportunity to invent dozens of new ways of cheating unassuming victims out of their money. Online shoppers, businesses, or just regular internet users are all potential targets to con artists.

Organizations responsible for keeping fraudsters at bay can only do so much to keep internet users safe. In many instances, it is up to the users themselves to understand the general risks and be able to detect and ward off potential threats.

In this article, we take a look at all things related to online scams. Among other things, we will examine common scams targeting US citizens, how they work, where to report them, and what you can do to minimize the risk of becoming the next online scam victim.

What is Internet Fraud?

Simply put, online fraud happens when scammers use internet services in a way that is prohibited, harmful, deceitful, and downright illegal to deceive unsuspecting targets.

It is tricky to describe what online fraud is considering it has many manifestations. From online job scams and various financial scams, tо social media scams, extortion schemes, and online shopping scams. Yes, the risks are many and are very real!

Millions of internet users in the US fall victim to online scams every year when they send cash or spill their personal information into malicious sites. Yet only a small percent of the victims report scams, despite a large percent of scam reports filed having high-resolution rates.

While some active internet users are no strangers to these internet scams, gullible users are more exposed to the scope of human duplicity. Online fraud has significantly evolved over the years and involves crafty tactics and methods that may not immediately suggest it’s a scam until it is too late.

It is necessary to stay informed and stay alert to suspicious internet activity, and report any dubious email, potentially fraudulent operators, or malicious websites that you come across.

Internet Harassment

Online scammers employ different tactics towards meeting their nefarious goals. These often involve subtle methods such as malicious software and ads, fake websites, email spam, employment offers, or fake antivirus software, to name but a few.

Usually, most online scams are profit-based or get-rich-quick schemes. The perpetrators only look for monetary gain, through unsavory, but restrained means. However, there are certain schemes that can be more downright hostile.

Cyberbullying is one such phenomenon. While online harassment and bullying can be driven solely by spite, con artists can use these tactics to blackmail or extort individuals or businesses for money. In some cases, hostile operators would send messages or emails threatening either harm or the exposure of sensitive information until their demands are met.

Sometimes blocking the harassment scammers may only delay their operation. They can return after having assumed another fake identity and created another fake account and continue to pester you.

Online Extortion Schemes

Extortion schemes work in a similar way as online harassment and cyberbullying. Malicious operators would use fake emails and Facebook accounts or hide their identities in other ways to further their criminal enterprise.

Extortionists may resort to the use of threats, blackmail, subterfuge, cyberbullying, and similar scare tactics toward getting their demands met. They would often claim to be in possession of sensitive information belonging to the victim and threaten to release the data unless they get what they ask.

In some cases, the extortionist could be lying about the type of data they’ve stolen from the victim. The fraudster may even provide unconvincing proof (such as a password) as evidence to claim they are in hold of damning videos or images. However, most of the time, it is highly unlikely the extortionist hacked into the victim’s computer and stole their information, particularly if that information is properly encrypted. The attacker hopes that their aggressive tactic would scare the victim into paying a ransom or a fee.

There is another form of online extortion dubbed ‘sextortion.’ Women, especially young girls who are active across dating apps, are statistically more likely to fall victim to sextortion schemes. But men can also be targeted. The extortionist could be someone the victim knows and with whom they’ve had a romantic correspondence or relationship, whether in-person or via modern-day dating apps.

There are also phishing extortion schemes, but we will look at them in more detail in a separate section.

How to Deal with Extortion and Blackmail Scammers

Many online extortion scammers would ask the payment be made via cryptocurrency (usually Bitcoin) to avoid leaving any digital footprints that digital investigators can track.

But note that caving to the extortionist’s demands is ill-advised. The scammer might promise to leave you after you pay up. But paying them only suggests that:

1. you have the money to pay
2. their extortion method works, which could further embolden them to keep on pressuring you until they bleed you dry or smarten up.

So, rule one, avoid paying the racketeer at all costs. If dozens of celebrities could survive mortifying porn videos being leaked, you could survive a few intimate images. That is, if, at all, you have any embarrassing files that could be in possession of the extortionist. But chances are the scammers do not actually have any of your information.

Another way to fend off extortionists is to not engage with them at all. When you notice a suspicious ad or an email from an unknown source, immediately delete it and report it as spam.

After you delete and report the hostile message or account, change your password and do so for every account you own.

If you’ve already started receiving threats on multiple occasions from the same source, and have started communicating with them, be sure to take screenshots of your correspondence. These could later prove useful to the investigators who look into the incident.

10 Online Scams Targeting US Citizens

Internet scams are as old as the internet itself. As internet usage has proliferated and the internet has grown more expansive and intricate, so have scams become more sophisticated and wide-ranging.

There are many internet scams that we will have no room to go over in detail. Just for reference, these include schemes like tech support and ransomware scams, many forms of email and social media scams, travel scams, fake romance solicitation, social engineering scams — it is hard to even keep track.

We’ve singled out what we believe are the 10 most common scams targeting internet users in the US. Note that some of these frauds are similar in that they can be the same category of fraud; say, two or three different types of financial fraud. However, they can also have certain characteristics that set them apart.

Online Financial Fraud

The vast majority of frauds are money-driven, essentially making them a form of financial fraud. One type is bank and credit card fraud. Credit card or transaction fraud can occur under different circumstances, such as when your credit card or bank account details are stolen or unwittingly shared with fake shopping websites.

Online payment scams, bank account, and credit card fraud are the most pervasive financial schemes. Online payment fraud is commonplace in the United States. Its impact extends to potentially anyone who makes an online purchase or transaction.

In some financial fraud cases, the fraudsters would flagrantly impersonate a government or bank official. They would request you share sensitive bank account details, such as passwords and credit card numbers, as part of a routine security check. The fraudsters may even warn you that you could face a massive fine or even go to jail unless you settle unpaid debt or taxes.

Employment fraud is another serious and quite common type of online financial fraud. Here, the supposed employer can send a targeted user, or users, emails offering secure employment in exchange for a fee or bank information, such as credit card number, to transfer money.

Online financial scams can also involve non-existing charity organizations or even fake brokers offering you a “once-in-a-lifetime” opportunity to invest in the stock market.

Online payment scams are a true pandemic within the US. Some research has found that by 2025, internet payment fraud will cost online vendors in excess of $200 billion.

COVID-19 Crisis Scams

There’s a saying that goes, “never let a good crisis go to waste.” While no crisis can be characterized as ‘good,’ like politicians, scammers use crises and the general feeling of fear and uncertainty they create among the public to their benefit. The global health and economic crisis caused by the Covid-19 pandemic is a prime example of that.

The same research that estimated online vendors are set to lose over $200 billion by 2025 to payment fraud notes the pandemic has played a key role in the rise in online fraud.

But the pandemic has not only been a base for common financial or email scams, but rather for scams directly related to Covid-19. This can not only lead to monetary losses but can also mortally undermine a potential Covid-19 patient’s health, alongside the health of their closest family members.

Common scams related to Covid-19 involve price gouging, providing untested black-market medicines, faux Covid charities and relief funds, or fake websites that supposedly sell protective Covid-19 merchandise.

Federal organizations also have to wrestle with Covid-19 scammers. Some people may use stolen or fake identities to apply for federal unemployment benefits. There are even some instances of large-scale, multi-million dollar Covid schemes whereby fraudsters would apply for non-returnable federal grants from the government intended for small businesses under the Paycheck Protection Program.

Since the outbreak of the pandemic in early 2020, tens of millions of dollars have been lost to online fraudsters globally.

Identity Theft Scam

Online identity theft scams can take on many shapes. It involves the stealing and criminal use of another person’s personal and/or bank information. Identity thieves can steal your information in different ways, such as hacking into your computer, phishing emails, and corporate data breaches.

