An advance-fee scam is a form of fraud and is one of the most common types of confidence tricks. The scam typically involves promising the victim a significant share of a large sum of money, in return for a small up-front payment, which the fraudster claims will be used to obtain the large sum. If a victim makes the payment, the fraudster either invents a series of further fees for the victim to pay or simply disappears.
A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, this type of scheme misleads investors by either falsely suggesting that profits are derived from legitimate business activities, or by exaggerating the extent and profitability of the legitimate business activities, leveraging new investments to fabricate or supplement these profits. A Ponzi scheme can maintain the illusion of a sustainable business as long as investors continue to contribute new funds, and as long as most of the investors do not demand full repayment or lose faith in the non-existent assets they are purported to own.
A scam, or a confidence trick, is an attempt to defraud a person or group after first gaining their trust. Confidence tricks exploit victims using a combination of the victim's credulity, naïveté, compassion, vanity, confidence, irresponsibility, and greed. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators at the expense of their victims ". Some people consider a pyramid scheme to be a type of scam.
Pump and dump (P&D) is a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements (pump), in order to sell the cheaply purchased stock at a higher price (dump). Once the operators of the scheme "dump" (sell) their overvalued shares, the price falls and investors lose their money. This is most common with small-cap cryptocurrencies and very small corporations/companies, i.e. "microcaps".
Bank fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution. In many instances, bank fraud is a criminal offence.
A binary option is a financial exotic option in which the payoff is either some fixed monetary amount or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The former pays some fixed amount of cash if the option expires in-the-money while the latter pays the value of the underlying security. They are also called all-or-nothing options, digital options, and fixed return options (FROs).
Internet fraud is a type of cybercrime fraud or deception which makes use of the Internet and could involve hiding of information or providing incorrect information for the purpose of tricking victims out of money, property, and inheritance. Internet fraud is not considered a single, distinctive crime but covers a range of illegal and illicit actions that are committed in cyberspace. It is, however, differentiated from theft since, in this case, the victim voluntarily and knowingly provides the information, money or property to the perpetrator. It is also distinguished by the way it involves temporally and spatially separated offenders.
Email fraud is intentional deception for either personal gain or to damage another individual using email as the vehicle. Almost as soon as email became widely used, it began to be used as a means to defraud people, just as telephony and paper mail were used by previous generations.
In business, the term boiler room refers to an outbound call center selling questionable investments by telephone. It usually refers to a room where salespeople work using unfair, dishonest sales tactics, sometimes selling penny stocks or private placements or committing outright stock fraud. A common boiler room tactic is the use of falsified and bolstered information in combination with verified company-released information. The term is pejorative: it is often used to imply high-pressure sales tactics and, sometimes, poor working conditions.
A romance scam is a confidence trick involving feigning romantic intentions towards a victim, gaining the victim's affection, and then using that goodwill to get the victim to send money to the scammer under false pretenses or to commit fraud against the victim. Fraudulent acts may involve access to the victim's money, bank accounts, credit cards, passports, e-mail accounts, or national identification numbers; or forcing the victims to commit financial fraud on their behalf.
Voice phishing, or vishing, is the use of telephony to conduct phishing attacks.
Telemarketing fraud is fraudulent selling conducted over the telephone. The term is also used for telephone fraud not involving selling.
The parcel mule scam, also known as the reshipping scam, involves scammers and unsuspecting victims handling goods to other countries. In some ways it is similar to the money mule scam. Scammers use fake advertising to hire mules. Items are bought with stolen cards, and since the goods are typically re-sold once shipped, this scam can be viewed as an indirect form of money laundering.
SpotOption was a privately held platform software provider based in Israel in the controversial binary option industry, which was banned in Israel starting in January 2018. The firm announced that it has left the binary options business and is exploring other possibilities. It had previously announced a downsizing of its operations in Israel and moving many functions to other locations. The firm claimed to have 70 percent share in the market for binary options platforms, and charged binary options firms up to 12.5% of their revenues.
An exit scam, is a confidence trick, con job or fraud, perpetuated under the guise of a legitimate business, that ends when the originator absconds with the funds contributed by participants. When a business entity rug-pulls and stops shipping orders while receiving payment for new orders, it could take some time before it is widely recognized that orders are not shipping. The entity can then make off with the money paid for unshipped orders. Customers who trusted the business do not realize that orders are not being fulfilled until the business has already disappeared. Exit scams are commonly associated with the rise of cryptocurrency projects due to the lack of regulation and decentralized ecosystem.
An initial coin offering (ICO) or initial currency offering is a type of funding using cryptocurrencies. It is often a form of crowdfunding, although a private ICO which does not seek public investment is also possible. In an ICO, a quantity of cryptocurrency is sold in the form of "tokens" ("coins") to speculators or investors, in exchange for legal tender or other cryptocurrencies such as Bitcoin or Ether. The tokens are promoted as future functional units of currency if or when the ICO's funding goal is met and the project successfully launches.
Cryptocurrency and crime describe notable examples of cybercrime related to theft of cryptocurrencies and some methods or security vulnerabilities commonly exploited. Cryptojacking is a form of cybercrime specific to cryptocurrencies that have been used on websites to hijack a victim's resources and use them for hashing and mining cryptocurrency.
SafeMoon LLC was a cryptocurrency and blockchain company created in March 2021. The company created the SafeMoon token (SFM) which traded on the BNB Chain blockchain. The token charged a 10% fee on transactions, with 5% redistributed to token holders and 5% directed to wallets in a different currency, Binance Coin (BNB), controlled by the coin's authors. The token reached its all time high market cap in April 2021 of $17b. As of December 2022, it had dropped 98.7% in value to $223m.
A fraud factory or fraud park is a collection of large fraud organizations usually involved in human trafficking operations, commonly found in Southeast Asia and usually operated by a criminal gang. Fraud factory operators lure foreign nationals to scam hubs, where they are forced into modern slavery, to scam internet users around the world into fraudulently buying cryptocurrencies or withdrawing cash, via social media and online dating apps. Trafficking victims' passports are confiscated, and they are threatened with organ harvesting and forced prostitution if they do not scam sufficiently successfully.
