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How to spot a “make money online” scam

How to spot a “make money online” scam

By: Nicole Gardner | May 8, 2020

Being able to spot “make money online” scams could help to stop you from losing your money to a scam artist. “Make money online” scams are scams that attempt to access your money by convincing you that you’ve found a way to make easy money online.

What are the most common scams?

There are plenty of “make money online” scams out there, but once you’re familiar with them, they’re easy to spot. Below is a list of some of the most common scams out there. You can find a more comprehensive list on the Action Fraud website. 

Investment scams

The investment scammer promises high returns if you invest your money in whatever they’re selling (foreign currency exchange and cryptocurrency are popular targets at the moment). These scams often appear to be endorsed by celebrities and can look very professional. Some even claim to be based in the UK!

Some investment scammers do actually pay you some money at first, but it doesn’t take long for them to disappear with the rest of your money.

Advance-fee and loan-fee fraud

Advance-fee fraud is often known as the “Nigerian Prince Scam.” You get an email from someone claiming to be rich, royal, powerful or famous, who’s having trouble transferring money overseas. They promise you a large amount of money if you let them transfer millions of dollars to your bank account. All you have to do is send them a little bit of money and your bank details, and you can have a share of their cash!

That’s when they disappear with your money, and sometimes empty out your bank account on the way.

Variations of this scam include:

Job scams or work from home scams

In job scams or work from home scams, the scammers offer you a new job, career or access to a training program. Of course, you have to pay them a large sum of money up-front to cover a variety of made-up fees.

If you’re lucky, you only lose the money. If you’re less lucky, they sell your details to other scammers as well.

Money mules

Money mules are people who launder criminals’ money by passing it through their own bank accounts in exchange for a portion of the money. Job offer scams can draw you into becoming a money mule.

While you don’t necessarily lose your money, acting as a money mule is illegal. Even if you act without knowing it is illegal, you can still be prosecuted.

Pyramid and multi-level marketing schemes

Pyramid and multi-level marketing schemes (including Ponzi schemes) were around long before the internet. The medium has changed, but the schemes haven’t.

These schemes claim to offer huge profits for little to no risk. They rely on finding a constant stream of new recruits. You pay a fee to enter the scheme and then you have to recruit more new members. Your money isn’t invested: it’s passed up the chain to pay the older “investors.” When new recruits run out, the whole thing collapses and the majority lose their money.

How to spot “make money online” scams

Watch out for the following red flags: once you know them, they’re easy to spot.

Personal accounts and details

Legitimate companies will never ask you to use your private bank account to transfer their money. Don’t give out your bank details unless you know and trust whomever wants them.

Investments and work at home

Any offer of guaranteed high returns on investments or a guaranteed high-paying job is probably a scam.

If an opportunity seems reasonable, check that the company is legitimate. Look them up on the FCA Register of authorised firms and UK Companies House, just to be sure.

Even if you find them on the FCA Register and Companies House, check the FCA unauthorised firms and individuals list and the FCA Warning List too.

Genuine employers don’t ask for money up-front before you start work. If your new boss asks you to pay them before you start, it’s probably a scam.

What to do if you’ve been scammed

If you’ve been scammed, you’re not alone. There are three steps you can take:

  1. Contact your bank immediately if you’ve shared your bank details;
  2. Collect and keep all the evidence (copies of documents and emails, screenshots of any private messages, email addresses, names and numbers, any information you gave the scammers, how you paid, bank statements); and
  3. Report the incident to Action Fraud.

Takeaway

You can find useful information on scams currently operating and what to do if you’ve been scammed on the Action Fraud website.

There are plenty of legitimate ways to make money online, so keep your wits about you, watch out for red flags, and have fun!