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Scams, Hoaxes and Prevention

If you have an e-mail address, chances are you have received countless invitations to earn big dollars with minimal effort. Most "big bucks" opportunities presented via e-mail are scams, and scams exist for one purpose: To separate you from your hard-earned cash.

The Internet is crawling with scams. The following list represents the top categories of online scams, according to the FTC, with Mr. Modem's suggestions for your personal fiscal defense:

CATEGORY: Medical Treatments and Weight Loss

SUBJECT: "Miracle Cure for (insert disease here)"

THE SCAM: Virtual snake-oil salesmen selling exotic lotions, potions and pills, magnetic or electrical devices, anti-bioterrorism products, the ability to "burn fat while you sleep," and newly discovered therapies (domestic and European) for serious and chronic diseases.

YOUR DEFENSE: Common sense: If an important medical breakthrough really occurred, would the news be announced by spam-o-gram? To learn whether the FDA has issued a warning against a drug-selling Web site, see Buying Medicines and Medical Products Online.

CATEGORY: Work at Home Opportunities

SUBJECT: Example: "Earn Six-Figures Sending out Medical Bills"

THE SCAM: You're informed of a "crisis" in the health care industry due to the overwhelming task of processing claims, billing, and medical records. You, you lucky thing, are invited to invest several thousand dollars for a pre-packaged business start-up kit to cash in on the "huge demand" for work-at-home processors.

YOUR DEFENSE: Many of these so-called biz-ops are nothing but biz-flops. Don't invest a dime in a business opportunity of this type. Consult an attorney, accountant, or other business advisor before signing any agreement or investing any money.

CATEGORY: Multilevel Marketing Plans

SUBJECT: "Get a Great Job in a Fast-Growing Company"

THE SCAM: You make money through the products and services you sell, as well as those sold by people you recruit into the program. In other words, it's a pyramid scheme with products.

YOUR DEFENSE: Avoid plans that require you to recruit other distributors, buy expensive inventory, or pay a fee to participate in an "incredible opportunity."

CATEGORY: Advance-Fee Fraud

SUBJECT: "Confidential Business Proposal"

THE SCAM: Variations of this type of scam have been around for more than a decade. In one version, you receive an email from an "official" of a foreign government who wants to use your bank account to deposit up to $60 million that needs to be hustled out of his country due to a political coup or other phony reason. For your trouble, you will receive a generous portion of the millions. If you agree to assist, you will receive a series of demands for various fees, bribes, and other payments to keep the venture afloat.

YOUR DEFENSE: Don't let the promise of an "inside" deal tempt you for even a split second. Yes, you're special, but not so special that anybody is going to contact you to share their fortune with you. As ludicrous as this scam sounds, millions of people have been victimized by it, losing an average of $3800 each, according to the FTC. To view examples of this scam, read my Nigerian "Advance Fee" Scam article in this library.

CATEGORY: Internet Auction Fraud

SUBJECT: "Free Shipping with Cash Payments"

THE SCAM: You mail or wire the cash, but the merchandise never arrives, or the item that you do receive is damaged or less valuable than what was described.

YOUR DEFENSE: Never, ever pay in cash. For items under $200 -- the amount eBay covers in its Fraud Protection Program -- use a credit card or an online payment service such as PayPal. For more expensive items or if you have any suspicions, listen to that little inner voice of yours and demand that an escrow service, such as be used to handle the transaction. Caution: 46% of the complaints filed with the Internet Fraud Complaint Center involve Online Auctions.

CATEGORY: Identity Theft

SUBJECT: "Urgent! Your Account Needs to be Updated"

THE SCAM: You receive a "high priority" e-mail that appears to be from your ISP or other online service, informing you that the credit card you provided to establish your account has been declined or has expired and the information needs to be reentered to keep your account active.

YOUR DEFENSE: Don't respond without independently checking with the entity involved by initiating the contact yourself. Legitimate organizations do not ask for information of this type by e-mail. Additional information is available through the Federal Trade Commission.

For more than 25 tips to protect yourself from Identity Theft, read my Identity Theft article in this library.

Enjoying this article? Then why not subscribe to Mr. Modem's Weekly Newsletter ( today! Computer tips, tricks, virus alerts, hoax information, plus prompt, personal responses to your computer questions!

