NFIB

Internet Scams Can Cost You Money, Not Make It
04/ 15/ 2002

Many people with enterprising spirits would love to use their computers to make a living. This natural inclination can produce rewards when accompanied by careful planning in the choice of career, but too many eager e-workers fall prey to internet scams that end up costing them money. In today's Workshop, Jeffrey Moses lists some of the more common scams to watch out for.

Working-at-home scams: These promise to show you how to make money using your computer, or through other tasks such as stuffing or addressing envelopes, or assembling products. Almost without exception, these promises vanish when a would-be entrepreneur discovers that a fee is involved for "learning materials" and that no companies are interested in paying you money for your computer efforts, stuffing envelopes or assembling products.

Bulk e-mail brokers. These companies claim that you can make a fortune by sending ads for your products to thousands of e-mails. While it's true that they can supply you with large numbers of e-mails, these companies don't tell you that many of the e-mail addresses are no longer valid -- and that almost every person you do end up reaching will view your e-mail as spam. In addition, sending bulk e-mails is very likely in violation of the agreement you signed with your Internet Service Provider, and may be against the law in your state. There are, of course, legitimate mailing-service companies that provide up-to-date bulk e-mail addresses. But in any case sending large numbers of e-mails may be against the law, and probably will be looked at unfavorably both by your Internet Service Provider and the ultimate recipients.

Get-something-for-nothing scams. These promise to send you free items such as TVs, VCRs, or computer equipment just by becoming a member of a "club" or "financial organization." After the fee is paid, however, members quickly learn that they need to perform certain activities to be eligible for the free gifts. These activities usually include recruiting a specific number of other new members.

Easy-term credit cards. These scams offer guaranteed credit cards, even for people with poor credit ratings. All a person has to do is send in a small up-front "fee." The cards never arrive, of course.

E-chain letters. These are almost identical to the old chain-letter scams, in which a person is supposed to put $5 in an envelope and send it to the person at the top of the list. Supposedly, your name then moves up the list, with the promise that soon you'll receive tens of thousands of $5-bills in the mail. The reality is, you never do -- and the scheme is illegal.

It seems that every day new scams are born. They often target the elderly or those with poor credit who are desperate for a credit card. But far too often even working-age individuals with good credit ratings get pulled in. The real crime is that many of these individuals are too embarrassed to report the crime.

There is one way to completely avoid such scams, no matter how convincing they sound: Never give out personal financial information on the web unless purchasing items from a reliable company with a secure site. Personal financial information includes: credit card numbers/expiration dates, checking or saving account numbers, and passwords of any kind. Also, never send money via check or credit card to organizations with which you're not completely familiar.

The National Fraud Information Center Hotline is 800-876-7060. The Council of Better Business Bureaus publishes numerous pamphlets that can help you spot a scam. The Council, headquartered in Arlington, VA, can be reached at (703) 276-0100.

Small Business Sound Off
Does this story hit home?  Share your story with us