How E-mail Scams Work


Shopping online requires careful monitoring to avoid potential e-mail scams.
Shopping online requires careful monitoring to avoid potential e-mail scams.
© Photographer: Tyler Olson | Agency: Dreamstime

Almost everyone who has e-mail has been greeted with a message that offers an amazing financial opportunity. From pleas from African government officials to notices that you've won a lottery (that you don't remember entering), the e-mail messages appear too good to be true. And they are.

E-mail scams and Internet fraud are two of the most common complaints of computer users today. Often well disguised and including just enough true information to be enticing, e-mail fraud can be potentially dangerous to the recipient's finances and credit rating. These thieves may seek to steal your money directly, using bank account or credit card numbers you provide. Or they may seek to steal your identity, running up charges in your name. Money Magazine reports that more than 93 million personal data records have been lost or stolen since February 2005.

No one is safe. The FBI issued a warning in July 2007 about an increasing number of e-mail scams where the perpetrators impersonated the FBI to intimidate victims into giving up personal data. A similar e-mail scam was sent to taxpayers seemingly from the Internal Revenue Service, telling the taxpayers that they had an unclaimed refund.

E-mail scammers also act quickly. In November 2007, CNN reported that scammers were e-mailing people and asking them to donate to victims of the California wildfires.Such scams also appeared after 2005's Hurricane Katrina.

A recent report from Symantec, a supplier of Internet security software, said Web pirates are moving away from viruses and other damaging software and instead are focusing on financial gain through fraud. Government and private citizens in the United States provide more than half of the Internet activity that might lead to identity theft, the report stated.

E-mail scams and Internet fraud are widespread and costly. The FBI estimates computer-related crimes, including virus attacks, identity theft and other fraud, has cost $400 billion in the United States. The Internet Crime Complaint Center, a joint venture between the FBI and the National White Collar Crime Center, logged its 1 millionth complaint in the summer of 2007.

In this article we'll discuss e-mail scams and Internet fraud --  how to recognize it and how to protect yourself.

Avoiding E-mail Scams

E-mail scams such as phishing involve sending fake e-mails.
E-mail scams such as phishing involve sending fake e-mails.
Image courtesy of AntiPhishing.org

E-mail scams are constantly evolving, driven by the nature of the crooks who invent them. In many cases, avoiding e-mail scams or Internet fraud can be achieved by being aware of the different methods that scam artists use. Here are some prime examples of e-mail scams along with tips on how to avoid becoming a victim:

  • Phishing: This scam involves thieves trolling the Internet with fake e-mails, Web sites, chat rooms and other devices while illegally using the names of trusted financial brands in an attempt to convince victims to divulge personal financial information such as credit card or social security numbers.
  • Money handling: This scam involves recruiting a third-party to receive funds stolen through another e-mail scam into an account before then transferring the money overseas, minus a commission. One such e-mail that recruits money handlers, or "mules," often has a subject line like, "I need your assistance," and a message that describe the sender as an overseas government official who is trying to move his countries' assets to a new secure location.
  • Advance fee fraud: In this arrangement, a person is approached by someone posing as Nigerian official about an opportunity to make a huge commission by helping the crooked "official" hide a massive overpayment on a government contract. In the end, the victim is persuaded to provide a large up-front fee to keep the transaction moving forward.
  • Lottery scams: Potential victims are notified via e-mail that they have won a large prize in a foreign lottery. In most cases, the victim is asked to provide either an up-front fee, or bank account or social security numbers so that the lottery can transfer the money.
  • Internet auction scams: In this case, scam artists pick victims from those using sites such as eBay or Craigslist. They contact those bidding by e-mail asking to work with them outside the auction to make a deal. As usual, the perpetrator asks for payment up front, often in cash.

The best way to avoid e-mail scams and Internet fraud is by using common sense, experts agree. If it sounds too good to be true, it probably is. If you receive an e-mail from an unknown source, practice extreme caution. Keep in mind that the latest wave of e-mail fraud relies on targeting e-mails to specific individuals whom the crooks have picked through various means. Because of this, such an e-mail may contain information designed to peak your interest. Don't be fooled.

Also, never click on a link provided in such an e-mail, as it may take you to a site where malicious software will attempt to invade your computer. If someone is offering you something for free, such as software downloads, be suspicious.

Above all, NEVER give out personal, sensitive information, such as social security, bank account or credit card numbers in response to such e-mails.

Vincent Weafer, an Internet security expert for Symantec, advises computer users to make sure they take advantage of patches offered by browser providers, which can plug holes in security systems discovered after the software's release, CNN reported.

Money Magazine asked several identity theft experts how they protect themselves. The experts said the most important steps include:

  • getting free credit reports three times a year
  • keeping an eye on online banking and brokerage accounts
  • using cash or credit cards (not debit cards, which are associated with your bank account) when practical
  • telling banks and other institutions not to share your financial info with another party.

Consumers should guard their social security number closely and ignore e-mail and other solicitations asking for sensitive information. On the next page, we'll talk about how to report e-mail scams.

Reporting E-mail Scams

The FBI monitors e-mail scams and sends out alerts.
The FBI monitors e-mail scams and sends out alerts.
Image courtesy of FBI

If you're the victim of a traditional swindle, most people know what to do: File a police report with the proper jurisdiction if it's a criminal matter, or hire a lawyer. But Internet fraud and e-mail scams happen in the nether world of Cyberspace, where it's not always easy to find a cop on the electronic street corner. What's a victim to do?

There are definite steps you can take for reporting e-mail scams and Internet fraud. Several federal agencies, responding to the growing volume of scams, have set up divisions to take reports and investigate such incidents. Reporting e-mail scams helps everyone on the Internet.

The FBI, together with the National White Collar Crime Center, run a Web site dedicated to Internet crime, called the Internet Crime Complaint Center. Visitors can learn more about Internet crime, review a "Frequently Asked Questions" gallery and view e-mail fraud and Internet scam examples. The site contains a large number of tips for avoiding specific scams. It also has a link for filing a complaint against a third party whom you believe has defrauded or attempted to defraud you.

The U.S. Department of Justice also hosts Web sites that allow you to report Internet fraud and e-mail scams. The site contains links to documents on how to report such crimes broken down by the specific type of fraud. It points out, for instance, that the U.S. Secret Service, U.S. Postal Service, Bureau of Alcohol Tobacco and Firearms and U.S. Immigration and Customs Enforcement all play a role in investigating and prosecuting e-mail scams and Internet fraud, depending on its nature.

There are also many private Web sites that contain information and tips about what to do if you suspect an Internet or email scam. Site such as Scamdex and Hoax-Slayer are two examples.

If the past is any indication, e-mail scam artists and Internet fraud perpetrators will continue to evolve with technology, constantly probing security systems for weaknesses and searching for victims to dupe. Like expert marketers, a recent trend has e-mail scams shying away from the "mass mailing" approach they once used in favor of targeted, more personalized appeals. Internet users should always use caution when receiving e-mails from unknown sources and should avoid following links they provide. Use the delete key, experts advise. If you think you've been a victim, report it to the online authorities.

For more information about e-mail scams and related topics, check out the links on the next page.

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