Identity theft scams

Fraud and scams are costing Americans over a billion dollars every year. The Internet Crime Complaint Center (IC3) reports over $1.4 billion was lost in 2017 alone. Many scams used to be carried out through the mail, newspapers and over the phone. People have been defrauded of their money through identity theft for as long as there’s been identity papers.

While analog scams do continue to occur, the majority of fraud attempts now occur online. We all think we are immune to the efforts of scammers but that’s simply not the case. Humans are naturally inclined to trust and assume good things will come to them, and sometimes lose their sense of judgment when it comes to emotional pleas and money. What’s worse is knowing that many people continue to give money away even after they realize the situation is fraudulent.

Here are some of the most common scams that are operating today. If you’re aware of what scams can look like, you’re more likely to avoid falling for them.

See also: How to place a fraud alert

Phishing Scams

Scammers create emails that mimic ones from well-known companies and brands, such as Amazon, eBay and PayPal. They encourage recipients to click links within the email to verify details or claim prize winnings. Unfortunately, the emails lead to websites that are designed to steal personal information or may download malware onto a victim’s computer.

You can watch out for some tell-tale signs of phishing emails. They may have one or more of the following characteristics:

  • The email isn’t addressed to you, or the name space is left blank,
  • There are spelling or grammar errors,
  • You are notified you’ve won a competition you didn’t enter,
  • The sending email address doesn’t match the company name,
  • The branding, images or colors in the email do not match the real company website,
  • The email claims to be from a friend who is stuck overseas and needs money sent,
  • You receive a delivery notice when you are not expecting a parcel.

If you think you have opened a phishing email, delete it straight away without clicking on any links or attachments.


Online extortion is a common scam, often taking the form of a threat against an individual or company that can be avoided in exchange for money.

Ransomware, where hackers hijack your computer files and encrypt them, is one form of extortion. The file owner has to pay a Ransom to have the file decrypted.

Sextortion threatens to release intimate photos of videos unless a fee is paid, while hitman extortion threats claim they are a hitman who has been hired to hurt or even kill you. The email then claims this can be avoided in exchange for your money.

Terrorist and bomb threats are similar to the hitman scam, and threaten your life and that of others unless you pay them.

A Distributed Denial of Service (DDoS) attack can block whole websites or internet services by flooding them with fake traffic requests. DDoS attacks are usually aimed at business owners for whom an interruption in service is very damaging. Businesses must pay a ransom to stop the attack.

Social media scams

Social media is a massive part of personal and even business life today and a natural environment for scammers to operate in.

Fake ads can claim to let you see who has viewed your profile, but instead you’ll be asked to download software and hand over access to your account and personal details. Fake celebrity news can act as clickbait and victims are required to enter personal details to access the article.

Other traps on social media can include impersonation scams where fraudsters create an exact replica of your public profile, connecting to your friend and family network and making requests posing as you.

Travel scams

As the number of people buying travel tickets or holiday packages online has opened the door for scammers setting up fake travel sites selling vacations and tickets that simply do not exist.

Travel is an expensive purchase with a large deposit upfront, so victims can lose huge sums of money.

Look out for free or discounted vacations that seem too good to be true, if you’re told you have won a vacation, beware being asked to pay a fee or provide credit card details.

Tax scams

Tax scams often take the form of emails claiming you have overpaid your tax bill and are due a refund.  The tax refund is just one of a number of tax based scams.

Also keep in mind fake audits where you are contacted by someone claiming to be from the IRS, and an error has been spotted in your tax payment records. Demands for an immediate payment and threats of additional fees or a jail sentence are used to cause panic, so always take your time to make sure the email and contact is genuine.

Cryptocurrency scams

Cryptocurrency is a growing and very popular market for investors and is often targeted by scammers. Fake coin exchanges are one problem, and with so many exchanges popping up all the time it’s hard to know which ones are legitimate.

Coin exchanges have also been hacked including the Coincheck incident to the sum of $500 million.