CATEGORY: Credit Card Fraud

SUBJECT: "View XXX Pictures for Free"

THE SCAM: Sure, it's free, as long as you provide your credit card number to "prove" that you are over the age of 18. Fraudulent promoters then run up charges on the card. Most frequent victim: 16-year old boys with Mom or Dad's credit card.

YOUR DEFENSE: Remind your children and grandchildren that there is no such thing as a free lunch. If you provide a credit card number, be prepared to have your card charged immediately, promises to the contrary notwithstanding.

CATEGORY: International Modem Dialing

SUBJECT: "See Steamy Pictures -- Absolutely Free!"

THE SCAM: Scammers know boys will be idiots if there's even the slightest promise that there's skin involved, so here the offer is a simple download to retrieve a free viewer or dialer program. Once the program is installed, it disconnects your Internet connection and reconnects to an international long-distance 900-type phone number in Guyana, Chad, or Madagascar, at rates as high as $7/minute.

YOUR DEFENSE: If you see a pop-up window, read the information before clicking OK. Better yet, click Cancel. Should the modem start redialing, cancel the connection and restart your computer. For an extra measure of self-defense, ask your local phone company to place an "international block" on the line.

CATEGORY: Web Cramming

SUBJECT: "Custom Designed Web Site for 30 Days - FREE!"

THE SCAM: You're promised a free Web site for a trial period, with no obligation to continue. When you cancel after the 30 days -- if your site gets designed at all -- you are charged, with the fees appearing on your telephone bill.

YOUR DEFENSE: If you receive bills for services you didn't order, don't pay. The law allows you to treat unordered services as a gift. Review your telephone bills every month and challenge any charges you don't recognize.

CATEGORY: Bulk E-mail

SUBJECT: "Reach Millions of New Customers by E-mail."

THE SCAM: These scams pedal bulk e-mail lists with millions of addresses and software, but they fail to mention that if you use the software, your ISP may cancel your service. Sending unsolicited commercial e-mail (spam) violates not only the terms of service of most ISPs, but also several state laws.

YOUR DEFENSE: Invest in legitimate marketing methods and take the no-spam pledge. Spam is offensive. You will do more harm and damage to your reputation if you engage in spam. Don't be part of the problem, be part of the solution.

CATEGORY: Domain Registration

SUBJECT: "Reserve Your Domain Now!"

THE SCAM: For a fee, you are offered the opportunity to pre-register domain names in the new top-level domain (.aero, .biz, .coop, etc.)

In another version of this scam, you receive an e-mail from the bogus "Internet Registration Committee," saying that your Web site has not been properly registered and you must pay a fee to have it registered. A shakedown by any other name is still a shakedown.

YOUR DEFENSE: Whenever the new domains become available, they are assigned on a first-com, first-served basis, so there is no guarantee your reservation will be worth anything. Ignore unsolicited e-mail from companies that promise preferential treatment in the assignment of new top-level domain names. Check Network Solutions to get the latest updates on the assigning process and to find out what you really need to do in order to secure a domain name.

Five Tips To Protect Against Online Scams

1. Avoid doing business with any entity that fails to display its name, address, phone number, and other contact information on its Web site.

2. Don't respond to e-mail from people or organizations you don't know, and don't give out your personal information: Social Security number, mother's maiden name, financial account numbers, passwords, or other identifying information -- unless you have initiated the contact and determine that the person or organization is entitled to your information, e.g., your bank, broker or physician.

3. Check a company's track record through the Better Business Bureau, your state Attorney General's office or Consumer Protection Agency, and "complaint sites" such as or

4. If you do get scammed, flim-flammed, bamboozled or duped, report it to your state Attorney General immediately, and file a complaint with the FTC, toll-free at 877-382-4357, or use the FTC's$.startup?Z_ORG_CODE=PU01 Online Complaint Form.

5. The best defense possible is your good, common sense: An offer that makes an outrageous claim such as promising a large return on investment, a cure for an incurable disease, etc., should be ignored along with "Special Internet Offers" or "Limited Time" offers that promise a discount if you order today. Remember the old adage, "If it sounds to good to be true, it probably is."

Additional Resources:

Better Business Bureau Online

Computer Fraud, Scams, and Identity Theft

Federal Trade Commission (FTC)

How to Report Internet Fraud

Internet Crime Complaint Center

Internet ScamBusters

National Fraud Information Center

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