With online scammers on the prowl, it is better to be safe than sorry. Here are some of the most common scams you should know about which have been doing the rounds online in Singapore.
Be smart about your money and don’t fall prey to one of these online scams
1. PayPal scam
What is the PayPal scam?
An ingenious scheme and at the same time, quite basic. In the PayPal scam, victims are made to believe that they have been paid through PayPal for the items they posted for sale online, and are convinced to ship them out.
How does it work?
The victim is contacted by the scammer, posing as an interested buyer for the items posted for sale online. Once the deal is finalised, the scammers send fake emails from PayPal or from reliable banks, convincing the victims that the payment has been made.
After this, the victim is asked to ship the article and produce proof of shipping before the payment is released to them. In a creative variation, victims part with money in the form of ‘administrative payments’ for the ‘activation of PayPal accounts’ so that the payment for a deal may be received. Of course, no such payment comes your way!
Stay vigilant: In case you are not convinced about the transaction and the person at the other end, always insist on payment in person. To know if the email from PayPal is authentic, here are some tips from them.
2. Ponzi scheme scam
What is a Ponzi Scheme scam?
A Ponzi scheme is a scheme where property companies offer investments to fund developments with a promise of extremely high return on investment. In the Macro Realty Developments Ponzi scam, hundreds of investors were left high and dry after the scheme ran its course and collapsed.
How does it work?
Macro Realty, in its initial promotions, claimed ownership of land and assets and also told investors that they had other sources of revenue. This helped raise millions of dollars that they claimed to use for development of the property but were, in fact, using it as interest payments for the initial wave of investors and other expenses of the company.
High interest payouts excited investors who unknowingly led more people into the scam. Once enough money was collected, the Ponzi scheme collapsed and had to be wound up.
Stay vigilant: Do not make the mistake of hiding investments from family and friends. Research or ask for opinions from financial advisors too. It is your hard-earned money, so no harm checking and verifying, thousand times over. Also, remember if the deal promises too good to be true, then it possibly is.
3. Internet Love scams
What are Internet Love scams?
In a typical Internet Love scam, scammers develop an online relationship with the victim, and then focus on their weakness – be it an offer of sex, of friendship, or a lucrative business investment offer that requires immense trust. Most of the scenarios end up with the victim transferring money as a payment for a non-existent transaction, as an investment, or as financial help for a personal problem.
How do they work?
Internet Love scams work on the premise that people looking for online relationships are usually lonely and vulnerable, thus easier to win over and trick. Once the victim is deep enough into the relationship, the requests for financial help or financial investment start.
Very often, the scam involves a transfer of money in the form of gift cards since they are much harder to trace. If the scam has to do with something illegal or prostitution, the victim is usually embarrassed to report it to the police and ends up getting blackmailed into repeated transactions.
Stay vigilant: Looking for love online is okay, but believing everything you see or find online isn’t. Insist on meeting face-to-face (in a public place, if possible) and do not exchange money till you completely trust the person.
The rules online are pretty much similar offline as well. Anyone who loves you for your money is never worth it. Whatever be the circumstances.
4. Online shopping scam
What are online shopping scams?
Online shopping scams are online transactions where the victim gets tricked because of shopping through an unverified website, or through auction sites that are taken advantage of by scammers. In other versions, getting sucked into an online scam is as simple as clicking on an advertisement for free gifts and lotteries; or replying to emails that pretend to take surveys or announce some prize that you have won.
How do they work?
Despite all the security involved and awareness generated about online shopping scams, this is still a regular feature. It works because an average online shopper will eventually fall for a scam thanks to a history of safe transactions. The second reason is greed – falling for offers of free gifts, vacations, or gadgets. One offer leads to the next, followed by requests for larger payments at each step.
Once you have dropped enough money to be adequately invested, the scammers finally ask for a hefty sum.
Stay vigilant: Shop from verified sites, that are popularly known. For ones you haven’t heard about, search online for reviews about them and their products. And if you are still feeling adventurous and want to give it a shot, make a very tiny initial purchase. This way incase things don’t turn out quite right, you would not have lost much.
If you are dealing with used items, then verify the person’s authenticity on social accounts to see if he/she actually exists. Most often, social accounts of fraudsters have either been recently created or have no updates, except for a fake profile picture.
5. Email impersonation scam
What is an email impersonation scam?
An email impersonation scam or the spoofed email scam is when scammers impersonate your regular online supplier with a fake email address and direct your payments to a false bank account.
How does it work?
The address of the fake email sent to you by the impersonator is so close to the original email address that it is easy to mistake. In the email, you may be requested to make your payments to a different bank account instead of the regular one.
Reasons given for this change are as mundane as the account being under audit or its having been suspended. Sometimes, it is as easy as ‘please note our new bank details’! Scammers rely on the hope that you will not check with your supplier over the phone about the new instructions.
Stay vigilant: Always check with your bank, if you have been asked for bank details on email. Cyber security is a huge risk now and you should not be naïve and share your bank information freely.
What should you do now?
If you’re reading this and thinking that you’ll never fall for such scams, that’s good. But many Singaporeans are still falling prey to such scams, despite posters in many HDB lift lobbies. Share this article with your parents or relatives that might not be as savvy to keep them protected.
For more posts on how you can stay safe and protect your money, read these: