According to a report by Kaspersky Lab, Indonesia leads in online financial fraud among several surveyed countries, with a significant portion of consumers having fallen victim to some form of scam​ (Indonesia Investments)​. As we step into 2024, innovations such as AI and deepfakes have given scammers new tools to create more convincing lies and deceptions, making it crucial for individuals to stay informed and vigilant​ (Yahoo Finance)​! 

Financial Online Scams to Watch Out For This Year

1. Marketplace Scams

Marketplace scams are a growing concern on e-commerce platforms in Indonesia, such as Shopee, Tokopedia, and Bukalapak. These scams exploit the vast reach and anonymity provided by the internet, allowing scammers to pose as sellers without the intention of delivering the goods or services advertised. This form of scam particularly preys on the trust and eagerness of buyers looking for good deals online.

• Payment Outside the Protected System: Scammers may ask buyers to make payments through direct bank transfers or other unsecured methods instead of the platform's secured payment system. They promise lower prices or faster delivery to tempt buyers into complying. Once the payment is made, the scammer either disappears or provides invalid tracking numbers.

• Selling Non-Existent Products: Scammers set up fake listings for high-demand items at attractive prices. Once an order is placed, they might stall with excuses until they can withdraw the funds received, after which they vanish. 

• Counterfeit Goods: Sellers may advertise branded items at significantly reduced prices but deliver counterfeit products. 

• Use Secured Payment Methods through The Marketplace: These systems are designed to protect your money until you confirm receipt of the correct item.

• Check Seller Ratings and Reviews: Before making a purchase, review the seller’s ratings and customer feedback. 

• Be Skeptical of Too-Good-to-Be-True Offers: Extreme discounts on high-demand items may be a lure to attract unsuspecting buyers.

Report Suspicious Activity: If you encounter a scam or attempted fraud, report it immediately to the platform. Most marketplaces have mechanisms in place to handle such reports and can take action to prevent further scams.

2. Cryptocurrency Scams

This scam has emerged as one of the most sophisticated and damaging financial threats, especially as digital currencies gain popularity. These scams exploit the complexity and novelty of blockchain technology, which many everyday users find difficult to understand. The allure of quick wealth through digital currencies has led to a significant rise in these scams.

Common Types:

• Fake ICOs (Initial Coin Offerings): Scammers create fictitious projects promising revolutionary technology or breakthrough financial returns. They lure investors to buy into these projects during the initial offering phase, only to disappear once they collect enough funds. These projects often have well-designed websites and white papers that are hard to distinguish from legitimate startups.

• Ponzi and Pyramid Schemes: These schemes promise high returns from cryptocurrency investments and rely on new investors' money to pay earlier investors. Once new investments stop, the scheme collapses, leaving later investors with significant losses.

• Phishing Attacks: Fraudsters use phishing emails or fake websites to trick victims into divulging their wallet keys or login credentials. They often send urgent security alerts, convincing users to enter their details on platforms that mimic legitimate exchanges or wallet providers. 

How to Protect Yourself:

• Research Thoroughly: Always investigate the credentials of any crypto project. Check reviews, the experience of the team behind the project, and any legal documentation.

• Secure Your Wallet: Use wallets from reputable sources and never share your private keys or seed phrases with anyone.

• Be Skeptical of Unrealistic Promises: If an investment seems too good to be true, it probably is! High returns with little or no risk are a classic sign of a scam.

3. Employment Scams

Employment scams have become increasingly prevalent today, where fluctuations in job markets and high unemployment rates create fertile ground for fraudsters. These scams typically manifest as job offers that seem too good to be true, exploiting the desperation of job seekers.

Employment scams often begin with job listings or outreach that promise high salaries, minimal work hours, or other unusually favorable conditions without the need for specific qualifications or experience. These offers can appear on legitimate job search websites, through unsolicited emails, or even via direct messages on social media platforms.

The scam unfolds in several ways:

• Payment for Training or Equipment: The scammer claims that the job requires special training or equipment, for which the applicant must pay upfront. Often, the promised equipment never arrives, and the training is non-existent.

• Request for Personal Information: Under the pretext of job applications or contracts, scammers ask for sensitive personal information such as social security numbers, bank account details, or identity documents, which can then be used for identity theft.

• Fake Job Interviews: Using video call applications, scammers conduct fake interviews to seem legitimate, after which they request money to "finalize" the hiring process or ask for bank details to set up direct deposit for the supposed salary.

One prevalent scam reported in Indonesia involved a bogus recruitment agency that advertised high-paying jobs abroad. Job seekers were required to pay a substantial fee for visa processing and travel arrangements. After the payments were made, the agency would disappear, leaving the candidates with neither jobs nor their money​ (Bolster AI)​. Another common scam involves fictitious work-from-home opportunities where applicants are asked to purchase a “starter kit” or pay for software licenses supposedly necessary for the job.

How to Protect Yourself:

• Verify the Employer: Research the company offering the job. Check their official website and contact them through official channels to confirm the job offer.

• Be Skeptical of Upfront Costs: Legitimate employers will not ask you to pay for the chance to work. Any job asking for money for training, background checks, or equipment should be considered a potential scam.

• Guard Your Personal Information: Do not provide personal or financial information over the phone or online until you have verified the legitimacy.

• Use Reliable Job Platforms: While scammers can appear on any platform, using reputable job search websites and checking their scam advisories can reduce the risk.

4. Grandparent Scams

Although commonly referred to as "Grandparent Scams," this type of fraud doesn't exclusively target the elderly. Here in Indonesia, we’ve heard various cases of this scheme among us. 

How It Works:

Imagine receiving an urgent phone call or message: there's someone claiming to be a family member—maybe they say they're your nephew, niece, or even a cousin. They sound distressed. Perhaps they tell you they've been in a car accident, are in trouble with the law, or are facing an emergency medical situation in another city or country. They need money immediately. Sounds familiar? This scenario is the classic setup for a Grandparent Scam. The name derives from its early instances, where older individuals, perceived as more trusting and less tech-savvy, were the primary victims. However, in today's digital age, no one is immune.

Why It's Effective:

This scam exploits basic human emotions—fear, love, and the instinct to help loved ones in need. Scammers are adept at mimicking voices or using personal information from social media to make their pleas sound authentic. The urgency they convey pressures the victim to act quickly, often without time to verify the story.

Protection Strategies:

• Verify the Caller: Always take a moment to verify the identity of the caller. Hang up and call back on a known phone number for your family member or friend.

• Resist Urgency: Scammers rely on their ability to make you act quickly. Resist this pressure by taking time to think and consult with other family members.

• Privacy Settings: Be cautious about the amount of personal information shared on social media, as scammers often use this data to enhance credibility.

5. Romance Scams

Romance scams are a particularly insidious fraud that leverage emotional connections to extort money from victims. These scams are carried out by creating fake profiles on dating platforms or social media sites. The scammers cultivate relationships with their targets, build trust over time, and ultimately request money under various pretenses.

How Romance Scams Unfold:

The scam begins with a compelling fake profile. Scammers often use attractive photos stolen from the internet and create detailed backstories and identities. They might claim to be working overseas, serving in the military, or involved in complex business projects to explain prolonged absences or the inability to meet in person.

After establishing a connection, the scammer will gradually deepen the relationship through regular communication. The emotional bond makes the victim more susceptible to requests for financial help. Common excuses include medical emergencies, travel expenses to visit the victim, or financial troubles that are presented as temporary hurdles to their happiness together.

A syndicate operating from Batam island was involved in widespread online romance scams targeting individuals across Southeast Asia. The group created multiple fake profiles to manipulate victims into believing they were in genuine relationships. Victims were persuaded to send significant sums of money to help their supposed partners overcome fabricated financial crises or legal issues​ (The Diplomat)​.

Prevention and Protection:

• Profile Verification: Be cautious of profiles that seem too perfect. Scammers often have few connections on their social media and their photos can look overly staged. Most of them have no tagged photos as well.

• Slow Down: Take your time to get to know the person and their background. Be wary of anyone who escalates the relationship unusually quickly.

• Never Send Money: No matter the story, never send money to someone you have only met online. Scammers are skilled at creating compelling reasons for needing money, but this is the most telling sign of a scam.

• Consult with Friends or Family: They can offer a fresh perspective and may identify red flags that you have overlooked.

References:

https://www.cnbc.com/2024/01/18/5-financial-scams-to-watch-out-for-in-2024.html

https://thediplomat.com/2023/08/indonesia-arrests-88-chinese-nationals-over-online-romance-scams/

https://finance.yahoo.com/news/5-financial-scams-avoid-2024-202024398.html

https://www.indonesia-investments.com/news/todays-headlines/online-scams-in-indonesia-26-of-consumers-become-victim-of-fraud/item6871