Online Fraud has destroyed many people's lives.
The advent of the internet has changed the way we do commerce. Commodities can be bought and sold with the click of a button, with money being transferred instantaneously over channels that are as invisible as they are ubiquitous. In addition to convenience, online investing gives us access to markets previously only available through brokerage firms and middlemen. Investors are given far more power, able to make decisions on their own without having to pay for expensive commissions. Unfortunately, this freedom also comes with a price, as scam artists flock to the internet to take advantage of electronic money transfers and looser regulations. Every year over 125,000 victims report losses due to cyber theft, losing investments of more than $100 million.
Online Trading Scams
In the past, a scam artist looking to set up a brokerage scam would require a lot of effort. They would need to set up a fake office, purchase supplies, and put on a show for a prospective mark. This could only be profitable if the client was looking to invest heavily, and even then the very idea seems more like a farfetched movie concept than an actual scam. However, on the internet, constructing a legitimate looking website is far easier. Money transfers can be sent electronically to anonymous bank accounts overseas. The rise in online trading scams has made it incumbent on all investors to check and verify if a trading firm is approved and regulated by the SEC.
Email and 419 Scams
Other scams require neither investment into stocks, annuities, or other traditional methods of trading. In recent years more basic cons like Nigerian 419 scams have become popular on the internet. Usually these scams begin with an email from a supposed member of Nigerian royalty, asking for funds to help them access their lavish fortune, part of which they promise to their generous benefactor. In reality many of these Nigerian kings are scam artists hoping to use the internet to take advantage of gullible westerners. Investors should make a habit of deleting all unsolicited emails to avoid being ensnared in these types of scams.
