Also called "Nigerian letter" scams or "foreign money exchanges," these typically start with an email from someone overseas who claims to be royalty. The fraudsters lure you in by offering a share of a huge investment opportunity or a fortune they can't get out of the country without your help. Then they ask you either for your bank account number so they can transfer the money to you for safekeeping, or for a small advance payment to help cover the expense of transferring the money.
That's when they either take your payment and disappear, or, worse, drain your bank account.
Americans lost $703,000 last year to these types of frauds, according to a new report by ADT Security Services, using data from the Better Business Bureau's Scam Tracker. "As long as these types of scams keep working, people will continue to use them," Anja Solum, ADT project manager, tells CNBC Make It.
Over the past three years, ADT calculated that Nigerian letter-style scams have cost victims an average of $2,133.
The reason these scams are so effective is that they present victims with a "perfect storm of temptations," Dr. Frank McAndrew, a social psychologist and professor at Illinois-based Knox College, tells CNBC Make It.
First, these scams play on people's greed. Many times, the scam is set up in a way where victims are promised that they'll make a hefty financial profit without much effort, McAndrew says. In most successful scams, the fraudsters also prey on your desire to be a hero.
"We get the opportunity to feel good about ourselves by helping another person in need," McAndrew says. "After all, what could be more noble than helping an orphan in need or helping some poor soul recover money that rightfully belongs to them in the the first place?"
The best way not to fall for these is to recognize them for what they are. Experts say these types of emails are typically unexpected and from an unknown sender. Some email providers may even automatically send these to your spam folder.
If this type of email does land in your inbox, though, don't send money or give out your personal information to strangers, no matter how sad the story or enticing the reward.
If you do fall for scams like these, McAndrew adds, don't feel too bad: Remember that lots of other people have made the same mistake. "The scammers are also good at luring us into a relationship before the sting occurs, which simultaneously builds up a sense of trust, which then causes us to almost feel a sense of obligation to provide help to them when the need arises," he says.
Overall, Americans lost over $26 million to scams last year, according to ADT. While the Nigerian prince-style schemes can cost a lot if you fall for them, investment fraud and romance scams are the most expensive for victims.
Investment fraud of all types, including Ponzi and pyramid schemes, committed over the past three years cost victims an average of $8,648, according to ADT. Victims of romance schemes, sometimes referred to as "sweetheart scams," lose an average of $6,003.
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Sweetheart scams are similar to foreign money exchange schemes, but they generally start within online dating websites as opposed to by email. Fraudsters create fake dating profiles and pose as users looking for love. They spend time talking and getting to know their victims. Once there's a level of trust built up, they ask for money and play on victims' emotions.
Many times, these scams target the elderly.
The most popular type of scam Americans report is phishing, which occurs when cyber criminals send fake emails to you that either attempt to retrieve personal information or infect your device with malware.
These types of scams grew by 7% over the past three years, with over 20,000 incidents reported in 2018, according to ADT. Yet despite their popularity, the average amount lost in these types of scams was only about $44 per victim.
The number of health care scams rose in 2018, leading to $290,000 in losses last year. This type of fraud includes schemes that charge you for help getting new insurance, Medicare fraud and fake medical discount programs.
Moving scams, where people put down a deposit and the movers never show up, were also on the rise in 2018. Moving scams caused over $600,000 in losses in 2018 alone, ADT reports.
While Solum says there's no guarantee that these types of scams will remain popular in 2019, consumers should stay alert. "Scammers are constantly seeking opportunities to find vulnerable victims," Solum says. "The recent changes in Obamacare and health care coverage, for example, has led to a constant air of confusion, allowing health care scams to thrive."
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