5 Types of Financial Frauds That Cost People a Lot of Money in 2021

Financial crimes and frauds have always haunted us and continue to haunt us even today. With time, these frauds and crimes are also evolving and reaching a stage where it’s getting difficult to identify them, let alone stop them! And the pandemic has just exacerbated the problem by providing criminals and hackers a perfect opportunity to capitalize on the most vulnerable businesses and individuals. Simply put, the prevailing economic fears fueled by the pandemic along with the entry of digital and cashless payments have made businesses and individuals more susceptible to these different types of financial frauds.

Millions of people and dozens of businesses have already fallen prey to these frauds and suffered an immense loss. 2021 has indeed been a year that was dominated by a lot of cyberattacks and financial fraud incidents. Here’s a glimpse of the different types of financial frauds that terrorized people and cost them a lot of money. 

5 Types of financial frauds that gave a headache to all of us in 2021

1. COVID-19 related scams

I am sure each one of us would have at least received a mail, or a call, or even a text message persuading us to contribute to some sort of COVID-19 relief fund. Now, how many of these were genuine, and how many were fake? 

Many have fallen prey to the COVID-19 related financial scams and lost a lot of money. While one type of fraud played with the emotions of people – asking them to support their community while the other type of fraud capitalized on the fear of having to stay prepared. To elaborate, the second type of scam involved convincing people to stay prepared in case of future financial instability. 

That is, these scams basically aimed at promising financial assistance or vaccine access, targeting people with promises of relief, but only after they pay a fee or share their private bank account information. The fear and desperation caused by COVID-19 made even well-educated people fall for such scams.

3. Crypto frauds

Hearing news about a politician’s or a famous personality’s Twitter account getting hacked is no big news these days. Hackers are using the social media accounts of these people to spread rumors about cryptocurrencies, getting people to invest via a link they shared. And by the time they determine that their account is hacked – the damage has already been done. 

A recent example I can think of right now is Narendra Modi’s Twitter account getting hacked with a Bitcoin post. That is, hackers put out a tweet from the PM’s Twitter handle – claiming that India has “officially adopted bitcoin as legal tender” with a link, asking people to “hurry up”. Like these, there are countless incidents where hackers are using cryptocurrency as their pawn to commit financial crimes.

Apart from this, cases of wallet theft and hacking of cryptocurrency exchanges are also increasing these days.

4. ‘Help a friend in need’ scam

2021 has been a year of a lot of these scams – ‘help a friend in need and contribute your bit’ scam. 

This is what usually happens in these types of financial frauds – hackers steal your identity by either hacking your social media accounts, asking for money for whatever reason from your social circle by pretending to be you. Facebook reported a lot of these cases. The increasing number of such cases signals that this fraud method was fraudsters’ favorite. I mean why not, especially when the juice is worth the squeeze? With these types of scams, financial criminals could easily gain 10 times more returns when compared to other fraud typologies. 

5. Job offer scam

Another scam that ruled 2021 is the great job offer scam. The pandemic cost many people their jobs, their lives! There can be nothing more unfortunate than falling prey to the trap of financial criminals who use people’s desperation for a job as an opportunity to make money.

The criminals targeted all the desperate job seekers with a fake job promise that they are sure to get a job with a heavy paycheck. All they have to do is pay some amount that’s usually labeled as a service fee.  

Many people have lost the money they didn’t have in the first place to such scams, thereby putting them in a further financial loss. Some have even lost their lives because of this scam.

Sad but true: These types of financial frauds are only going to increase and get complex with time….are you prepared?

2022 is just around the corner with a new set of challenges that we all need to address. As economic tensions build up, fraudulent incidents will surely see a rise. The key is to stay prepared, alert, and agile at all times. 

Stay prepared, stay safe!

Also read: 5 Tips to Protect Yourself from Financial Fraud

Priyanka Prashob
Priyanka Prashob is an organizational psychologist with 6+ years of experience in the field of Content and Psychology. She is a passionate writer and has authored 2 books. She has designed content for corporate training programs, worked on organizational behavior reports and numerous individual personality assessment reports. Several research articles written by her are published on platforms like Academia and Research Gate. The articles have gained recognition and appreciation from universities, academicians, and researchers across the world.

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