Beware of relatively new or unheard of coins with a surge in value. ICO (initial coin offering) scammers organize mass investment, encouraging others to buy in. When the value increases further, the first investors cash out for profit leaving new investors with a worthless cryptocurrency.

Holiday Electronic Greeting Cards

Electronic greeting cards, or ecards, are sent via email, commonly around major holidays like Mother’s Day, Valentine’s Day and Christmas. The cards are often thoughtful or funny and include animations along with a personalized message from the sender. They can be a convenient way to send greetings to friends and family during the busy holiday season.

Unfortunately, the popularity of ecards has made them a target for scammers. It’s common for ecards to require the receiver to click through to a website to view the card. Scammers take advantage of this by creating fake ecards and directing victims to visit websites that download viruses and malware onto personal computers.

How can you tell if your ecard is from a friend or a fraud? Look for these clues and if in doubt, delete! Contact your friends directly to ask if they sent you an ecard if you are not sure of its authenticity. It’s possible that your friend’s email was hacked and used to send out virus-filled ecard emails.

  • The email doesn’t use your name (hello friend!),
  • The email doesn’t use a sender’s name you recognize, or uses unbelievable or generic names,
  • There are spelling errors,
  • The sending email address or the website they ask you to visit looks unusual, misspelled or unrelated to the card company’s name,
  • The details are incorrect, such as claiming you’ve sent a card rather than receiving one.

Nigerian Email Scam

Nigerian Prince scams, also known as 419 scams, are very common. Originally sent via letters and faxes, they are now sent to countless email inboxes every day. Here’s the premise: a lawyer or political official from a war-torn country reaches out and explains that there is a large sum of money trapped in an account (or maybe, a wealthy relative has died but they can’t pay the lawyers to access the inheritance). In any case, they ask the recipient to send a smaller amount so that the account can be accessed by the rightful owners. In return for the kindness, they will gladly share a large portion of the funds to say thank you.

It’s the best example of the adage, ‘if something sounds too good to be true, it probably is’.

If a scammer successfully convinces a victim to send money, they will latch on and start spinning a story about unexpected fees, bribes and other costs that need to be paid. Each time they promise it will be the last payment before the lottery-sized benefit is accessible to share. They don’t stop asking until the victim finally stops sending money.

It is almost impossible to recover the stolen funds, even if the crime is reported. This is because funds are usually sent through untraceable wire transfer services and more recently, cryptocurrencies. The lack of paper trail means the money is not able to be recovered.

This is a type of scam called advance fee fraud. Any letter or email that asks the recipient to send a small amount of money in order to receive a much larger sum is almost certainly fraudulent.

If you find a Nigerian scam email in your inbox, delete it straight away. Don’t risk entering into an exchange with them as often the scammers are experts in scam psychology and can quickly draw well-meaning people into becoming victims of fraud.

Internet Auction Fraud

Internet auction fraud is a difficult type of scam to avoid because there are so few warning signs for customers. Using online auction sites such as eBay involves a level of trust as buyers must pay for goods that they have not seen in person.

Scammers work auction sites by creating fake listings for items that do not exist. When victims pay for the item, it is never sent. It can be very difficult to recover the funds as scammers can open and close new accounts quickly. A less severe type of internet auction fraud involves sending items that are not as described in the listing, for example, the item could be of a lower quality, have undisclosed damage or be a picture of the item rather than the item itself.

Protect yourself on online auction sites by doing the following:

  • Use a credit card for purchases, as there is often additional financial protection offered by lenders,
  • Clarify payment methods and ensure it’s traceable (don’t pay with wire transfers),
  • Never give out your social security number or private details to a seller,
  • Read buyer feedback on the account before purchasing,
  • Use a search engine to research the company name before buying,
  • Check with the auction-hosting website to see how fraud cases are dealt with,
  • Never communicate with merchants outside of the auction site’s chat and messaging system, such as through email or text message.

