How to Avoid the Worst Online Financial Scams

Online Financial Scams

Scammers are quick to sense an opportunity to take away your hard-earned money. A financial scam could result in huge losses for you and could set you back when it comes to your savings, investments and side hustles.

When you’re financially savvy, you want to keep hold of as much of your money as you can. Online scammers are getting much more sophisticated, and it is getting harder to spot the worst online financial scams. Following this advice will allow you to protect yourself and your finances, and protect you when you’re using the web.

Watch Out for Fake Tax Refunds 

One of the major ways in which many normally financially savvy people get caught out by scammers is through fake tax refund scams. Fake tax refund scams are incredibly versatile, and they target almost everyone.

People receive fake tax refund scams via text, email, post, phone calls, or even in person. Hoaxers and financial scammers rely on their scams to seem reliable and real. However, tax organisations such as the HMRC have very specific ways of contacting people in regards to refunds or unpaid taxes.

If you receive any communication from your local tax organisation, make sure that you are contacting them before you make any major decisions. 

Bank Phishing 

Another way in which otherwise financially-educated people are scammed is via bank phishing scams. As aforementioned, scammers rely on their scams being believable and real, and they have evolved over the years to become very good at this.

Many people all over the world are receiving hoax calls pretending to be from their bank, often claiming that the person needs to act urgently. They will be urged to click on a link which will then steal their information and money. However, many banks are now working to prevent their account holders from being scammed, especially older people who aren’t as technologically savvy.

If you receive a call or email pretending to be from your bank, ring your bank directly through the number you receive on your statements or their official website. They will be able to confirm whether the call you received is real – until then, do not click a link or divulge any personal information. 

Scammers are Exploiting the Cost of Living Crisis 

The cost of living crisis is making people want to be more financially educated and work on saving more money. However, scammers also want to make more money during the cost of living crisis and will stop at nothing in order to get that money.

They are more than happy to exploit this crisis in order to steal your money. For example, many vulnerable people are being scammed into divulging their financial information through texts pretending to be from the government, offering them financial help. Many cybercriminals are also pretending to be from energy companies, offering a discount.

Once you click the link in the email or text, your details will be gone. Make sure that you’re doing everything in your power to avoid this by researching these deals and keeping your information safe via encryption and cyber security. 

Pay Attention to Website Addresses

One way in which scammers can get your details and financial information is through fake website addresses. By creating a fake website that imitates a well-known organisation, they can scam people into divulging their sensitive information. For example, many scammers pretend to be banked by copying the interface and design of that real brand’s website.

However, the website address cannot be cloned, so the website address will be slightly different. There may be an added number or space – but it won’t look the same as the official website’s address. You may need to look closely at all website addresses in order to avoid scams. 

Pay by Credit Card for Added Protection

If you’re someone who purchases a lot of things online, you may want to consider switching your purchasing method to a credit card. When you buy things online with your debit card, you could be making yourself more vulnerable to losing money. This is because your debit card is less protected, and you could risk losing all of your money if you fall victim to a scam.

However, your credit card is protected with insurance from scams, meaning you could get your money back in case you are scammed. Always be careful not to get into debt when using a credit card, however, it could be a great way to protect yourself when shopping online. 

Look Out For Investment/Cryptocurrency Scams

Many financially savvy people want to invest their money in order to make passive income or have a return on their investment someday. However, scammers are not above exploiting this desire to invest your money, and investment and cryptocurrency scams are rife. Actually, it’s estimated that 37% of social media scams last year were investment scams.

The best advice here is to be aware of things that seem too good to be true – investment scams will often involve someone advertising an investment that ‘made them thousands in days.’ If an investment advertisement promises a very high return with no risk and little information about the company, it is most likely a scam. 

Be Wary of Advertising

Unfortunately, scammers sometimes use social media advertising in order to promote their scam or a fake product. There have been many reports of misleading advertising on both Facebook and Instagram. The prices are usually very low, which could attract a lot of people to buy into their scam.

There are many signs to look out for such as poor-quality product images, low price points and mistakes in the advertising copy. Knowing how to spot fake advertising scams is one of the best things you can do in order to avoid losing your money. 

Track Your Information

If your personal and financial information has been compromised before, you run the risk of losing your money again. Many scammers make extra money out of your data by selling it to other scammers on the dark web.

There are many ways in which you can avoid being scammed again, such as changing your information regularly such as passwords and pin numbers. You can also invest in dark web monitoring in order to track if your information is being sold online, which is especially important if you run a small business. 

Avoiding the worst online financial scams is one of the most important things you can do in order to protect yourself and your finances. If you stay educated and vigilant, and have a better chance of protecting your money from these cyber criminals.