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Last Updated: Dec 21st, 2004 - 22:04:52 |
Although the Internet provides many benefits and opportunities, there is also a dark side to this technology. Last year the amount of reported Internet fraud hit $17.8 million. Who knows how much more went unreported. In the cases reported, most people (70%) were first contacted by e-mail.
Here are some ways these scams work.
1. Financial institution fraud - This includes things like credit card fraud and identity theft. The culprit obtains a victim's credit card, bank or other financial information and then proceeds to help himself to the victim's money.
2. Gaming fraud - Just put up your money and you can't lose, but somehow you do. Sports tampering and claiming false bets are two examples of gaming fraud.
3. Investment fraud - Somehow, all these plans involve creating money with no effort through some income-producing vehicle about which only they know. Pyramid schemes and stock market manipulation are two types of investment fraud.
4. Confidence fraud - Most of these scams prey on greed or a desire to get a really great deal. Auction fraud and non-delivery of merchandise are both types of confidence fraud. The Nigerian spam letter is another scam that would be classified under confidence fraud.
What are some things you can do to protect yourself?
1. If you are going to bid in an Internet auction, understand as much as possible about how an auction works. Know the obligations for both the buyer and the seller before you bid. eBay and other online auctions often provide feedback forums. Check the feedback history of the person you are buying from before bidding.
2. Before ordering on line, read the company's policy statement regarding problems and returns. Be sure to find when delivery can be expected and warranty/exchange information for merchandise that you might want to return.
3. Learn as much as possible about the person or company, especially if the only information you have is an e-mail address. Do a web search and look for web sites regarding this person or company. Examine the feedback if any, and use common sense; if the person has a history of negative feedback, do not deal with them.
4. Try to obtain a physical address rather than merely a post office box and a phone number. Also call the seller to see if the number is correct and working. Send them e-mail to see if they have an active e-mail address. Be very cautious of sellers who use free e-mail services such as Yahoo or Hotmail.
5. Pay by credit card. If the product or service does not arrive, or there is a problem, then you can get your financial institution to intervene and void the charge.
6. Check with the Better Business Bureau http://www.bbb.org from the seller's home area to see if there have been any problems with the seller before. If you do have a problem, complain to the BBB so that others may be alerted.
These fraud artists also make it more difficult for our legitimate businesses to operate on the Internet. Scams make consumers wary and cautious about on-line purchases. Ways to reassure your potential on-line customers will be discussed in a future article.
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