Phony Identity Theft Protection or Credit Repair Scams

These scams typically occur over the telephone. Both identity theft protection and credit repair scams have roots in honest business models but are often hijacked to steal sensitive information and money from trusting victims.

Identity theft protection scams prey on people who are aware of the dangers of identity theft. They offer a service that claims to prevent it from happening, often for a fee. The caller will ask the victim to confirm sensitive details such as their Social Security number, driver’s license number, and mother’s maiden name. These details will be collected and used to perpetrate the exact crime that was meant to be prevented.

Credit repair scams are targeted at vulnerable people with poor credit history. They offer to increase a person’s credit rating by a specific number of points or claim to be able to remove negative history from the report. Scammers will demand an up-front payment to facilitate this supposed credit repair, and sometimes will also ask for personal data like above.

True credit repair organizations are governed by federal law and are prohibited from charging any fees until the service is delivered. Up-front charges of any kind are illegal. Be aware if a caller tries to convince you to lie to a federal agency in order to secure new identity documents or loans, you may be committing fraud yourself.

“You’ve Won a Prize!” Lottery Scam

Similar to the Nigerian scam, lottery scam emails offer a financial solution that is too good to be true. An email may arrive claiming that you have won a significant amount of money or prizes in a lottery or sweepstakes. These lotteries are sometimes based in Europe and offered in euros, to make the offer even more exciting and tempting. In order to claim your prize, you must supply identity verification information such as your social security number, birth date and bank details.

Of course, there is no lottery and you haven’t won anything. Victims are often dazzled by the amount of money on offer and are too quick to claim before verifying the email.

How can you know if a lottery email is a fake?

  • The email is not addressed to you personally,
  • The lottery name cannot be found on search engines,
  • It requests upfront payment to unlock the winnings,
  • The email asks for personal information to verify the winner,
  • You did not enter a lottery, competition, draw or sweepstakes.

“Make Millions Stuffing Envelopes!” Scam

Stuffing envelope scams are part of a broader family of work-at-home scams. No matter the details, they all offer people a chance to earn a lot of money while staying at home. These scams often target vulnerable individuals who cannot undertake traditional working roles outside of the home.

Envelope stuffing scams ask participants to send in a fee to purchase start up materials, pay registration costs or a security deposit. Most people do not receive anything from the callers from that point on, and the money is lost. The few people that are contacted again will be sent a pile of work to be completed and returned to the company. Invariably the work is deemed inadequate and will not be paid for.

Envelope stuffing scams and similar offers often have an added level of fraud built in. Sometimes victims are encouraged to bring other people into the scam, by being offered a reward or finder’s fee for every new sign-up. Unsurprisingly, the finder’s fee is usually taken from the registration costs of the newest victim, while the orchestrators continue to take the rest of the money without hesitation. This type of additional scheming is closely related to pyramid scams.

What Else Can You Do?

Scammers are always finding new ways to separate honest people from their money. It’s tiresome to always be on the lookout for scams and fraud but the consequences of identity theft can be wide-ranging and very damaging. It’s worth casting a suspicious eye over any unusual email or phone call.

Adopt a “need to know” approach to your personal data. Certain companies such as banks will have your personal records on file. They may ask for certain private details in order to verify they are speaking with the rightful account holder. Do not give out your details to a person that cannot themselves verify they are who they say they are.

Reduce the amount of information included in email signatures, on personal checks and on social media profiles. When your personal information is shared publicly it becomes much easier to scammers to impersonate you and steal your identity.

Always be suspicious of emails that come from unknown senders. Any email that asks for money in exchange for more money at a later date should not be trusted. Don’t click on any links – delete it straight away.

Never hesitate to verify information or requests. If you receive an email, call the company or visit the official website to confirm. Reach out to the Better Business Bureau to help distinguish between authentic companies and fraudulent scammers.

For more information on what to do if you think you’ve found a scam, and what to do if you’re a victim of fraud, please visit our article on How to report a scam.