As our online lives continue to expand, cybercriminals are also increasing their nefarious efforts. To fight back, here are five common cyber scams to be aware of, and tips on how to avoid them.
In the pre-Internet world, the most common method of theft – whether of information or material goods – was to steal with one’s own hands. That meant having to be physically present to commit the crime, having to navigate locked doors, cameras, trip lights and maybe even some guard dogs – and, if it was something particularly valuable, perhaps even “crack” (open) a safe. Even the “five-finger discount”, the old term used to describe shoplifting, at least required the thief to make the effort to head out to the mall or store to ply their nefarious trade.
Not anymore. These days, just as the Internet has made our lives easier in innumerable ways, so it has for thieves, or more appropriately, cybercriminals. In fact, today’s modern thief doesn’t even need to leave their couch.
“Be on the lookout for five suspects…”
Fortunately, there are ways to fight back, while helping to protect you, your family and your business against these increasingly clever and sly cyber operators.
According to our RBC Cybersecurity experts, here are five common scams to be on the lookout for, and how you can help defend against them:
1. Phishing/smishing
The scam: Phishing is a common online scam designed to trick victims into disclosing personal or financial information for the purpose of financial fraud or identity theft.
The approach: In a phishing scam, victims receive an unsolicited email that appears to be from a legitimate company. A typical phishing email will persuade you to click on a link that takes you to a fake website where you will be asked for personal information such as your credit card number, account number, passwords, date of birth, driver’s license number and/or other personal and sensitive information. While you may think you are giving your information to a valid company, you are providing it to a fraudster.
Important update: A newer version of phishing is “smishing,” where the fraudster tries to trick people into giving away sensitive information over text. Smishing attacks have become more common given the open and response rates to text messages. While only 20 per cent of emails are opened, and six per cent are replied to (as people have become more suspicious of email scams), those numbers rise to 90 per cent and 45 per cent for text/SMS messages.*
How to protect yourself:
- Take six seconds: If you receive an urgent message to update your account or take advantage of a time-limited offer, take six seconds to ask yourself if it seems suspicious. Be skeptical!
- Call the bank or retailer directly. Legitimate companies and financial institutions don’t request account updates or login information via email or text. It’s always a good idea to confirm any requests received this way by calling the organization’s official number (i.e., the one on their website, not the number contained in the message!).
- Avoid clicking any links in unsolicited messages. These could be traps to install malware or capture personal data.
2. Crypto scams
The scam: According to the U.S. Federal Trade Commission, since 2021 it is estimated that over $1 billion has been lost in crypto scams in North America alone.** The scam starts when a victim receives an unsolicited message over text, email or social media or when they click on a crypto trading ad online. In most cases, the investment opportunities offer higher than normal returns and come with a sense of urgency, so you don’t “miss out” on the opportunity.
The approach: The victim is often asked to communicate through another messaging platform, such as WhatsApp or SMS, and deceived into sending money for the investment. Often, the investor loses most — if not all — of their money.
How to protect yourself:
- If you receive a message from a trusted friend about investing in cryptocurrency, reach out to them through a different communication method to confirm it’s really them.
- Don’t click on links from suspicious emails, text or social media messages.
- Don’t feel pressured to invest quickly. Take some time to understand where your money is going.
3. Online purchase scams
The scam/the approach: Online scams are nothing new, so if anything, they are getting more sophisticated and clever than ever before. The most common type of these scams is “spoofing” a legitimate company’s look and website – in other words, scammers set up fake retailer websites that look like real online retail stores in these cases.
How to protect yourself:
- Buy from companies or individuals you know by reputation or from past experience.
- Make sure you’re still on a reputable website when you go to check out and haven’t been redirected to a new page.
- Be more cautious with sellers located far away or that don’t have many reviews.
- Use a credit card when shopping online since most come with fraud protection and other security guarantees.
- Regularly check your credit card statements for frequent or unknown charges.
4. Home improvement scams
The scam: In a home improvement scam, a fraudster acts as a contractor and offers low prices or a short time frame for renovations.
The approach: These fake contractors use high-pressure sales tactics and ask for money upfront, then deliver substandard or no work.
How to protect yourself:
- Do your research on any potential contractors and gather information about them before making any payments.
- Don’t agree to cash deals or give in to high-pressure sales tactics.
- Ask for references and check them out.
5. Advance fee loans
The scam: In an advance fee loan scam, fraudsters promise they’ll get you a loan, credit card or access to credit — even if you have a low credit score. But you must pay upfront before receiving any funds.
The approach: The most common approach is that the criminal “lender” contacts you over the phone or you respond to an online advertisement. These lenders target individuals with bad credit and who have limited options for a traditional loan. These scam companies sometimes use terminology such as “administration fee” or “credit protection” to disguise the illegal charges. Then, once the advance fee is paid, the lender usually disappears.
How to protect yourself:
- If you’re asked to pay an upfront fee before getting a loan, it’s a signal to hang up or walk away.
- Don’t make payments via e-transfer, wire transfer or cryptocurrency to an individual that you do not know — this is often a sign of fraudulent activity.
While there is a myriad of various cyber and other scams out there, many if not most can be detected by just taking a moment and considering what’s been offered and how. To learn more about cybercrime and how to fight back by protecting you, your family and your business, check out the RBC Cybersecurity site, and stay informed on the latest scams and how to avoid them.
Contact us today for more information on protecting your business.
* Tap Into The Marketing Power of SMS, Gartner Research.
**New FTC Data Show Consumers Reported Losing Nearly $8.8 Billion to Scams in 2022, U.S. Federal Trade Commission news release (February, 2023).
Article was originally posted in Portfolio Advisor and Counsellor Quarterly
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