How to Protect Your Trading Business from Online Scammers

young female trader at laptop with credit card

The online world provides great financial opportunities for traders. But it’s also a world full of scams and fraud. And new scams are being released daily.

Scammers and fraudsters are plotting to get your personal information, infect your trading computer with viruses or malware, hold your data for ransom, and inflict other harm. Be sure you know how to protect yourself and your trading business from attack.

Here are some tips to help you avoid scams and frauds while navigating the sometimes-dangerous waters of the Internet.

Be Wary of New Websites

In the past, you could look at the content of a scam website and get a feeling that something was not right just by how it looked and sounded.

Nowadays, due to the availability of content management tools, it’s easy to make a legitimate-looking site. (And make it read like real English.) So it takes a bit more effort to make sure that new site you are visiting is legit before you give them money, or even your email address.

Two easy things to check for are encryption and ICANN credentials.

Is It Encrypted?

Google requires all sites to be encrypted in order to get better ranking on its search pages. So legitimate websites will always use encryption. 

A good way to check if a site is encrypted is to check if the site URL starts with https. That’s a sign the site has a Secure Sockets Layer (SSL) certificate.

If you don’t see http in the search bar at all, look for the little padlock icon to the left of the URL. Click on the padlock to get information about the site’s safety.

Also, Norton Secured Seal or McAfee Secure certifications are signs that the site is following good security practices.

What Does ICANN Say?

You can investigate a site’s credentials through ICANN (Internet Corporation for Assigned Names and Numbers). This will give you added clues to whether the site is a legitimate domain or a scam.

Especially check when the site was established. Generally, older sites are more reliable than newer ones.

Learn to Recognize Long-term Scammers

Not all scam sites are designed to make a quick buck. Some are in it for the long game. Some scammers can run a fraudulent website for a long time under the guise of a legitimate business.

If you are considering doing business with an entity that seems to have a valid website, the next step is to check out its business reputation. You could use online review sites to find information on reputation, but scammers often hire fake reviewers to overshadow any negative reviews.

The best option is to contact agencies like the Federal Trade Commission, the Better Business Bureau, your local Chamber of Commerce, or the Consumer Protection Agency to see if there are any hidden skeletons. Specifically, look for reports of bad or broken contracts, or unshipped products.

Check On Policies Before Buying

When you are making an online purchase, be careful about legal dirty tricks. Carefully read the Terms of Service page to make sure there are no hidden clauses that can cause problems down the line. Here are some things you’ll want to check:

  1. Does the business have a no-return policy? This can be standard for businesses offering customized products, so it isn’t always a show-stopper. But in most cases, it should at least raise suspicion.
  2. If prices seem abnormally low, it’s time to investigate. Legitimate businesses can’t survive by undercutting their competitors by large margins. 
  3. Make sure the business is using a well-known delivery service like USPS, UPS, DHL, or FedEx. The company should be able to provide good tracking information for your packages.

Finally, use a credit card to make payments. In case things go wrong, you can always challenge the payment.

Know How to Spot Phishing Emails

Nowadays, phishing emails are a popular way to scam unsuspecting traders. Hopefully, you already know better than to click on a link in an email from an unknown address. But what if the email seems to be coming from a known contact?

Does it seem to be coming from a friend?

Hackers can gain access to the accounts of your known contacts and email you. If an email looks suspicious, don’t reply to it and don’t click the links.

What’s suspicious? Check to see if the name is properly spelled and capitalized, and the grammar is what you expect from that individual. Be concerned if all it says is “Hey, thought you might like this,” followed by a cryptic link.

If you get an email like that, contact the person through other channels (i.e., SMS text or Messenger or phone) and verify.

Does it seem to be from your bank or brokerage?

Phishing scammers will send emails or text messages that look like legitimate business communications. For example, traders might get a call-to-action message that looks like it is coming from their brokerage.

Look closely for signs of authenticity. Does the logo look right or is it fuzzy? Is there a letter missing from the name? Is the grammar and spelling perfect, or is it rife with errors?

If you have any hesitation, you can always call the institution directly to verify. (But don’t use the phone number from the email or the text message.) Alternatively, use other sources like your brokerage’s website to send an inquiry message.

If you’re pretty sure it’s fraud, check the brokerage’s website for their security information page. For example, check out this page on the Fidelity website.

Reputable brokerages, banks, and credit institutions will have an email address on their security page where you can forward suspicious emails. Taking this action will help keep all of us safer.

Stay Alert and Stay Safe

Beyond the above tactics, hackers can use more advanced techniques to attack your trading computer.

But the good news is that most hacks are not that sophisticated. So taking simple precautions can go a long way in avoiding scams and keeping your trading business safe.

There are more trading computer tips like this in our buyer’s guide. Check out our “How To Buy a Trading Computer” e-book.
Remember, we are here to help with all your technology-related questions. If you’re confused about how to upgrade your computer or have other hardware questions, give us a call. My team and I are here to help. We’re happy to answer any of your questions about trading computers via phone: 800-387-5250.

Photo by Bruce Mars on Pexels.