During the late 1970s and early 1980s there were only small communities online. None of these communities were interconnected. Less than one million people were in the “online world.” Now, the Internet connects just about every major online service. There are now over 50 million people online. This gives scammers the ability to easily reach large amounts of people. Another advantage that the Internet offers scammers is the ability to be anonymous. That is, they can communicate with other without fear of being identified. Scammers have found an infinite number of ways, using these benefits, to profit through Internet fraud.
Many Internet scams offer a lure of easy money, which the person can get fast and in large amounts. Victims want to believe they are being given a legitimate offer. The scams are easy to believe and just complex enough that they seem real. Perhaps, people believe anything can happen on the Internet and possibilities are endless. Internet scams are usually the same old scams translated to the Internet. They sometimes seem original, but most likely they have just been dressed up with computer terms. Their victims expect to get something in return for their investment. Usually they expect a large return for a small investment (Banks 175).
Knowledgeable con artists perform some scams. They are doing the same thing they have been doing for years, just on the Internet. Victims of scams may also try to recoup their lost investment by doing the same scam. Although, most are done by people who think they are involved in a legitimate money making enterprise. In reality, they are making money for the con artists that pulled them into the scam. As you can see, anyone from a brilliant con artist to a victim could be a scammer (Banks 164).
Pyramid Schemes are the most common type of scam, both online and offline. These scams are similar to chain letters. The scammer send a message to hundreds of thousands of people asking them to do certain things and promising them a substantial monetary return (Knight
142). Pyramid Schemes are so popular because they can be easily copied, altered, and e-mailed to others. In fact, similar letters have been send via United States Postal Service for decades.
In a Pyramid Scheme, the victim receives a letter that contains names and addresses of five people. The letter instructs the person to send $1 to the first person on the list, remove that name, and add his own name to the end. The victim would then send the letter to ten or more friends. This appears to be a great opportunity. The victim’s name would quickly be at the top of the list of 10,000 letters. One dollar would be received for each letter and that would mean $10,000. However, in Pyramid Schemes, most people do not follow through with these instructions. For this reason, the only people who profit are the first few people on the list (Banks 166).
The most common financial scam seen on the Internet is credit repair. People in debt find these offers to be very attractive. This scam promises to remove negative items from the victim’s credit report, including bankruptcy. Truly, this does not happen. