How To Avoid Online Fraud: Tips To Protect Your Money

You can avoid online fraud by controlling the links you click, paying attention to where you enter your personal details and choosing the right network to access internet transactions. If you’re a victim of online fraud, your credit card number may be compromised, your money may be moved with little to no recourse, or someone may open false credit accounts in your name.  

If you experience online fraud, contact your card issuer to stop all transactions, request a credit freeze, and visit Identitytheft.gov to limit fallout and damage.    

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms and fees from different lenders and choose the best offer for you.

How To Tell if a Website Is Safe To Buy From   

If you’re buying from a new website, make sure your personal details aren’t compromised. Before you decide to click “purchase” for a product or service, at the very least, before entering your personal details, you’ll want to check the domain name, contact information and how payment is accepted.

Here’s a checklist on what you should pay attention to:

• Check the domain name: If the domain name has misspellings, extra hyphens or weird endings, pause and do more research to check if the site is legitimate.  

• Review first-time sellers: Buying from an unfamiliar or first-time seller warrants a search on the BBB Scam Tracker. This site will let you know if other sellers have reported problems.  

• Verify basic details: Find out the seller’s physical address, look up the returns policy and check if there’s a customer service number. If more than one of these items is missing, you probably shouldn’t move forward with the transaction.  

• Watch for suspicious payment methods: If the provider of the service or product accepts only non-traditional payment methods by gift card or cryptocurrency, you may want to consider making your purchase elsewhere.  

• Be wary of too-good-to-be-true prices: If prices are way below other retailers, this may be a red flag that you’re buying a knock-off.  

What HTTPS and the Padlock Icon Actually Mean  

A website's HTTPS and padlock icon don’t mean it’s safe. HTTPS only encrypts what travels between your browser and the site. There’s no guarantee that the site is legitimate. HTTPS means your information is private, but a scammer can get a certificate in minutes.  

Encryption scrambles sensitive data like credit card or bank account numbers, but it doesn’t control where your data ends up. If a site doesn't use “https://”, that's a warning sign not to enter sensitive data.  

Other browser warnings that should stop you from entering your information include “Your connection is not private,” “deceptive site ahead” or “not secure” in the address bar.   

How To Spot a Phishing Email  

Phishing is a common type of bank impersonation scam. Before you click on an email, make sure you hover over the link to see where it actually goes before you’re tempted to click. Here are the other things you should check for: 

• Be cautious of urgent requests: If an email asks you to log in and then says, “You’ll be locked out of your account in 24 hours if you fail to log in,” avoid clicking the link.  

• Find the sender’s full name: Click on the complete email address in the sender’s name. You’ll likely spot inconsistencies if it’s a phishing email.  

• Open the site in a new tab: Open the message in another tab to see whether there are problems with your account.  

• Be careful about what you share: Don’t share common details on social media profiles that could answer security questions. Scammers can compromise your account using these details.  

What Smishing Is and How To Recognize a Scam Text  

If scammers have your phone number, they can reach you in other ways. With smishing, scammers send you a text and try to get you to tap, reply or open a specific app. Your goal is not to reply or open the app directly. These texts are disguised as fake bank alerts, DMV notices or toll overdue notices.

Keep in mind that your bank will generally not text you, but if you do receive these texts, forward them to 7726 and then delete the message. You can also report spam messages on your phone to eliminate the same number from contacting you again.

How To Secure Your Home Wi-Fi Network  

Secure your home Wi-Fi network. There are easy ways to take preventive measures:

1. Change the default login: The router will come with a default network name and password. It’s crucial that you change this information. Set a different network name and choose a unique password.  

2. Stay up to date: Keep your router updated to prevent scammers from exploiting security holes. 

3. Put TVs, cameras and speakers on a guest network: Putting these types of devices on a guest network keeps your banking information separate in case of a hack. 

Is Public Wi-Fi Safe for Online Banking? 

Public Wi-Fi isn’t on a secure server and is generally not safe for sensitive transactions involving personal and financial data. If you need to use online banking on an unsecure network, use your cell data, especially if your transactions involve logging in or account numbers.  

To reduce the likelihood of automatically joining an unsecure network, disable auto-join on your phone or computer. You may also want to turn off “connect automatically” on your electronic device to prevent you from signing on to an unsecure network. Sometimes illegitimate sites are set up to look like a secure server, but they’re really used to steal your personal information. 

What a VPN Fixes and What It Doesn't 

A virtual private network (VPN) helps to hide your activity from others. Using a VPN is ideal when you’re using a public network. Understanding how a VPN works can help you use it effectively.  

Where a VPN Works 

• You can disguise your internet protocol (IP) address. 

• You can shield your activity on public Wi-Fi. 

• An internet provider can’t find the sites you visit. 

• If you connect to a scammer’s hotspot, a VPN may protect you from people stealing your information. 

Where a VPN Doesn’t Work   

• It doesn’t protect against phishing scams. 

• It won’t protect you from malware. 

• It’s useless for anything you’ve already shared.  

• If you use a weak password and a hacker retrieves it. 

Credit Card vs. Debit Card for Online Shopping  

A credit card is better for online shopping since the issuer’s money is at risk. Your bank balance never drops. With a debit card, the purchase amount is withdrawn directly from your account.

Here’s a comparison of protections you get from various payment methods: 

How Two-Factor Authentication Stops Account Takeover  

Even if a scammer steals your password, two-factor authentication (2FA) can prevent them from taking over your account. Here’s how to make the most of 2FA:

1. Use unique passwords for every account: Use a password manager to store and generate unique passwords.  

2. Use real-time transaction alerts: Don’t rely on monthly statements — subscribe to alerts that trigger when a transaction occurs. This approach lets you act immediately.  

3. Use an authenticator app: A text code can still be susceptible to a scammer. An authenticator app is more secure.  

How To Spot AI Voice and Video Scams  

To spot AI voice and video scams, hang up and call the number you already have for the individual who’s calling you. This is the easiest way to verify if a call is legitimate. Generally, AI scams use impersonated voices of family and friends to fake emergency calls.  

Your “family members” may say they are “hurt or kidnapped” and make demands for money to be delivered. An agreed-upon family phrase can help you identify whether a call is legitimate or fake.

Other scams may use deep-fake videos of celebrities or high-powered executives to convince you to send money to a fake investment scam.  

Safe Online Shopping Habits That Prevent Fraud  

To prevent online fraud while shopping, buy from vendors/retailers you’ve used before, pay by credit card and set up active transaction alerts. Here are other ways to protect your identity and accounts:  

• Sign out of your online accounts: If you’re logged in, sign out completely instead of just closing the tab. 

• Regularly update your computer: If you’re prompted to update software or your browser, do it right away. You should make the updates in a timely manner.  

• Don’t use autofill: Manually enter your credit card information instead.  

• Buy directly from retailers: Instead of buying through a social media ad, purchase directly from the retailer.  

Read more fraud prevention tips to help keep your money safe.

What To Do if You've Been Scammed Online 

If you’ve been scammed online, contact your card issuer or bank immediately. You want to act fast because the dispute window starts at the transaction date. Here are your next steps:  

• Freeze your credit at all bureaus — Experian, Equifax and TransUnion.  

• Make sure you change your passwords and enable 2FA on any breached accounts. 

• You can report the scam at IdentityTheft.gov. 

Key Terms

• Online fraud: Any scheme that uses the internet, email, texts or fake sites to steal your money, payment details or identity.

• Phishing: A fake email or message that imitates a trusted company to trick you into revealing passwords or financial details.

• Smishing: Phishing sent by text message, often disguised as a bank alert, toll notice or delivery update.

• Two-factor authentication (2FA): A second verification step, such as an authenticator-app code, that blocks account access even if your password is stolen.

• Virtual private network (VPN): A tool that hides your internet protocol (IP) address and encrypts your connection on public Wi-Fi, but doesn't stop phishing or malware.

• Hypertext Transfer Protocol Secure (HTTPS): Encrypts data moving between your browser and a site. It signals privacy, not that the site is legitimate.

• Credit freeze: A no-fee restriction you place with Equifax, Experian and TransUnion that blocks new accounts from being opened in your name.

• Peer-to-peer (P2P) payment: An app transfer, such as Zelle, Venmo or Cash App, that's treated as authorized, leaving little recourse if you send money to a scammer.

Sources

• CFPB: § 1026.12 Special credit card provisions.

• FTC: How to Recognize and Report Spam Text Messages

• FTC: Free Credit Reports

• FTC: IdentityTheft.gov

Parts of this article were created with AI assistance. MoneyLion editors reviewed, fact-checked and edited the final version and are responsible for its accuracy.

Photo credit: welcomia / iStock.com