In 2016, John received an email that would change his life. The email, which appeared to have been sent by Netflix, asked him to update his account as his subscription had expired.
He followed the link, entered his credit card details, and completely unbeknown to him, gave away his personal data to hackers, who would use his details to commit fraudulent activities.
John’s story is only one of many millions who are victims of phishing scams each year.
What is Fraud?
Fraud is an intentional act or omission designed to deceive others. Victims of fraud suffer a loss in monetary value, personal property and/or stolen sensitive information, which in return becomes the perpetrator’s gain.
The pandemic has led to a drastic shift towards e-commerce, increasing the number of consumers who prefer to buy goods online from the commodity of their home. Hence, the risk of fraud is continuously on the rise.
Fraud can be divided into three categories. Unfortunately, these are also the most common types of fraud with the possibility to turn into chargebacks:
- Lost or stolen card;
- Unauthorized or not recognized transactions;
- Friendly fraud — these would be transactions done by the cardholder but claims fraud to get money back.
How does fraud happen?
Fraud evolves alongside technology. If before hackers were posing as legitimate owners of an online store, calling cardholders seeking to obtain information, nowadays, they have become savvier, obtaining sensitive information through other inconspicuous means.
Cyber thieves are constantly trawling through network security systems which have not been recently updated. Hackers are on the lookout for glitches across the web. These gaps give hackers easy access when it comes to obtaining sensitive information.
Some use the following means of interaction to obtain personal data:
- Email or phone calls
- Texting malware to smartphones
- Instant messaging
- Transparently re-routing traffic to fraudulent websites
- Man-in-the-middle attacks
- Counterfeit products
- Online auctions or deals
The digital assets industry, mainly for cryptocurrencies, has noticed a certain trend on the increase. Instacoins, being a bitcoin brokerage, noted a high increase in so-called Social Media Scams. These involve the popular communication platforms WhatsApp, Instagram and Facebook, which are used daily by billions of users worldwide.
In these scams, fraudsters disguised as ‘trading account managers’ contact individuals directly through their social media profiles, and encourage them to invest money for a quick profit.
Other fraudulent scams on the rise are:
- Phishing scams: Fraudsters get hold of usernames, passwords or seed keys by using Punycode (a slight difference in the URL address as putting a ‘dot’ below or over a letter of the address. These usually are more effective over mobile devices.
- Blackmail scams: Scammers email victims claiming to have been hacked. Most of the time, sexual information or images are used to blackmail victim, in what is referred to as sextortion. The scammer threatens to send the material downloaded and info to the family and friends unless they pay.
- Microsoft technicians: Many victims are contacted by imposters claiming to be representing Microsoft, stating that your laptop or PC has a malware and is infected.
- Ponzi and Pyramid/MLM schemes: Joining a group or a company with the intention of selling a product, while recruiting more people under your umbrella with the intention to make more money in exchange of points, holidays or other luxury options.
- Equity crowdfunding: Fraudsters tend to market a business idea with a prosperous return on investment using BTC as funding, which would eventually bust out with the money and the BTC one has invested.
When it sounds too good to be true, tread with caution. Behind that too-good-to-be-true proposition hides a scammer with the intention of taking your money, in this case via bitcoins, only to never be heard of again.
How can I protect myself?
Fraud can be prevented by being vigilant. The following are ways on how to prevent it:
- Not every message or email received is true
- Do not share personal and sensitive information with people you do not know, over the phone or internet (unless making a secure purchase from brands you trust)
- If you are in doubt, do your research before committing
- Online deals that sound too good to be true are most likely a scam. Be aware
- Love is blind but you and your financial situation are not
Instacoins always uses 3DS and VBV for each and every transactions. We never asks you for your password via email, phone, or chat.
Instacoins Estonia OÜ is incorporated in Estonia and is licensed to conduct Virtual Currency Services by the Estonian Financial Intelligence Unit.