Five Dot Cons
Internet is established. There are already millions of people
online. They are using the Web to shop, pay bills, do banking,
keep up with the news and the latest in health and entertainment.
There are thousands more entering the online world every day.
The opportunities are endless, but so are the risks. Risks as
in dot con.
Dot con? Dot
fraud schemes hitting Web surfers are not new, con artists have
adapted to the Internet in a variety of increasingly clever ways.
Remember, there were con artists working hard to fool unsuspecting
consumers long before the Internet was invented. Mail and telephone
fraud has been part of modern day life for decades. Internet scams
are just the online versions of the familiar 'sting'.
draw of Internet auction bargains to swindle trusting people into
parting with their money, applying new technology to more traditional
scams, or using email to reach millions around the world with
phony web sites that collect personal information, today's tech
savvy scam artists are just a click away.
Trade Commission keeps track of consumer complaints on fraud -
online and off. These are the top five scams that catch online
EBay, UBid and a collection of other on line auctions give
shoppers access to 'virtual malls' offering an incredible choice
of products at prices far below the retail value. Most sellers
and buyers at online auctions are honest people, but this is a
good playground for online thieves. The problem has gotten so
bad that auctions
bring in roughly 48% of all online fraud complaints reported to
the Federal Trade Commission.
Bargain hunters and collectors go to auctions to look for specific
products. They find exactly what they're looking for and strike
a bargain that is just 'too good to pass up'. Excited at the great
deal they've found, they send off a check. After sending their
money, consumers say they've received an item that is less valuable
than promised - a knock off that was supposed to be a designer
product - a damaged version of the pristine collectable item they
purchased - or in the worse cases, nothing at all.
The Safety Net: Before you bid on any item in an auction,
especially for a collectible or something that is very valuable,
make sure the seller has at least 10 positive reviews. It may
be hard to stay away from what seems like an incredible deal,
but getting scammed at bargain prices is not very much fun either.
If you're the seller, check out the buyer's feedback - fraud works
both ways! This may not be a perfect solution since scammers are
clever. They can 'seed' their reviews with positive feedback to
fool anyone who checks. To be absolutely sure, insist on paying
with a credit card, use an escrow service, or pay through some
other traceable means. The harder you make it for online auction
crooks, the better online auctions will be for honest business.
Web sites that pretend to be your bank, credit card company, investment
broker or offer access to services you want... "Surf the
Internet and view adult images online for free" just enter
your credit card number to prove you're over 18 or to "verify"
your info to the bank!
The Catch: Consumers say that fraudulent promoters have
used their credit card numbers to run up charges on their cards.
They can take the information that you provide and empty your
accounts. Even worse, the ones that ask for additional personal
information are a prime source of identity theft.
The Safety Net: Share credit card information only when
buying from a company you trust or at your regular login page
for your credit card or bank! Always dispute unauthorized charges
on your credit card bill by complaining to the bank that issued
the card. Federal law limits your liability to $50 in charges
if your card is misused... if you report it. Even if you find
a charge of a dollar - report it. Many crooks initially use a
small amount to identify active accounts. A one dollar charge
may be a signal that criminals have figured out your bank or credit
card account number!
Easy money! You can make money through the products and services
you sell and even more from recruiting friends into the program.
The Catch: Some pyramids are legitimate business structures,
but many multi-level marketing programs are actually illegal pyramid
schemes. A few people on top collect money while
millions at the bottom have no way to recoup what it cost them
to join. Many consumers say that they've bought into plans and
programs, but their customers wind up being other distributors,
not the general public. When products or services are sold only
to distributors like yourself, there's no way to make money.
The Safety Net: Even on the Internet, there is no way to become
a millionaire overnight or make a fortune without any effort.
Avoid plans that focus on recruiting others instead of promoting
your product. If a business opportunity requires you to recruit
distributors, buy expensive inventory or commit to a minimum sales
volume, chances are you're going to lose money on the deal.
Financial freedom and security. Promises that you can your
own boss and earn big bucks - often with no need to work!
The Catch: Like most promises of immense profits with little
work these work at home business opportunities are often more
wishful thinking than reality. Many consumers eventually discover
there's no evidence to back up the earnings claims. These schemes
often involve making handicrafts, stuffing envelopes, typing or
medical billing. The handicraft making or envelope stuffing scam
backfires when, after paying fees and completing the assembly
of the products, victims are told their work is too shoddy and
the work is not qualified for payment. In the medical billing
scam, you will be required to purchase supplies and lists of doctors
who inevitably don't exist or are not interested.
The Safety Net: Network! Get the names of other people
who started businesses through the same company and see what they
have to say. Make sure you contact people besides those who are
writing the glowing recommendations you see on the Web site. Keep
in mind that this is a business opportunity and should be entered
into with the proper scrutiny. Get all the promises in writing,
and study the proposed contract carefully before signing. You
may want to get a legal opinion to make sure you are not getting
You get an email with a good tip. You're given information about
buying a stock that has had a recent dramatic price increase (the
alarms bells should immediately go off here). You purchase the
stock certificates for a nice amount and wait to collect your
fortune. In the meantime, the scammers wait until they have collected
plenty of speculator's investments, sell off their stocks and
skim the profits. The eager investors are left with worthless
paper or nearly worthless stock certificates after the price falls.
The Catch: Big profits always mean big risk. "Let
the buyer beware" was a catch phrase in ancient Rome and
is still true today, especially with unscrupulous online traders
preying on the unwary.
The Safety Net: Check out the promoter with state and federal
securities and commodities regulators, and talk to other people
who invested through the program to find out what level of risk
you're assuming. If
you get any advice on any kind of investment in a spam email -
treat it as the junk mail that it is! Anyone with an insider tip
that will make them a fortune is not going to share it with millions
of strangers through an email campaign.
Can you keep out of the traps that Internet con artists set to
scam you? Not always. But careful research, and a healthy amount
of common sense - always pays. Treat offers that come from online
sources the same as you would any other information. If someone
came knocking on your door asking for personal information, you'd
ask who they were and why they needed it... and how they found
you. Asking the same questions online tends to keep you safe.
More Web resources
to Internet Scams: