Internet Scams: How to Identify, Avoid, and Report Online Fraud

Most Americans spend a lot of time online. The internet is where we get basic information, do much of our professional work, connect with friends, meet new people, and shop. The frequency with which we use the internet can create a false sense of security. After all, if we’re online all day, every day, and nothing bad has happened yet…is there really anything to worry about?

Unfortunately, yes! There are a lot of scams out there, and some people avoid them because of pure luck. What happens when your luck runs out? You could end up losing money, your reputation, and your sense of security. 

It doesn’t have to come down to luck. If you know and understand how internet scams work, you can be far more effective at avoiding them. Knowing that certain types of scams exist is important, but knowing how those scams work is even better! 

Understanding internet fraud scams

Internet fraud scams can range from simple to incredibly complex. Almost everyone falls into a group of people who are the ideal target for a variety of fraud scams. For example, senior citizens are more likely to be targeted by “grandparent scams,” in which a scammer impersonates a grandchild and requests money for an emergency situation. Adults of all ages are targeted by fake toll scams, and teenagers tend to be defrauded by online shopping scams.

Women and men are both targeted by romance scams. Men are more likely to fall victim to these fakers, whereas women tend to lose more money. 

When it comes to internet fraud, it’s important to understand that scammers are working hard—and spending a lot of money—to develop ways to trick unsuspecting victims. There are two main ways to fight internet fraud: 

1. Passing strong fraud protection laws that take these crimes seriously
2. Understanding the ways that fraud works so that you can avoid being tricked

You can work on the second option while supporting the first! 

What qualifies as internet fraud?

For something to be considered fraud, it must meet these three conditions: 

• A materially false statement was made with the intent to deceive 
• A victim relied on that statement
• A victim experienced damages because of that deception

There may not be a single legal definition of “internet fraud,” but it is generally understood to be any type of cybercrime that uses the internet to perpetrate fraudulent activity. There is no such thing as accidental fraud, because all fraud requires the intent to deceive. 

This means that if someone posts something on the internet that isn’t true, but they thought they were sharing something factual, that person hasn’t committed fraud. However, if someone knowingly posts untrue information on the internet with the intent to trick someone else into handing over their money or private information, then you are looking at internet fraud. 

Internet fraud scams target both individuals and businesses/organizations. Examples include: 

• Phishing scams
• Identity theft schemes
• Online shopping fraud
• Romance scams
• Tech support scams
• Fake job offers
• Investment scams
• Nigerian prince/foreign lottery scams
• Ransomware attacks
• Fake antivirus software
• Charity scams
• Credit card fraud
• Cryptocurrency scams
• Social media impersonation
• Business email compromise
• Fake website/URL fraud
• Data breach scams
• Sextortion scams
• Advance fee fraud
• Fake invoice scams

Keep reading to learn more about many of these schemes and how they work. 

Common tactics used in internet fraud

Although the specifics of the con may vary from one scam to the next, you’ll often see similar tactics at work. Think of these as the bones of any scam. Bodies come in all shapes and sizes, but inside of everyone, you’ll find bones, muscles, organs, and more. Internet fraud is similar. The appearance may change, but underneath, the same mechanisms are at work. 

Social Engineering and Impersonation
Manipulators pose as trusted entities to trick victims into revealing confidential information or taking actions that benefit the scammer.

Malware

Malicious software infiltrates devices without the user’s knowledge to steal information, extort money, or damage systems.

Phishing

Deceptive messages appearing to be from trusted sources lure recipients into clicking malicious links that steal credentials or install malware.

Fake Websites

Convincing replicas of legitimate websites with similar URLs harvest credentials, sell counterfeit goods, or collect payments for products that never arrive.

Credential Harvesting

Attackers systematically collect usernames, passwords, and authentication details through various methods to gain unauthorized access to accounts.

Pretexting

Scammers create elaborate false scenarios and backstories to establish trust and extract information from unsuspecting victims.

Watering Hole Attacks

Instead of directly targeting victims, attackers compromise legitimate websites frequently visited by their targets to deliver malware.

Vishing (Voice Phishing)

Phone-based scams use spoofed caller IDs and social engineering to trick victims into revealing sensitive information or making payments.

Smishing (SMS Phishing)

Text messages containing malicious links exploit the high open rates and limited security features of mobile devices to deploy phishing attacks.

AI-Enhanced Impersonation

Advanced artificial intelligence creates deepfakes, cloned voices, and personalized messages that bypass traditional red flags of fraudulent communication.

Real-world examples of internet fraud scams

According to the FTC, 2024 was a big year for scammers. 

• Consumer fraud losses increased by 25% in 2024, reaching $12.5 billion compared to the previous year.
• The percentage of people reporting financial losses from fraud jumped significantly from 27% in 2023 to 38% in 2024.
• Investment scams caused the highest losses at $5.7 billion, representing a 24% increase from 2023.
• Government imposter scams resulted in $789 million in losses, an increase of $171 million from the previous year.
• Job and employment agency scams have seen dramatic growth, with the number of reports tripling from 2020 to 2024 and losses increasing from $90 million to $501 million during that period.

Those statistics tell us that the problem is significant. What they don’t tell us is how much emotional and psychological damage comes with each of these losses. The financial cost of falling victim to internet fraud is serious enough, but it is often accompanied by shame, anger, embarrassment, and other emotional losses. 

The most common types of online scams

So what do these scams look like? That’s the question, isn’t it? The most popular scams work because they catch people off guard. Cybercriminals are most successful when they can manipulate their victims into feeling a false sense of security. Even the most skeptical people tend to let their guard down when they think they’re safe and secure. 

Let’s take a look at 11 types of scams you’re most likely to encounter online. 

Phishing and Email Phishing Scams

Phishing attacks use convincing fake emails that mimic legitimate organizations or senders. This trickery allows scammers to craft messages with urgent language about things like account security, package deliveries, or payment issues. People fall for these phishing emails because they don’t realize the sender is illegitimate, or they feel pressured to respond before they have a chance to investigate. 

Mass phishing casts a wide net using generic messages, while spear phishing researches specific targets first. 

Signs of a phishing attempt include: 

• A false sense of urgency (“Your account will be locked”)
• Lookalike domains (paypa1.com vs paypal.com)
• Malicious links disguised as legitimate ones
• Authentic-looking logos and formatting

Invoice Fraud and Business Email Compromise

Some scams target businesses, from small businesses to large enterprises. 

Invoice fraud works by infiltrating or spoofing the email accounts of executives or vendors. Once established, scammers will:

• Monitor communication patterns to understand payment processes
• Time attacks to occur during busy periods when verification might be rushed
• Insert themselves into existing email threads for authenticity
• Make small, believable changes to legitimate invoice details
• Create urgent scenarios that bypass normal approval channels

Tech Support and Scareware Scams

These scams generate fear through fake virus alerts and tech support notifications that appear suddenly on users’ personal screens. 

The deception works through:

• Browser pop-ups that can’t be easily closed
• System-like warnings with official logos and technical language
• Countdown timers that create artificial urgency
• Realistic-sounding technical explanations of non-existent problems
• Remote access tools that give scammers complete control of your device

Government Impersonation and Tax Scams

Government impersonators leverage authority and fear of legal consequences to get people to hand over large amounts of money. They operate by creating fake government accounts, often spoofing official phone numbers on caller ID systems. By using official-sounding titles and agency names, they convince their victims that they are under investigation or at risk of serious consequences. 

Often, these tax and IRS scammers lie about serious consequences, such as a pending arrest warrant or suspended benefits, to create that hallmark of scams: a sense of urgency. They are especially good at exploiting confusion about government processes to take advantage of their victims. 

The IRS will never contact you over the phone or via email to discuss your taxes. 

Online Shopping Scams

Fake shopping sites capitalize on people’s desire for deals and hard-to-find products. These operations clone legitimate websites with small differences in the URL. For example, if a major retailer’s URL is “www.majorretailer.com,” a scammer might create “www.majorretaileronline.com.” 

These online shopping scams involve: 

• Displaying artificially low prices on trending products
• Showing fake inventory for items that are sold out elsewhere
• Creating a sense of urgency with countdown timers for special deals
• Using stolen images and listings from legitimate retailers 

Social Media and Impersonation Scams

If you or someone you know has ever had their Facebook account cloned, then you know what this looks like! Social media impersonation scams leverage the trust people have in existing relationships to defraud their victims. They may also mimic celebrity accounts and public figures, taking advantage of people’s admiration and sense of being starstruck. 

In these cases, fraudsters: 

• Steal profile photos and basic information to create convincing duplicates
• Research targets through public posts to personalize approaches
• Build relationships over time before introducing financial requests
• Create elaborate backstories to explain why they need money
• Often claim to be stranded, in medical emergencies, or offering exclusive deals

Gift Card and Prepaid Card Scams

Gift card scams rely on the cards’ cash-like properties. These scams direct victims to specific stores to purchase gift cards. Legitimate businesses will never ask you to pay for products or services in the form of gift cards! If you are asked to buy gift cards to pay for anything, you should stop and investigate further. 

Often, these scammers operate from outside of the US. The scammers get users to transfer the balances to other accounts and may use emotional manipulation to prevent people from stopping to verify the transaction’s legitimacy. 

Package Delivery Scams

With the rise in online shopping in the past decade, people are accustomed to receiving a lot of packages. Delivery scams exploit our anticipation of packages by sending texts or emails notifying people of “urgent” delivery problems. 

To get your package, the scammer will say that you need to click a link, hand over personal information, or install unfamiliar software. These scams are essentially using a phishing strategy, but they take advantage of the fact that people want to get their packages and may not always remember what they ordered. 

These scams may also include requesting a delivery fee to be paid for delivery. The scammers will then steal the credit card information. 

Job Scams and Money Mule Recruitment

Job seekers may be especially vulnerable to scams that target their need for a new job. These scammers advertise fake jobs on legitimate job boards. Sometimes, the jobs seem too good to be true, but they may also post very realistic ads. 

The scammer will conduct the interview entirely via text, email, or a mobile app. Upon “hiring” the victim, the scammer will scam them by: 

• Sending counterfeit checks for “equipment purchases,” which may bounce
• Having the victim deposit checks, keep a portion, and wire the remainder to the scammer
• Asking for upfront fees for applications, background checks, or training materials 
• Using the victim to unknowingly launder money 

Money mules are people who agree to move illegally acquired money from one place to another, often over national or international borders. Scammers will target people who are looking for work or extra money online and ask them for a “favor” of transferring money. They tell the target that in exchange for this favor, they will get to keep some of the money. Often, these individuals have no idea that they are transferring illegally obtained money. 

Charity Scams

Charity scams are some of the most deplorable scams,  because they capitalize on people’s emotions following disasters or during difficult times. These scammers create websites that mimic legitimate charities. Using emotional appeals and stolen images, they set up fake donation processing systems that really just take people’s money. 

Charity scammers also use high-pressure tactics to prevent people from looking closely at their copycat or fake organization. People may donate to these fake charities and never even know that they’ve been scammed unless: 

• Their information is used to make unauthorized purchases
• They are promised special tax benefits or matching donations that never materialize
• They learn about the scam from someone who has more information about it than they do

Utility, Telecom, and Subscription Scams

Because people are dependent upon essential services like utilities and telecommunication, fraudsters will create panic in their victims. They contact their targets and pretend to be from service providers, warning of potential outages. 

For example, they might call before an extreme weather event and explain that the household is at risk of a power outage, but they can guarantee ongoing access to the power grid with their premium subscription services. 

These scammers may also: 

• Claim to be from local, state, or federal government agencies
• Offer nonexistent refunds for services that require verification of banking information to process
• Create fake billing portals to capture payment information
• Send texts about “suspicious activity” that requires immediate verification 

Warning signs of a scam

Scammers continuously refine their tactics, which presents a challenge to anyone trying to avoid getting tricked. However, there are certain warning signs that remain constant across most internet fraud attempts. 

The more familiar you are with these red flags, the more effectively you can detect scams. The important thing is to develop a strong instinct for scam detection. A healthy sense of skepticism, combined with knowledge of how scams work, will take you far. 

Common red flags in scam emails, websites, and messages

Scammers will do everything they can to shut down your natural skepticism. The people who design these schemes are experts in manipulating the psychological triggers that cause us to act quickly, before we have a chance to realize we’re being tricked. 

These manipulation tactics include the artificial urgency we’ve discussed throughout this guide, as well as fear-based threats (“You will be arrested if you don’t take action”) and emotional manipulation.

Additionally, some hallmarks of scams include: 

• Requests to use payment methods that can’t be traced or reversed (especially gift cards)
• Demands for sensitive information that legitimate companies wouldn’t ask for
• Poor grammar and spelling that legitimate organizations wouldn’t allow
• Generic greetings rather than using your actual name

How scammers gather and use personal data

Scammers can use several approaches to identify potential victims. Sometimes, they cast a huge net, sending out phishing emails to hundreds of thousands of people and waiting to see who falls for it. (AI helps them do this!) However, they can also target individuals who are more likely to surrender their personal data or their money. 

Careful targeting may include: 

• Purchasing data from previous breaches containing emails, passwords, and personal details
• Using AI to crawl through social media profiles, which provide valuable information about relationships, interests, and life events
• Accessing public records to reveal property ownership, court cases, and other personal details
• Monitoring trending topics and news events to craft timely, convincing messages

When determining if a communication seems suspicious, trust your instincts. Legitimate organizations maintain consistent communication patterns and never pressure you for immediate action or sensitive information.

How to report an internet scam

Reporting scams isn’t just about trying to recover your own losses—it helps authorities identify patterns, shut down fraudulent operations, and prevent others from becoming victims. If you were the target or victim of a scam, we recommend reporting the incident to the authorities. 

Internet scam reporting channels

The U.S. government maintains several channels dedicated to fighting internet fraud:

• The Federal Trade Commission (FTC) at ReportFraud.ftc.gov collects consumer fraud reports and shares data with law enforcement
• The Internet Crime Complaint Center (IC3.gov), operated by the FBI, specializes in internet-facilitated crimes
• The Consumer Financial Protection Bureau handles financial scams affecting consumers (Important note: The CFPB is affected by DOGE-related cuts and may no longer be able to offer the same protections as it did before 2025.)
• Your state’s Attorney General’s office typically has fraud divisions for local cases

For platform-specific scams:

• Social media platforms have dedicated fraud reporting tools in their help centers
• Email providers offer options to report phishing and spam
• Financial institutions have fraud departments that track scam patterns
• Online marketplaces provide mechanisms to report suspicious sellers or listings

Contact the platform’s help account to find out the best way to report attempted or successful scams. You may be able to click “report” on the message, too. 

What to include when reporting a scam

The more information you can give when reporting a scam, the better! Some platforms will only allow you to submit a notification or select from a drop-down list of options. If you are notifying the authorities of a scam, however, you should include as much information as you can. 

The most effective reports include: 

• Original emails with complete headers (technical information showing the message’s origin)
• Screenshots of websites, messages, or phone calls before they disappear
• Exact URLs of suspicious websites (copy and paste rather than typing these out)
• Dates and times of all interactions
• Phone numbers, email addresses, and account names used by scammers
• Any financial transaction details and payment methods used

How internet scam reporting helps prevent future fraud

Why should you report these scams? Well, your report contributes to a larger effort that helps authorities catch online predators. It also helps cybersecurity experts identify emerging patterns before they spread widely through the population. 

Reporting the scam provides important data to the authorities, which can be used to create consumer alerts and awareness campaigns. People can’t study and prevent these scams if they don’t know that they are happening!

Reporting scams also: 

• Enables law enforcement to prioritize resources toward the most harmful scams
• Assists in strengthening regulations and developing better safeguards
• Creates evidence trails that help prosecute scammers when caught

Even if your individual case isn’t immediately solved, your report becomes part of a database that helps connect related incidents and build stronger cases.

Staying ahead of scammers

As scammers adapt their tactics, protecting yourself requires ongoing vigilance and education about the latest threats. We want you to be safe! These are some of the best WhatIsMyIPAddress.com-approved tools and strategies to protect yourself before you become a target. 

Tools and habits to protect yourself online

Having good digital safety habits will offer you a lot of protection. You can take steps now, before you’re ever targeted by a scammer, to make yourself a less appealing target. 

Some safety measures we recommend are: 

• Verify website security by looking for HTTPS and the padlock icon in your browser
• Use search engines to research unfamiliar companies before engaging
• Install privacy tools like ad blockers and tracker blockers
• Avoid clicking on a fraudulent link to a fake financial website by typing the URL directly or using bookmarks
• Pause before responding to any message that creates strong emotions in you 
• Keep your operating system and browsers updated with security patches

How to secure your devices and accounts

The best way to secure your devices and accounts is to create multiple layers of protection. Do that by:

• Using unique, complex passwords for each important account
• Using a password generator for the strongest possible passwords
• Enabling two-factor authentication whenever available
• Installing reputable antivirus software on all devices
• Regularly baking up important data to secure locations
• Reviewing account activity and statements monthly for unauthorized transactions
• Setting up fraud alerts with credit bureaus
• Limiting the personal information you share publicly online

Educating others about internet scams

You may not be the ideal target for scammers, but the people in your life may be! Vulnerable populations may need extra protection from scams:

• Older adults often become targets due to perceived wealth, trusting nature, and less familiarity with technology
• Teenagers and young adults are susceptible to social media, gaming, and shopping scams
• Small businesses face targeted attacks due to less robust security measures

We encourage you to share the resources in this guide with your community! That includes sharing: 

• The FTC’s Consumer Information website, which offers free educational materials
• AARP provides senior-focused fraud prevention resources
• Local libraries and community centers often host internet safety workshops

Remember that protecting yourself from scams isn’t about paranoia or avoiding all online communication. Rather, it’s about developing healthy skepticism and verification habits that become second nature. By staying informed and sharing knowledge with others, you contribute to making the internet safer for everyone.