The internet is certainly full of opportunities with millions of people earning part or all of their income from it. However, for every success story there is usually a scam that fools even more people and takes their money. Understanding what is a scam and what is a legitimate offer is crucial to knowing whether to proceed when you see a new advertisement on the web.
What follows are the five most popular internet scams. Even though awareness of these scams has grown tremendously over the past decade, they still rip people out of millions of dollars annually.
1) The Wealthy Nigerian Family
Easily one of the oldest and most recognized scams, the “Wealthy Nigerian Family” scam is perhaps the king of all internet rip-offs as it has fooled so many people over the years and is very widely known, yet is still being used today.
The scam is a very simple one. You get an email from a member of a “wealthy Nigerian family” who needs to get a large amount of money out of their country immediately. They transfer the money into your bank account and all you need to do is pay a few processing fees to start the process. Naturally, you’ll never see any of the money while the “fees” go to line the scammer’s pocket.
2) The Lottery Swindle
This is another “oldie, but a goodie” in that lottery swindles of this nature date back to well before the internet. Basically, you receive an email that congratulates you on winning a huge amount of money, often several million dollars, from an overseas lottery you’ve probably never heard of before. All you need to do is pay the processing fees, which usually consist of several thousands dollars to claim the money.
First, you cannot win a lottery that you did not enter and second, any “processing” fees from a legitimate lottery are deducted from your winnings, so you pay nothing. Yet people still get swindled from this form of scam every year.
3) The Up-Front Credit Card Fee
Credit card applications come in the snail mail and email with regularity. But this one is generally loaded with eye-catching promises such as being able to access large amounts of money on pre-approved loans. However, there is an up-front fee for getting the credit card.
No legitimate bank or lending institution offers an up-front fee. Plus, there is no such thing as a pre-approved loan, especially one where they have not examined your credit. This is a very popular scam that takes in thousands of people every year who pay the up-front fee and never see anything else.
4) “Phishing” for Money
This is arguably the most popular internet scam of them all, although the effectiveness is not quite as high as the top three. Basically, you get a very legitimate looking email from a credit card company that tries to lure you into revealing your password or other pertinent information so they can rob your credit card account blind. Remember than no legitimate company would ever send such an email, so beware.
5) Disaster Relief
This ugly internet scam is designed to take advantage of your good nature. Every time a major disaster strikes, such as Hurricane Katrina for example, an email is sent out asking for online donations to charities that you’ve probably never heard of. That’s because they don’t exist. Resist donating any money until you have completely checked out the organization yourself.