Common Financial Scams Online

Oct 1, 2019

Common Financial Scams OnlineFinancial scams have become more and more common as technology has advanced. Between online marketplaces like eBay and the number of ways we can communicate with vendors (email, text, Facebook, phone), today’s technology has made it easy to offer our money – and financial information – to just about anyone. Online shopping has become so second nature that sites even have auto-fill features that store and pull your stored financial information, leaving you vulnerable to hackers. These advances in technology have made life much more convenient, but we all have become more vulnerable to more types of financial scams. Below, we’ll help you recognize and report the most common financial scams so that you can protect yourself and your money.

Common Email Scams

Fake Sender Email Address

This scam is exactly as it sounds; a scammer will email you from an email address that is masquerading as a legitimate or “friendly name” such as “PayPal Services.” When you hover your cursor over the sender name, though, most times you’ll notice that it’s not @paypal.com, it’s actually @gmail.com. Be sure to always hover over the sender’s name to confirm that the email is coming from a legitimate sender.

Fake Email Prompts

There are many different phishing prompts that scammers use in hopes of gaining access to your personal and financial information, including credit card numbers and personal identification. Here are a few:

“Your account is about to be suspended.”

This type of scam claims that you must enter your password into a spoofed webpage that looks almost identical to the authentic site. To be safe, always manually type out the website’s full URL (do not copy the URL from the email) into your search engine and login to the legitimate site. From there, you can enter your login information and see if your account is actually going to be suspended or not. Most sites will never ask you to input this information anywhere except for the login page.

“You’ve received a PayPal payment.”

This prompt claims that you have received a payment for merchandise that you have not shipped yet. The email typically asks you to log into your account on a spoofed site to confirm this before you ship any merchandise, so you end up shipping merchandise without ever receiving payment and giving up your sensitive login information. You should follow the advice above and verify the legitimacy of this claim by logging into PayPal’s official site before sending anything to anyone. You can report any suspected email to spoof@paypal.com.

“You’ve been paid too much.”

In this situation, a scammer tries to convince you that you’ve been paid more than you were owed and requests that when you ship the product, you also ship the difference in payment, so they get the product and money that was never overpaid in the first place. Always keep receipts or other forms of documentation of what you pay and are paid so that you can avoid this.

Advance Fee Fraud Emails

This involves a scammer offering you free money but requiring that you send them a small amount upfront. It’s important that you never send money for taxes or legal documents unless the source is credible and legitimate. This type of scam can happen through email, but it can also take place in direct messages on social media sites like Facebook.

Donation Requests from Fake Charities

If a charity reaches out to you via email or social media requesting a donation, verify the charity’s legitimacy to make sure that your money is going to a real cause before sending anything.

Common eBay Scams to Avoid as a Buyer

The Simple Scam

This scam is as simple as its name; you send payment for a posted product, but you never receive anything in the mail and the seller does not engage in any communication. You should always ere on the side of caution and avoid shopping in categories that aren’t covered by eBay’s Money Back Guarantee, so you can be refunded for this fraudulent sale.

Seller Ships with an Incorrect Name

In this type of scam, the seller properly ships the package to your address, but uses the wrong name, making you think you received someone else’s package so that you return it. This marks your package as “Refused” or “Returned,” which voids eBay’s Money Back Guarantee, so the seller keeps the money. This also counts as a resolved dispute, so you can’t leave feedback on eBay’s site warning other buyers. To avoid this, open all packages when: you’re expecting a package, the address matches yours, and the tracking says it was delivered.

Common eBay Scams to Avoid as a Seller

Buyer Offers To Overpay

If a buyer offers to overpay for an item, he or she will typically send an empty cashier’s check or a bogus personal check, neither of which will clear. Unfortunately, by the time you realize this, it’ll be too late because you’ve already shipped the item. To be safe, wait two weeks to ship any items; by then, the check will either be marked as “bounced” or you’ll have the money in your bank account.

Buyer Wants To Settle Outside Of eBay

If your listing is an auction, you may get a buyer who offers to immediately pay an amount of money with one condition: you have to close the listing and settle outside of eBay. In this scenario, they will then complain to eBay about some aspect of the sale, but eBay won’t help you unless all communications and transactions went through eBay’s platform. If the buyer refuses to communicate or is unwilling purchase the item only through eBay, wait for a buyer who will.

Buyer Claims “Item Not Received” To PayPal

This scam involves a buyer claiming that they did not receive an item they purchased (regardless of whether or not they did receive it) in order to get a refund for the transaction. While PayPal has a free Seller Protection program to protect sellers from losing money, it does not protect sellers against all claims and chargebacks. In order to be eligible for protection, the seller must be able to provide online tracking information, but, if the item is over $750, the seller must also provide signature confirmation of delivery.

Buyer Issues a Chargeback

With this scam, the buyer reverses a transaction using a chargeback, which is basically a forced refund where the bank, credit union, or PayPal cancels the transaction, taking the money back from you and returning it to the buyer. There’s not much that you can do in regards to this, so be vigilant when determining who you sell your items to.

Common Facebook Scams

Inheritance Scams

In this scenario, the scammer claims to be a lawyer or other legal authority and pretends to represent the estate of a deceased person. The scammer will direct message you and claim that you’re entitled to the inheritance if you provide personal information. Do not respond to these messages unless you can identify this as legitimate.

Loan Scams

Similar to inheritance scams, loan scammers offer or claim to know someone offering instant loans at a low interest rate for a small advance fee. Again, do not send money for any fees without confirming that this is legitimate.

Common Amazon Scams

When shopping on Amazon, it’s important to consider the seller you are purchasing your items from. Scammers on Amazon may try to steal your money or information by directing you off of Amazon to make a purchase through gift cards. Again, only communicate directly on the site so that if Amazon has to intervene, they have access to all records and receipts and can protect you. Keep in mind that any legitimate seller will never direct you off the website and no legitimate transaction will ever require payment via purchasing a gift card.

Avoiding scammers while shopping online can be tricky, but it’s crucial that you thoroughly vet potential sellers or buyers. You wouldn’t hand your credit card to someone on the street without verifying their legitimacy, so don’t do it online!

Erin Ellis

Erin Ellis
Accredited Financial Counselor ®
Philadelphia Federal Credit Union

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