Internet fraud: Definition, types, and how to stay safe

What is internet fraud?

Internet fraud is any scheme that uses online tools to deceive people for financial gain or to steal sensitive information. It includes everything from phishing emails and fake e-commerce sites to investment scams and emotional manipulation through romance frauds. What ties these tactics together is a reliance on deception and pressure to make you act without thinking.

These scams often use psychological tricks, like urgency, fear, or flattery, to get past your defenses. And they're increasingly hard to spot. Fraudsters now use AI to mimic real people, create fake websites that look legitimate, or generate convincing videos and voice messages.

The growth of internet fraud has been fueled by the scale and anonymity of the online world. Scammers can reach millions with little effort, face a low risk of enforcement, and adapt quickly to new technologies.

Online fraud isn't only a technical issue — it's deeply human at its core. It preys on emotion, trust, and the way we interact with the digital world.

The types of internet fraud

Cybercriminals use many different attack vectors and strategies to commit internet fraud. This includes malicious software, email for spreading malware, spoofed websites that steal your data, and elaborate phishing scams.

Phishing scams (email, SMS, social media)

Phishing is one of the oldest and most widespread forms of internet fraud. These online scams aim to steal sensitive information by impersonating trusted sources, like banks, delivery services, or even friends. Common forms include:

• Email phishing. You get an urgent email that looks legitimate but contains a fake link directing you to a login page designed to steal your credentials.
• SMS phishing (smishing). A message claims your package is delayed, asking you to click a link or pay a fee.
• Social media phishing. Hackers clone accounts or use DMs to lure you into clicking malicious links.

Example: An email from "Netflix" saying your account is suspended, containing a fake login page.

Malware and ransomware attacks

Malware is harmful software designed to infiltrate your device, steal information, or disrupt systems. It's often hidden in email attachments, suspicious downloads, or fake ads. Once installed, it quietly monitors your activity, collects passwords, or gives attackers remote access to your system.

Ransomware is a more aggressive form. It locks or encrypts your files and demands a payment (usually in cryptocurrency) to unlock them. Even if you pay, there's no guarantee your data will be restored.

Example: Opening a fake invoice PDF that installs ransomware, locking all your files.

Online shopping scams

Online shopping scams typically promise big discounts or exclusive deals on popular products to lure buyers in. The websites may look convincing, but there's no real business behind the scenes.

Common signs include no tracking information, no delivery updates, and missing return policies or customer support.

Example: You see a social media ad for a luxury watch at a steep discount. The checkout process is smooth, but the site goes quiet after payment, and the product never arrives.

Investment scams

Online investment scams are designed to look professional and trustworthy. They often target people through social media, messaging apps, or online forums, promoting easy returns with little to no risk. Some use real-sounding testimonials or charts showing fake profits to build credibility.

Two common types:

• Cryptocurrency scams. You're told you can double your money by investing in a new coin or platform, often with fake screenshots of profits.
• Ponzi schemes. Earlier investors are paid with money from new ones, creating the illusion of a successful venture until it all collapses.

Example: A Telegram group offers "expert guidance" and access to pre-launch crypto tokens in exchange for a buy-in fee.

Romance scams

Romance scams are built on an emotional connection and develop over weeks or months. They usually begin with a message through a dating site or social media from someone who seems kind, attentive, and genuinely interested in forming a relationship. Eventually, requests for money start.

These scams may involve:

• Long-distance relationships that never lead to an in-person meeting.
• Elaborate fake identities.
• Money requests tied to emergencies, visa fees, medical bills, or travel costs.

Example: A scammer posing as a soldier stationed abroad, asking for help wiring money.

Identity theft

Identity theft happens when someone gets access to your personal details (like your national ID, Social Security number, or bank credentials) and uses them without your permission. That information can be used to open credit accounts, apply for loans, or commit tax fraud in your name.

Common ways scammers steal this data include:

• Data breaches.
• Phishing and malware.
• Fake online forms or job applications.

Example: You apply for a loan on a fake website, and scammers use your personal details (like your SSN and bank info) to open credit cards or take out loans in your name.

Tech support scams

Tech support scams often start with an alarming pop-up on your screen or an unexpected phone call. The message claims your computer is infected or your software license has expired, and urges you to call a number or click a link. On the other end, the "technician" then asks for remote access or payment for fake software.

Example: A pop-up claiming your Windows license has expired, redirecting you to a fake Microsoft support line.

Job scams

Job scams take advantage of people who are looking for work. These schemes advertise roles that seem legitimate but demand money upfront for equipment, training, or background checks. In reality, there's no job at all.