The scammers use the criminally obtained information to pay for online services, apply for bank credits, or pay for medical treatment. Identity thieves may also create fake accounts impersonating an actual person in authority for nefarious reasons. They can also use your personal information to get a tax refund by filing a fake tax return form.

Identity theft is a serious problem for Americans. Identity thieves stole over $3 billion from millions of consumers in 2019 alone. According to a study by Javelin Strategy & Research, in 2020, identity theft scams accounted for $43 billion of the $56 billion of total financial losses to fraud that year.

Phishing Scams

Phishing scams work in a way similar to identity theft fraud. Online users receive an unexpected email, usually from what seems like an authoritative or reliable source (such as a bank or a shopping website) that redirects the user to malicious sites that request they enter personal information for verification purposes.

Phishing emails, like all online scams, use deception by saying, for instance, that you need to verify your data for security or that you are eligible for a certain bank credit or federal refund.

One of the main characteristics of phishing emails is they can seem genuine and may even use a logo or other identifying symbol of the person/business they impersonate. Sometimes malware-infested phishing emails only require you to click on them to automatically steal your data.

Extortion phishing emails are also a thing among online fraudsters. Unlike regular phishing email scams, which rely solely on deception, extortion phishing emails rely on the use of threats to achieve their criminal ends.

According to the FBI’s annual internet crimes report, phishing scams were among the top three scams targeting online users in 2020.

Natural Disaster Relief Scams

Fraudsters often exploit one of the most basic of human emotions: sympathy. In the event of a natural disaster – be it a hurricane, earthquake, or a winter storm (we’re thinking Texas here), or a global viral outbreak – online fraudsters get busy trying to leverage the crisis.

The targets of disaster fraud can be both the victims seeking assistance, and ordinary citizens trying to provide humanitarian support. Disaster scams can be in the form of phishing emails, crowdfunding initiatives, or fake phone calls, and often pretend to be associated with the government or some known disaster relief organization.

The United States Federal Emergency Management Agency (FEMA) provides Americans with useful guidance on how they can avoid falling victim to a disaster relief scam.

Advance Fee Scheme

Imagine logging in to your email account and seeing you’ve received a new message from a professed millionaire who claims they have $500,000 in frozen capital and need $10,000 to pay legal fees to unfreeze their assets. If you send money, you can have a huge chunk of their fortune as a reward. Tempting, right? That’s the point. This has come to be referred to as an advance fee scheme or a “Nigerian prince scam,” or a “Nigerian letter scam.”

A message like this reeks of a scam, but it is given only as an example. Other advance fee schemes might be more convincing and harder to detect. The mutual characteristic of advance fee schemes is they ask for a downpayment or an advance fee for which the payer is promised a significant return. Suffice it to say, the victim is either completely duped or does not get entirely what is promised to them.

Investment Fraud

Investment fraud occurs when potential investors are lured into making investments promising hefty returns with low risk. Ever seen Wolf of Wall Street? Yeah, something like that.

Scam investments can be made into real estate, currency, stocks, non-existent companies, or companies that are nothing like the auspicious start-ups the ostensible investment manager describes them. The fact that investment fraud can be committed by expert investment advisers who know the ins and outs of the trade makes them extremely difficult to detect for the untrained eye.

Investment fraud can involve anything from advance-fee scams, pyramid schemes, to Ponzi schemes. The latter two share similarities in that they involve a middle man who collects “investments” from new targets and uses that money to pay earlier investors, creating an illusion of profit. It’s what we call robbing Peter to pay Paul.

Online Gambling Scams

Online gambling fraud belongs to a separate category considering it incorporates a range of different types of scams. Still, there are only a handful of scams that plague the iGaming community. You can learn more about legal online casino gambling in the US through sites such as Scams.info.

Multiple account fraud – this is a common fraud scheme plaguing many internet gambling operators. It is when a user, against the gambling operator’s rules, creates dozens, even hundreds of fake accounts under different names and fake information. Using the fake accounts, the scammer can engage in bonus abuse, chip dumping (in the case of poker), or other prohibited actions.

Bonus abuse – multiple account fraud is often used for bonus abuse. Part of what makes online gambling sites attractive is their new and existing player bonuses. These include welcome bonuses, deposit bonuses, free spins, no deposit offers, and so on. Some individuals would create multiple accounts in an attempt to claim a bonus for each fake account they own.

Chargeback fraud – unlike other gambling fraud, chargeback, or friendly fraud, occurs when an actual online casino user tells their bank or card providers that someone is, or has been using their credit card to gamble in their stead. The bank or credit card provider would then refund the user to the detriment of the casino.

Sweepstakes scams – lottery and sweepstakes scams are a type of prize scams whereby users receive unsolicited messages or emails telling them they’ve won a monetary prize or a gift. But there’s a catch. You must provide your personal, account, or bank information or pay a certain fee to claim your prize. The thing is, if you actually did win a prize out of the blue, which pretty much never happens, you are not obligated to pay any fee or provide any personal account details to get your prize.

Noteworthy Online Scam Stats

Internet crimes are virtually as old as the internet itself but have dramatically increased over the past decade. The statistics paint a clear picture of just how rampant cybercrimes and online scams are in the US.

The FBI’s Internet Crime Complaint Center noted a 17% jump in online scams in 2018 compared to the preceding year. The trend would only continue to rise over the next three years, becoming particularly marked during the 2020/21 pandemic.

The department also reported a considerable increase in reports of online crimes in 2020 compared to 2019. The bureau’s annual Internet Crime Report for 2020 states 791,790 instances of potential cybercrimes were reported in 2020, or 300,000 more compared to 2019. Around $4.2 billion were lost to online crimes in that year alone.

This rise of online extortion and phishing ploys, alongside online shopping crimes, was especially pronounced, followed by romance and investment scams. Nearly 29,000 of all reported crimes were Covid-19-related.

Meanwhile, the Federal Trade Commission (FTC) received more than 2 million fraud complaints in 2020. Imposter fraud and online shopping scams accounted for the majority of complaints and cost internet users and shoppers more than $3.3 billion, nearly twice the amount the preceding year.

There is also a pandemic of sorts stemming from identity fraud. A report on identity fraud crimes by Javelin Strategy & Research released in 2021 states identity theft crimes were responsible for $43 billion of the $56 billion total financial losses to fraud in 2020.

Consumer tracking and analytics firm TransUnion, in the first four months in 2021, the US saw a 25% increase in suspected online scams compared to the same time in 2020.

The Importance of Understanding Internet Scams

If you don’t know how internet scams work, that’s both good and bad news. The good news is that only crafty fraudsters would know the intricacies of complex schemes. So, in the event of big corporate scams, high-ranking officials and managers got plausible deniability working for them.

The bad news is, staying ignorant of the threats posed to your company or you as an individual makes you more vulnerable to falling victim to a bank account fraud or some other online scam.

There are different ways you can deal with these situations. It all depends on the type of scam. If, for instance, you are dealing with spam, malicious software, or fake shopping websites, you can simply block the website and messages or report them to the relevant online authority or official government organization that deals with these matters.

In the Case of Online Blackmail Scams

If you are engaged in a person-to-person exchange with a suspected scammer, the experience can be quite different. Like fraudulent emails, software, and ransomware, human fraudsters, if allowed, can be quite persistent in their endeavor to trick someone out of their hard-earned money. They will keep on sending fake proposals and spam and try to convince the targeted individual, or coerce them using threats and other scare tactics until they ultimately pay up.

The victims are typically people who have no knowledge or experience managing such circumstances and tend to panic. But gaining a basic knowledge of the scammer’s psychology can save a lot of headaches.

Crafty con artists, online racketeers, and extortionists would go to great lengths to convince you that they are holding all the cards. But the fact is they are only partially in control. They generally prey and thrive on acquiescent, unassertive, uninitiated, or individuals with the proverbial skeletons in their closets.

What extortion fraudsters often do is they send threatening messages or emails across dozens, even hundreds of emails addresses. This usually occurs when there’s been a big corporate data breach where some personal information about employees has been leaked and is circulated across web channels. The targets can also be random internet users whose usernames and passwords the scammers have somehow obtained.

Oftentimes, the instigators would claim that they have infected your device with spyware or other malicious software to amplify the level of intimidation.

Identifying Internet Fraud

Identifying and avoiding scams can be pretty straightforward or pretty darn hard if the fraudsters invest themselves in developing an elaborate and convincing scheme.

In many cases, online fraud is not detected until after it is committed. This typically involves identity theft fraud where the victim is not aware their information has been stolen and used until too late. For that reason, make sure you regularly check your credit report and history and bank statements for any suspicious activity, credit application denials, bills for purchases you didn’t make, and other telltale signs of fraud.

Each scam has its marked characteristics. For instance, phishing emails, advance-fee scams, and sweepstakes fraud are almost always in the form of unsolicited emails and offers like the promotion of fake tickets in an attempt to steal user information.

Blackmail fraudsters are likely to not be as subtle as most other scammers. They will use accusations and threats, saying they know you’ve been visiting adult sites or claim they have stolen damning videos and pictures in an effort to strong-arm you into paying – which you should avoid at all costs. But chances are their threat is only a flagrant lie intended to coerce the target to pay up.

Disaster relief and charity scams can be harder to detect. These schemes involve the use of names that mimic an actual relief organization or federal agency to seem more authentic. But there’s a simple way to tell fake from authentic charities: actual relief groups would never solicit financial help for disaster victims or ask for personal or bank information.

Tips For Protecting Yourself From Internet Fraud

If you want to ward off internet scams you can start by reading tips or reviews on cybercrime prevention and ways to protect yourself online. We will now offer our own list of suggestions about what steps to take to secure yourself from internet fraud schemes.

First, pay attention to certain aspects of the website you use. Use a website only after you’ve safely connected there, and steer clear of sites inundated with pop-up ads, which could contain potentially malicious malware.

To avoid being dragged into an online scheme, make sure you do everything in your power to secure your online presence. This means using anti-tracking tools, synchronizing your devices and accounts, using strong passwords, and changing them frequently. Also, turn on your firewall and install a reliable antivirus program and spyware technology that will alert you to any data breach, cyber intrusion, and ward off malicious programs.

Only log in and share information with official websites of organizations and companies that you can trust. Also, use secure websites that display a small padlock icon at the very beginning of the address. All secure business and gov websites use HTTPS protocols to ensure a safe connection between their website and their users.

In the case of hostile online extortionists and blackmail scammers, the aim is to be able to withstand their threats without paying them. If you feel obligated to pay up due to the damning nature of the information they may or may not possess, avoid doing so via Bitcoin. Scammers would often request Bitcoin or other crypto transactions to remain anonymous and avoid being tracked by authorities.

It goes without saying, you should avoid opening any email, potential reward you’ve won, or romantic offer that comes out of the blue.

Reporting Internet Scams

If it is just a scam involving relatively harmless phishing emails, advance-fee, or romance schemes, you can report it to the relevant internet service provider such as Yahoo, Google, Instagram, Twitter, etc.

If you are dealing with aggressive extortionists, elder fraud, investment scams, disaster relief, or other similar internet ploys, you can even submit a complaint to a federal agency that deals with such matters. These include the FBI’s Internet Crime Complaint Center, the FTC’s Consumer Sentinel Network, or even the Internal Revenue Service if you believe you’re a victim of a tax scam.

Moreover, depending on the suspected scam, you can reach out to the US Postal Inspection Service or the Justice Department’s National Center for Disaster Fraud and National Unemployment Insurance Fraud Task Force when Covid-19 scams are at issue.

Internet Frauds in the US FAQ