Internet Scams: How to Identify, Avoid, and Report Online Fraud

Most Americans spend a lot of time online. The internet is where we get basic information, do much of our professional work, connect with friends, meet new people, and shop. The frequency with which we use the internet can create a false sense of security. After all, if we’re online all day, every day, and nothing bad has happened yet…is there really anything to worry about? Unfortunately, yes! There are a lot of scams out there, and some people avoid them because of pure luck. What happens when your luck runs out? You could end up losing money, your reputation, and your sense of security. It doesn’t have to come down to luck. If you know and understand how internet scams work, you can be far more effective at avoiding them. Knowing that certain types of scams exist is important, but knowing how those scams work is even better! Internet fraud scams can range from simple to incredibly complex. Almost everyone falls into a group of people who are the ideal target for a variety of fraud scams. For example, senior citizens are more likely to be targeted by “ grandparent scams, ” in which a scammer impersonates a grandchild and requests money for an emergency situation. Adults of all ages are targeted by fake toll scams, and teenagers tend to be defrauded by online shopping scams. Women and men are both targeted by romance scams . Men are more likely to fall victim to these fakers, whereas women tend to lose more money. When it comes to internet fraud, it’s important to understand that scammers are working hard—and spending a lot of money—to develop ways to trick unsuspecting victims. There are two main ways to fight internet fraud: You can work on the second option while supporting the first! For something to be considered fraud, it must meet these three conditions: There may not be a single legal definition of “internet fraud,” but it is generally understood to be any type of cybercrime that uses the internet to perpetrate fraudulent activity. There is no such thing as accidental fraud, because all fraud requires the intent to deceive. This means that if someone posts something on the internet that isn’t true, but they thought they were sharing something factual, that person hasn’t committed fraud. However, if someone knowingly posts untrue information on the internet with the intent to trick someone else into handing over their money or private information, then you are looking at internet fraud. Internet fraud scams target both individuals and businesses/organizations. Examples include: Keep reading to learn more about many of these schemes and how they work. Although the specifics of the con may vary from one scam to the next, you’ll often see similar tactics at work. Think of these as the bones of any scam. Bodies come in all shapes and sizes, but inside of everyone, you’ll find bones, muscles, organs, and more. Internet fraud is similar. The appearance may change, but underneath, the same mechanisms are at work. Social Engineering and Impersonation Manipulators pose as trusted entities to trick victims into revealing confidential information or taking actions that benefit the scammer. Malware Malicious software infiltrates devices without the user’s knowledge to steal information, extort money, or damage systems. Phishing Deceptive messages appearing to be from trusted sources lure recipients into clicking malicious links that steal credentials or install malware. Fake Websites Convincing replicas of legitimate websites with similar URLs harvest credentials, sell counterfeit goods, or collect payments for products that never arrive. Credential Harvesting Attackers systematically collect usernames, passwords, and authentication details through various methods to gain unauthorized access to accounts. Pretexting Scammers create elaborate false scenarios and backstories to establish trust and extract information from unsuspecting victims. Watering Hole Attacks Instead of directly targeting victims, attackers compromise legitimate websites frequently visited by their targets to deliver malware. Vishing (Voice Phishing) Phone-based scams use spoofed caller IDs and social engineering to trick victims into revealing sensitive information or making payments. Smishing (SMS Phishing) Text messages containing malicious links exploit the high open rates and limited security features of mobile devices to deploy phishing attacks. AI-Enhanced Impersonation Advanced artificial intelligence creates deepfakes, cloned voices, and personalized messages that bypass traditional red flags of fraudulent communication. According to the FTC , 2024 was a big year for scammers. Those statistics tell us that the problem is significant. What they don’t tell us is how much emotional and psychological damage comes with each of these losses. The financial cost of falling victim to internet fraud is serious enough, but it is often accompanied by shame, anger, embarrassment, and other emotional losses. So what do these scams look like? That’s the question, isn’t it? The most popular scams work because they catch people off guard. Cybercriminals are most successful when they can manipulate their victims into feeling a false sense of security. Even the most skeptical people tend to let their guard down when they think they’re safe and secure. Let’s take a look at 11 types of scams you’re most likely to encounter online. Phishing attacks use convincing fake emails that mimic legitimate organizations or senders. This trickery allows scammers to craft messages with urgent language about things like account security, package deliveries, or payment issues. People fall for these phishing emails because they don’t realize the sender is illegitimate, or they feel pressured to respond before they have a chance to investigate. Mass phishing casts a wide net using generic messages, while spear phishing researches specific targets first. Signs of a phishing attempt include: Some scams target businesses, from small businesses to large enterprises. Invoice fraud works by infiltrating or spoofing the email accounts of executives or vendors. Once established, scammers will: These scams generate fear through fake virus alerts and tech support notifications that appear suddenly on users’ personal screens. The deception works through: Government impersonators leverage authority and fear of legal consequences to get people to hand over large amounts of money. They operate by creating fake government accounts, often spoofing official phone numbers on caller ID systems. By using official-sounding titles and agency names, they convince their victims that they are under investigation or at risk of serious consequences. Often, these tax and IRS scammers lie about serious consequences, such as a pending arrest warrant or suspended benefits, to create that hallmark of scams: a sense of urgency. They are especially good at exploiting confusion about government processes to take advantage of their victims. The IRS will never contact you over the phone or via email to discuss your taxes. Fake shopping sites capitalize on people’s desire for deals and hard-to-find products. These operations clone legitimate websites with small differences in the URL. For example, if a major retailer’s URL is “www.majorretailer.com,” a scammer might create “www.majorretaileronline.com.” These online shopping scams involve: If you or someone you know has ever had their Facebook account cloned, then you know what this looks like! Social media impersonation