Internet Frauds

Posted by Honey | 6:55 PM | 1 comments »

Internet Fraud : The term "Internet fraud" generally refers to any type of fraud scheme that uses one or more online services - such as chat rooms, e-mail, message boards, or Web sites - to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of fraud to financial institutions or to others connected with the scheme.


Understand how the auction works. Many online auctions simply list items that people want to sell. They don’t verify that the merchandise actually exists or that it is described accurately, and they can’t guaranty that the sellers will keep their promises.
Check out the seller before you bid. Some auction sites have feedback forums with comments about the sellers based on other people’s experiences. Be aware that positive reports may have been “planted” by the seller and negative comments could be from a competitor. Other sources of information are state or local consumer protection agencies and the Better Business Bureau. Negative information is a good warning sign, but a clean complaint record doesn’t guarantee that your transaction will go smoothly.
Be careful if the seller is a private individual. Many consumer protection laws don’t apply to private sales, though government agencies may take action if there are many complaints the same individual or criminal fraud is involved.
Be especially cautious when dealing with sellers in other countries. If you have a problem, the physical distance, difference in legal systems, and other factors could make resolving it very difficult.
Beware of “shills.” The seller may try to raise the price artificially by making bids under fictitious names or recruiting other people to make bids. Using bogus bidders is illegal and a violation of online auction policies.
Get the name and contact information of the seller. The name, physical street address, email address, and phone number are helpful to have for checking the seller out and following up later if there is a problem. Don’t do business with anyone who refuses to provide that information.
Be wary of claims about collectibles and other expensive items. Since you can’t examine the merchandise or have it appraised until after the sale, don’t assume that claims about its condition or value are true, or that photographs are accurate. Print out and save the description and any photos to document the claims that were made.
Ask about delivery, returns, warranties and service before you pay. Get a definite delivery time and insist that the shipment is insured. Ask about the return policy. If you’re buying electronic goods or appliances, find out if there is a warranty and how to get service.
Look for information on the auction site about insurance. Some auction sites provide insurance that covers buyers up to a certain amount if something goes wrong. Others may have links to third-party programs that offer insurance for a fee. Read the terms of the insurance carefully. There is often a deductible, and there be other limitations or requirements that apply. For example, you may not be covered if the seller had a negative feedback rating on the auction site at the time of the transaction.
Pay by credit card. Under federal law, you can dispute the charges if you paid the seller with a credit card and the goods were never delivered or if they were misrepresented. If you are paying through an intermediary service, ask what happens in the case of disputes.
Look for bonded sellers. Some sellers are bonded through programs that have investigated their business backgrounds and credit histories and guaranty your money back if they don’t fulfill their promises. Click on the program symbol to learn how the bonding program works and verify that the seller is a member in good standing.
Consider using an escrow service for expensive purchases that aren’t covered by insurance or bonding. For a small fee, an escrow service takes your payment and forwards it to the seller once you confirm satisfactory delivery. If there is a dispute, the escrow service may act as a referee. Ask if the service is licensed and bonded, and how you can confirm that with the appropriate agency.
Try mediation to resolve disputes. Not all problems are due to fraud. Sometimes people simply fail to hold up their side of the bargain in a timely manner or there may be a misunderstanding about something. Some auction sites provide links to third-party mediation services that help people resolve disputes. There may be a small fee that is usually paid by the party who requests the mediation.
Inform auction sites about suspected fraud. They may have policies to remove sellers from their sites if they use “shills” or don’t live up to their obligations.

Don’t fall for promises that you’ll get a credit card even if you have bad credit. Fraudulent credit card offers often target people who are having credit problems and haven’t been able to get cards elsewhere. They may promise to get you a card, but legitimate credit card issuers generally don’t do business with people who have bad credit histories.
Don’t pay upfront. Legitimate credit card issuers don’t usually ask for a fee upfront. If there is an application or processing fee, it should be very small, not the hundreds of dollars that con artists request. If there is an annual fee, it appears on your first credit card statement.
Be cautious about emails offering to get you a credit card. Many unsolicited emails are fraudulent.
If your credit history is bad, your best bet is to get a “secured” credit card. This requires you to place a deposit in an account at the issuing bank equal to your credit limit. If you don’t pay your credit card bill, the bank will use your deposit to cover it. You may not get interest on the account, but it’s a good way to start rebuilding your credit.
A “gold” or “silver” card may not be what you think. Sometimes fraudulent credit card offers promise “gold” or “silver” cards from major card issuers. What you receive – if you get anything at all – is a gold or silver-colored charge card that can only be used to buy overpriced goods from the company’s own catalogue.
Apply for credit cards directly from the issuers. It isn’t necessary to pay another company to help you get a credit card, nor will it improve your chances of obtaining one.
If you have credit problems, get counseling. Fraudulent credit card companies may also claim that they can repair your bad credit for a large upfront fee. But you can correct inaccurate information in your credit files yourself for free, and no one can erase negative information that is accurate. Your local Consumer Credit Counseling Service (CCCS) can provide advice about how to build a good credit record.

