The Life Cycle of Scams
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As society's technology advances so, too, does the sophistication of scams. Financial scams now often involve multiple steps, unfolding over time across various platforms. Let’s break down how these scams work and what makes them effective, and how customers can protect themselves from falling victim.
Stage 1: Connection
It all starts with the connection. Evolving from the days of cold-calls or blind emails, scammers today know how to draw victims in using social media, text messaging, dating apps, and online marketplaces. Bad actors will create fake profiles that often impersonate celebrities, businesses, and charities to lure in victims.
For example, some fraudsters create fake social media accounts that appear to belong to a legitimate charity cause, using their fake account to solicit charity donations using fake links. Illegitimate profiles can often be hard to spot on social media, which is often why scammers are so successful in trapping victims.
According to Cash App’s most recent data, over 50% of confirmed scams that we investigate originated on a social media platform.
Stage 2: Convincing
Once the bad actors have gotten the attention of a potential victim, scammers move on to convincing victims that their scam is real. They’ll take the conversation to a more private space — like direct messages or messaging apps — where it’s harder to spot fraudulent activity and feels more familiar to the victim.
Scammers use all kinds of tricks to gain a person’s trust. They might create a sense of urgency, pressuring someone to send money quickly, like often seen in impersonation scams; or they might build a slow, convincing narrative, as often seen in romance or investment scams.
Scammers also hop between platforms during the life cycle of the scam, as they attempt to make it harder for the victim to catch on. So scammers could be chatting with a victim on one social media platform, before moving to another, and then end the conversation on a messaging app.
Stage 3: Payment
The last step in the life cycle is the payment itself. After days, weeks, or even months of talking, the scammer will then ask a victim to send them money. Scammers often seek payment via gift cards, wire transfers, peer-to-peer apps, or even prepaid cards.
It is at this stage that financial institutions enter the cycle of the scam, with little insight into payment context. This is one of the main reasons why scams are so tough to detect in time; it’s crucial for banks, social media platforms, and payment products to improve the way in which they interact and communicate in order to help detect fraud earlier.
At Cash App, we leverage machine learning and AI-powered tools designed to protect customers by identifying and suppressing scam posts on social media platforms that interact with Cash App-related conversations. In addition, Cash App benefits from a dedicated fraud investigation team that thoroughly examines specific accounts flagged by either customer reports or our detection tooling.
How to Stay Safe
Scammers are tricky, but there are ways to protect yourself. Be skeptical if someone you don’t know reaches out to you on social media or other platforms. Look out for red flags like too-good-to-be-true offers or urgent requests for money. Most importantly, if something feels off, trust your instinct. As we say at Cash App, “if it’s weird for real, it’s weird for real.”
Understanding how scams unfold — from the connection to the payment — can help you avoid falling victim. Stay vigilant, stay informed, and always pause before you pay or share personal information.
Author
Block
Tags
As society's technology advances so, too, does the sophistication of scams. Financial scams now often involve multiple steps, unfolding over time across various platforms. Let’s break down how these scams work and what makes them effective, and how customers can protect themselves from falling victim.
Stage 1: Connection
It all starts with the connection. Evolving from the days of cold-calls or blind emails, scammers today know how to draw victims in using social media, text messaging, dating apps, and online marketplaces. Bad actors will create fake profiles that often impersonate celebrities, businesses, and charities to lure in victims.
For example, some fraudsters create fake social media accounts that appear to belong to a legitimate charity cause, using their fake account to solicit charity donations using fake links. Illegitimate profiles can often be hard to spot on social media, which is often why scammers are so successful in trapping victims.
According to Cash App’s most recent data, over 50% of confirmed scams that we investigate originated on a social media platform.
Stage 2: Convincing
Once the bad actors have gotten the attention of a potential victim, scammers move on to convincing victims that their scam is real. They’ll take the conversation to a more private space — like direct messages or messaging apps — where it’s harder to spot fraudulent activity and feels more familiar to the victim.
Scammers use all kinds of tricks to gain a person’s trust. They might create a sense of urgency, pressuring someone to send money quickly, like often seen in impersonation scams; or they might build a slow, convincing narrative, as often seen in romance or investment scams.
Scammers also hop between platforms during the life cycle of the scam, as they attempt to make it harder for the victim to catch on. So scammers could be chatting with a victim on one social media platform, before moving to another, and then end the conversation on a messaging app.
Stage 3: Payment
The last step in the life cycle is the payment itself. After days, weeks, or even months of talking, the scammer will then ask a victim to send them money. Scammers often seek payment via gift cards, wire transfers, peer-to-peer apps, or even prepaid cards.
It is at this stage that financial institutions enter the cycle of the scam, with little insight into payment context. This is one of the main reasons why scams are so tough to detect in time; it’s crucial for banks, social media platforms, and payment products to improve the way in which they interact and communicate in order to help detect fraud earlier.
At Cash App, we leverage machine learning and AI-powered tools designed to protect customers by identifying and suppressing scam posts on social media platforms that interact with Cash App-related conversations. In addition, Cash App benefits from a dedicated fraud investigation team that thoroughly examines specific accounts flagged by either customer reports or our detection tooling.
How to Stay Safe
Scammers are tricky, but there are ways to protect yourself. Be skeptical if someone you don’t know reaches out to you on social media or other platforms. Look out for red flags like too-good-to-be-true offers or urgent requests for money. Most importantly, if something feels off, trust your instinct. As we say at Cash App, “if it’s weird for real, it’s weird for real.”
Understanding how scams unfold — from the connection to the payment — can help you avoid falling victim. Stay vigilant, stay informed, and always pause before you pay or share personal information.