scams leverage the trust people have in existing relationships to defraud their victims. They may also mimic celebrity accounts and public figures, taking advantage of people’s admiration and sense of being starstruck. In these cases, fraudsters: Gift card scams rely on the cards’ cash-like properties. These scams direct victims to specific stores to purchase gift cards. Legitimate businesses will never ask you to pay for products or services in the form of gift cards! If you are asked to buy gift cards to pay for anything, you should stop and investigate further. Often, these scammers operate from outside of the US. The scammers get users to transfer the balances to other accounts and may use emotional manipulation to prevent people from stopping to verify the transaction’s legitimacy. With the rise in online shopping in the past decade, people are accustomed to receiving a lot of packages. Delivery scams exploit our anticipation of packages by sending texts or emails notifying people of “urgent” delivery problems. To get your package, the scammer will say that you need to click a link, hand over personal information, or install unfamiliar software. These scams are essentially using a phishing strategy, but they take advantage of the fact that people want to get their packages and may not always remember what they ordered. These scams may also include requesting a delivery fee to be paid for delivery. The scammers will then steal the credit card information. Job seekers may be especially vulnerable to scams that target their need for a new job. These scammers advertise fake jobs on legitimate job boards. Sometimes, the jobs seem too good to be true, but they may also post very realistic ads. The scammer will conduct the interview entirely via text, email, or a mobile app. Upon “hiring” the victim, the scammer will scam them by: Money mules are people who agree to move illegally acquired money from one place to another, often over national or international borders. Scammers will target people who are looking for work or extra money online and ask them for a “favor” of transferring money. They tell the target that in exchange for this favor, they will get to keep some of the money. Often, these individuals have no idea that they are transferring illegally obtained money. Charity scams are some of the most deplorable scams,  because they capitalize on people’s emotions following disasters or during difficult times. These scammers create websites that mimic legitimate charities. Using emotional appeals and stolen images, they set up fake donation processing systems that really just take people’s money. Charity scammers also use high-pressure tactics to prevent people from looking closely at their copycat or fake organization. People may donate to these fake charities and never even know that they’ve been scammed unless: Because people are dependent upon essential services like utilities and telecommunication, fraudsters will create panic in their victims. They contact their targets and pretend to be from service providers, warning of potential outages. For example, they might call before an extreme weather event and explain that the household is at risk of a power outage, but they can guarantee ongoing access to the power grid with their premium subscription services. These scammers may also: Scammers continuously refine their tactics, which presents a challenge to anyone trying to avoid getting tricked. However, there are certain warning signs that remain constant across most internet fraud attempts. The more familiar you are with these red flags, the more effectively you can detect scams. The important thing is to develop a strong instinct for scam detection. A healthy sense of skepticism, combined with knowledge of how scams work, will take you far. Scammers will do everything they can to shut down your natural skepticism. The people who design these schemes are experts in manipulating the psychological triggers that cause us to act quickly, before we have a chance to realize we’re being tricked. These manipulation tactics include the artificial urgency we’ve discussed throughout this guide, as well as fear-based threats (“You will be arrested if you don’t take action”) and emotional manipulation. Additionally, some hallmarks of scams include: Scammers can use several approaches to identify potential victims. Sometimes, they cast a huge net, sending out phishing emails to hundreds of thousands of people and waiting to see who falls for it. ( AI helps them do this !) However, they can also target individuals who are more likely to surrender their personal data or their money. Careful targeting may include: When determining if a communication seems suspicious, trust your instincts. Legitimate organizations maintain consistent communication patterns and never pressure you for immediate action or sensitive information. Reporting scams isn’t just about trying to recover your own losses—it helps authorities identify patterns, shut down fraudulent operations, and prevent others from becoming victims. If you were the target or victim of a scam, we recommend reporting the incident to the authorities. The U.S. government maintains several channels dedicated to fighting internet fraud: For platform-specific scams: Contact the platform’s help account to find out the best way to report attempted or successful scams. You may be able to click “report” on the message, too. The more information you can give when reporting a scam, the better! Some platforms will only allow you to submit a notification or select from a drop-down list of options. If you are notifying the authorities of a scam, however, you should include as much information as you can. The most effective reports include: Why should you report these scams? Well, your report contributes to a larger effort that helps authorities catch online predators. It also helps cybersecurity experts identify emerging patterns before they spread widely through the population. Reporting the scam provides important data to the authorities, which can be used to create consumer alerts and awareness campaigns. People can’t study and prevent these scams if they don’t know that they are happening! Reporting scams also: Even if your individual case isn’t immediately solved, your report becomes part of a database that helps connect related incidents and build stronger cases. As scammers adapt their tactics, protecting yourself requires ongoing vigilance and education about the latest threats. We want you to be safe! These are some of the best WhatIsMyIPAddress.com-approved tools and strategies to protect yourself before you become a target. Having good digital safety habits will offer you a lot of protection. You can take steps now , before you’re ever targeted by a scammer, to make yourself a less appealing target. Some safety measures we recommend are: The best way to secure your devices and accounts is to create multiple layers of protection. Do that by: You may not be the ideal target for scammers, but the people in your life may be! Vulnerable populations may need extra protection from scams: We encourage you to share the resources in this guide with your community! That includes sharing: Remember that protecting yourself from scams isn’t about paranoia or avoiding all online communication. Rather, it’s about developing healthy skepticism and verification habits that become second nature. By staying informed and sharing knowledge with others, you contribute to making the internet safer for everyone.