Warning signs include:

• Vague job descriptions or interview processes that move unusually fast.
• Requests for payment before you start work.
• Emails or offers using company names, logos, or websites that look convincing but aren't linked to real employers.

Example: A work-from-home data entry job that asks you to pay for software before onboarding.

Other scams to know

Some scams have been around for years, but they continue to trap people with slight variations:

• Lottery and prize scams. You're told you've won a prize but must pay fees to claim it.
• Greeting card scams. You get a message with a link to an e-card from an unnamed sender. Clicking it installs malware.
• Nigerian prince emails. This is a classic scam promising a fortune in exchange for financial help.

Internet fraud statistics

According to the Federal Trade Commission's (FTC) March 2025 report, Americans reported $12.5 billion in losses to fraud in 2024. That marks a 150% increase from the previous year and the highest figure ever recorded.

Key findings:

• Investment scams were the most costly, causing over $5.7 billion in losses.
• Imposter scams (like tech support or romance) led to nearly $3 billion in losses.
• More than 1.1 million identity theft cases were reported through the FTC's IdentityTheft.gov website.
• People aged 20–29 were more likely than older adults to report losing money to fraud.

It's important to note that these numbers only reflect reported cases. Many victims never come forward due to shame, confusion, or not knowing where to turn.

How to spot internet fraud

Recognizing red flags is your first line of defense. Common signs of internet fraud include:

• Unrealistic promises. Offers of huge discounts, guaranteed returns, or unexpected prizes (especially if you didn't seek them out) are a major red flag.
• Urgency and threats. Messages that urge you to respond immediately or threaten consequences if you delay are designed to keep you from thinking clearly.
• Generic greetings. Messages that begin with "Dear customer" or "Dear user" instead of your name may indicate a mass phishing attempt.
• Spoofed email addresses. Scammers often create addresses that closely resemble real ones, like paypal-support.org or amaz0n.com. Look carefully.
• Fake login pages. These pages may look identical to the real ones but are designed to collect your username and password.

If something feels off, pause. Take a moment to verify the sender or the website independently — through official channels, not the links provided. When in doubt, don't click.

How to prevent internet fraud

You don't need to be a cybersecurity expert to protect yourself. Follow these practical tips for preventing identity theft and other types of internet fraud:

• Avoid reusing passwords across sites. Create a strong and unique password for each online account. A password manager will help you create and securely store complex passwords.
• Enable two-factor authentication (2FA). This extra step (usually a code sent to your phone) adds a strong layer of protection even if your password is compromised.
• Think before you click. Don't open links or attachments from unknown senders. Hover over links to see where they lead.
• Check for secure connections. Look for "https://" and a padlock icon in your browser before entering sensitive data.
• Install a reputable anti-virus program. Reliable security software detects threats and blocks harmful downloads. Keep it up to date.
• Keep your devices up to date. Software updates often patch vulnerabilities exploited by attackers.
• Avoid oversharing online. Personal details like your birthday, school, or even your pet's name can be used to guess passwords or account security questions.
• Verify suspicious messages independently. If a message asks for payment, login details, or urgent action, go directly to the company's official website or phone line to confirm.
• Monitor your financial accounts. Check bank activity and credit card statements regularly. Report anything unusual immediately.
• Educate yourself and your loved ones. Awareness is one of the most powerful tools against online fraud.

What to do if you become a victim of internet fraud

If you've been targeted by cyber-enabled crime or fraud, acting quickly is crucial. Taking immediate steps can reduce damage and help with recovery.

1. Secure your online accounts

Start by locking down your digital accounts, especially those connected to finances or personal data:

• Change passwords for all affected services.
• Enable 2FA on all critical accounts.
• Log out from all devices and review login activity.

2. Report internet fraud

Reporting what happened helps you recover and prevents others from falling victim to the same scam. Report to:

• Federal Trade Commission (FTC): reportfraud.ftc.gov
• Internet Crime Complaint Center (IC3): ic3.gov
• Your bank or credit card provider. Dispute unauthorized charges and ask about reimbursement or account freezes.
• Credit bureaus. Request a fraud alert or credit freeze.
• Local police. Especially in cases involving large sums or identity theft

When reporting, gather all available details: screenshots, emails, transaction records, and contact information used by the scammer.

3. Monitor and recover

Recovery isn't always immediate, but there are concrete steps you can take to regain control:

• Check your credit report for unfamiliar accounts or inquiries.
• Notify your bank of unauthorized charges.
• If identity theft occurred, consider placing a credit freeze with all three major bureaus (Experian, Equifax, TransUnion).

Most financial institutions have dedicated fraud departments, and a reliable identity theft protection service will provide online fraud coverage to help you recover.