Identifying Financial Scams and Trends - Essay Example

Types of Scams and examples Student’s Name Course University Professor Date Threats and extortion This is a common type of scam and is subdivided into two; malware and ransomware and hitman scams. Malware and ransomware is mainly affecting people using the internet. Scammers use malware to trick people to install software that gives them access to your computer (O’Gorman and McDonald, 2012). Using this malware, they can access the files on your computer and can also tell what one is doing. They achieve this by sending links via emails and messages on social media claiming that they are videos of events or things which will be appealing to the users. They also deliver malware through pop-ups and different websites offering free downloads of entertainment like music and games. When one clicks on the links, they access fake websites which one thinks is a real website because they have branding and logos of a legitimate site. One is then asked to install software to access the video. After downloading the software, a malware infects the computer and allows the scammers to use the information they find to steal one's personal information. With this information, they make purchases using your credit card and can open accounts in banks or telephone services. The scammers can take loans or conduct illegal businesses using your name or sell that information to scammers who will use it for other illegal activities. On the other hand, ransomware enables the scammers to limit your access to the computer or even block your access forcing you to pay a ransom for the computer to be unlocked (O’Gorman and McDonald, 2012). The scammers use this malware to convince the victims to pay. They also pose as police and make claims that you have committed illegal activities and had to pay fines. Paying up does not guarantee that the computer is going to be unlocked and therefore, people should be careful about what they access on the internet. Hitman scams involve scammers who threaten your life and ask you to pay a certain amount so that they can spare your life. These scammers contact people and tell them someone has hired them to kill but will save their lives if they pay a certain amount of money. They reach people via messages and emails and give you bank accounts from which you are supposed to make the payment. They may also ask for one's personal information like bank details and warn people against informing the police. Scammers use major events and stories which the public will be highly interested in, to spread the malware. An example of threat and extortion scams is the malware which was spread using videos of the Malaysian Flight MH370 which disappeared in 2014. Scammers took advantage of the people who wanted to find out about that plane. They sent links via emails and messages on social media and individuals who opened the links were taken to a website which appeared to be legitimate, for example, BBC. This malware infected the computers and gave them remote access to the files which they used to force people into paying up for their computers to be unlocked. Unexpected money These are scams which offer people a large sum of money but to get it; they have to pay a certain amount. Nigerian scams are scams where people are asked to help transfer a significant sum of money out of the country and in return, they will get a share. They make contact by email, text messages or social media. The scammers tell fake stories about how there are large sums of money which are trapped in the central bank. This is in countries where there are civil wars, and therefore, the people being scammed won’t suspect because the stories will be on the news. The scams are called Nigerian scam because they started in Nigerian. The unsuspecting victims are asked to give their banking details so the money can be transferred, but the scammers use the information to steal the funds in the victims' accounts. The scammers may also ask to pay the charges or the taxes to help transfer the funds and promise to give a share of the funds. Another form of scam is the inheritance scam where the scammers offer people false promises of inheritance (Geldenhuys, 2016). They trick the victims’ into paying up some money or giving them their banking details. They often contact people and claim that they are lawyers or bankers and that you have an inheritance from one of your distant relatives. They often send many legal documents to the victims' to convince them that the succession is legitimate. The victim will be asked to pay some money and give their personal details so that the inheritance can be released. Reclaim scam where the scammers convince the victims’ that they are entitled to a reimbursement from a bank or the government (Jakobsson, 2016). This can be a compensation, bank fees or overpaid tax. They contact the victims' by email, phone call, and text messages and pretend that they are from a certain bank, organization or government institution. To claim that owed amount, one is asked to pay a certain amount. There are also up-front payment scams where one is invited to send a certain amount of money to receive a reward say a prize or a loan. Most scams fall under this form of fraud because one is asked to pay up front and receive the reward later. One pays up but doesn't receive the award and for those who give their banking details, the scammers take more than what they requested. There are numerous examples of unexpected money scams which have been recorded in Queensland, Australia. Fraudsters from Africa have deceived Queenslanders. The fraudsters have received millions of dollars from these residents over the years. The residents are asked to help transfer some money from a bank in Nigeria and will get a share in return, but they never receive the promised share. Before the money is deposited into their accounts, they are asked to pay some money which the scammers claim will be used to cater for taxes, legal fees, levies and payment to corrupt officials. Unexpected winnings This is the most common scam because most people will be willing to do anything to get free money which they know very well they don’t deserve or don’t even know the competition which they have allegedly won. The scammers ask you to pay some fee and get your prize from a lottery which you never participated in (Beals et al., 2015). They contact you by email, phone call, messages on social media or text messages. The won prizes can be a holiday or electronics like smart phones or laptops or money from a lottery. In order to get your prize, one is asked to pay a certain amount of money. The scammers will claim that the fee is to cater for insurance, taxes, courier charges, and bank fee. After making the first payment, the scammers will stall before giving you your prize and make you pay more. They may do this and never give you that prize because it's a scam and the prize wasn't even real. The scammers may also give you a phone number to dial and charge a premium rate. They will ensure that the phone call lasts for a longer period so that they can get more. They may also ask you to call another number which will charge an equal premium rate. When they make contact, they are usually not sure that the phone number or email address is live, but when you reply, they become sure and will ask you to respond quickly or miss out. The scammers usually ask you to keep the fact that you have won a secret for security purposes. They do this to stop you from seeking advice or more information regarding the competition. These scams usually use names of well-known lotteries and which are known to be legitimate like Spanish lotteries so that if one decides to do some research, they will think it's real (Harnish, 2015). The scammers ask you give your personal details for them to be sure you are the winner. They also ask for your banking details so that your winnings can be deposited. After getting these details, they use your information for illegal activities and steal all the money in your account. In some instances, the scammers send you a cheque of part of the prize to trick you into believing that it's legitimate. The cheque will bounce, and no payment will be received. The scammers take your cash and do not give you the prize or will send something but not the prize which they promised. An example of this scam is the Australian Lotto lottery. In this lottery, you receive an email informing you that your email address was the lucky email and that you have won US$800,000.00. They inform you that the draw involved over 900,000 email addresses from all over the weird and yours was among the lucky ten emails. They then give you a payment application form where you are supposed to fill your details. One is then asked to keep everything about winning confidential until the prize is processed. The email gives you further information on how to get your prize by contacting an agent. They ask you for your personal and banking details and then steal from you. Jobs and Investment Due to the high levels of unemployment and poverty, many people in the world are affected by this scam. One form is investment scam where a scammer claims to be a broker from a stock exchange and offers you advice on investments. The scammers claim that they are offering investments which have low risks and returns on the investment are quick and high. They often encourage you to make investments in companies overseas. Their offers sound like they are legitimate and they often provide documents to back up the claims. The investments will be on shares, mortgages and real estate. When one invests on this, they often lose their money. There are also scams on jobs and employment where you’re tricked that you are guaranteed a job with high salary or a way to earn money with little effort, but you have to pay some money (Jakobsson, 2016). The scammers do this by using ads on websites, but the opportunities are false. For you to get the job, you are supposed to pay to get the materials which you need for the job. After paying, they do not pay you, and if they pay, it's not what they promised. Other employment opportunities ask for your banking details so as to receive the payment but instead of paying, they steal all the money in your account or use your details to get loans. Betting and investments on sports is another scam which is very common because most people today gamble. The scammers convince people to invest in software which will guarantee profits from sports. They pose as legitimate businesses, and people do not get theirs after investing. Scammers sell software which they promise will give accurate predictions on sports usually football and horse races. The information one gets from this software can be obtained at very low prices from local newspapers. Another form of scam under betting is betting syndicates where scammers convince one to join and have to pay a fee which is compulsory. One is then required to make deposits to maintain the account. After paying up, one does not get the money back. The scammers often claim that the companies are legitimate and registered with the ASIC (Australian Securities and Investments Commission) and anybody who tries to do some research to ensure that the information is accurate will find that the company is legitimate (Jakobsson, 2016). An example is A Freelancer where there are postings of jobs which seem rigid to the freelancer, but in the real sense, they are scams. Many young people who are jobless and want to earn some cash often start writing on the different writing sites. On Freelancer, a scammer will post a job on data entry, and any freelancer will submit a proposal thinking that the job is actually about data entry. When you win the bid and check what the job is about, you often find that the job is on captcha entry. The scammer gives you a certain target after which they will pay you a certain amount, but they never pay or pay very little compared to what was promised or what you expected. References O’Gorman, G., & McDonald, G. (2012). Ransomware A growing menace. Symantec Corporation Jakobsson, M. (2016). Identifying scams and trends. In Understanding Social Engineering Based Scams (pp. 7-19). Springer New York. Beals, M., DeLiema, M., & Deevy, M. (2015). Framework for a taxonomy of fraud. Harnish, R. (2015). Cybersecurity in the World of Social Engineering. Cybersecurity in Our Digital Lives, 2, 143. Geldenhuys, K. (2016). Typical crimes commited by organized criminal groups in South Africa. Servamus Community-based Safety and Security Magazine, 109 (4), 14-19. Read More