Watch out for “phishy” emails. The most common form of phishing is emails pretending to be from a legitimate retailer, bank, organization, or government agency. The sender asks to “confirm” your personal information for some made-up reason: your account is about to be closed, an order for something has been placed in your name, or your information has been lost because of a computer problem. Another tactic phishers use is to say they’re from the fraud departments of well-known companies and ask to verify your information because they suspect you may be a victim of identity theft! In one case, a phisher claimed to be from a state lottery commission and requested people’s banking information to deposit their “winnings” in their accounts.
Don’t click on links within emails that ask for your personal information. Fraudsters use these links to lure people to phony Web sites that looks just like the real sites of the company, organization, or agency they’re impersonating. If you follow the instructions and enter your personal information on the Web site, you’ll deliver it directly into the hands of identity thieves. To check whether the message is really from the company or agency, call it directly or go to its Web site (use a search engine to find it).
Beware of “pharming.” In this latest version of online ID theft, a virus or malicious program is secretly planted in your computer and hijacks your Web browser. When you type in the address of a legitimate Web site, you’re taken to a fake copy of the site without realizing it. Any personal information you provide at the phony site, such as your password or account number, can be stolen and fraudulently used.
Never enter your personal information in a pop-up screen. Sometimes a phisher will direct you to a real company’s, organization’s, or agency’s Web site, but then an unauthorized pop-up screen created by the scammer will appear, with blanks in which to provide your personal information. If you fill it in, your information will go to the phisher. Legitimate companies, agencies and organizations don’t ask for personal information via pop-up screens. Install pop-up blocking software to help prevent this type of phishing attack.
Protect your computer with spam filters, anti-virus and anti-spyware software, and a firewall, and keep them up to date. A spam filter can help reduce the number of phishing emails you get. Anti-virus software, which scans incoming messages for troublesome files, and anti-spyware software, which looks for programs that have been installed on your computer and track your online activities without your knowledge, can protect you against pharming and other techniques that phishers use. Firewalls prevent hackers and unauthorized communications from entering your computer – which is especially important if you have a broadband connection because your computer is open to the Internet whenever it’s turned on. Look for programs that offer automatic updates and take advantage of free patches that manufacturers offer to fix newly discovered problems. Go to and to learn more about how to keep your computer secure.
Only open email attachments if you’re expecting them and know what they contain. Even if the messages look like they came from people you know, they could be from scammers and contain programs that will steal your personal information.
Know that phishing can also happen by phone. You may get a call from someone pretending to be from a company or government agency, making the same kinds of false claims and asking for your personal information.
If someone contacts you and says you’ve been a victim of fraud, verify the person’s identity before you provide any personal information. Legitimate credit card issuers and other companies may contact you if there is an unusual pattern indicating that someone else might be using one of your accounts. But usually they only ask if you made particular transactions; they don’t request your account number or other personal information. Law enforcement agencies might also contact you if you’ve been the victim of fraud. To be on the safe side, ask for the person’s name, the name of the agency or company, the telephone number, and the address. Get the main number from the phone book, the Internet, or directory assistance, then call to find out if the person is legitimate.
Job seekers should also be careful. Some phishers target people who list themselves on job search sites. Pretending to be potential employers, they ask for your social security number and other personal information. Follow the advice above and verify the person’s identity before providing any personal information.
Be suspicious if someone contacts you unexpectedly and asks for your personal information. It’s hard to tell whether something is legitimate by looking at an email or a Web site, or talking to someone on the phone. But if you’re contacted out of the blue and asked for your personal information, it’s a warning sign that something is “phishy.” Legitimate companies and agencies don’t operate that way.
Act immediately if you’ve been hooked by a phisher. If you provided account numbers, PINS, or passwords to a phisher, notify the companies with whom you have the accounts right away. For information about how to put a “fraud alert” on your files at the credit reporting bureaus and other advice for ID theft victims, contact the Federal Trade Commission’s ID Theft Clearinghouse,

Written by Jimmy Sweeney and Mitch Selleck


  1. Clever Elsie // May 13, 2008 at 10:27 AM  

    This is great advice. Everyone needs to be on their guard. I know two people who became victims of identity theft in the last year alone.

    As for phishing, I simply never open emails from anyone I don't know, and when it comes to online auctions, I only use eBay. I'm not taking any chances.