From Bernie Madoff to Nigerian sob stories on eBay, it is clear that wherever opportunity sticks its neck out, there will almost always be takers.
Internet proliferation reaching record numbers in the last decade has opened the doors for a new face of investment scams to emerge. However perverse as it may sound, it has actually made scammers’ lives easier as all they need are a computer and domestic Internet connection. Another rarely admitted point is that these scammers do show some form of ingenuity, albeit channelled into the wrong area.
In order to understand how these scams actually work, it is important to first establish the driving force behind the actions of a scammer. According to finra.org, the one thing in common is the psychology at play behind these scams. Their orchestrators make sure that the story behind their pitch is always seemingly good and true. This is how they capture their prey; after that, the persuasion gets easier.
This article covers three common types of scams:
The Infamous Pyramid Scheme
Almost everyone has heard of the term Pyramid Scheme. In short, Investopedia summarises it as a fraudulent investment scheme based on a hierarchical setup.
The scheme works on the proviso that one has to recruit more and more people under one to generate income. It is also illegal in most developed countries as it does not deal with any real or physical product despite its claims.
Scamwatch.com.au defines this as a type of fraud that involves using someone else’s identity to steal money or gain other benefits. A good example this is in hacking where scammers are able to access your personal information, change your passwords, and restrict access to your system. They are also able to access items stored on your devices such as credit card or bank details that they can use for fraudulent purposes.
The Dating Website Scam
Appealing to matters of the heart can bring about actions that are not rational. Recent times have seen an increase in dating scams on websites where one meets someone of interest and decides that they would like to be more than friends. Although this should in no way cause anyone to lose faith in the industry as a tool to find love, it has come to attention that scams in this medium are rife. One party often asks the other to send money over for some heart breaking reason, and that will be the last of it – no money, love or any contact after funds have been received.
Regardless of the type of scam in question, there are always ways to reduce one’s risk. In the online world, one should regularly check for viruses as well as choose passwords that are less easily guessed by hackers. Generally, one should also always be aware that such threats do exist, and consult a trusted professional whenever in doubt.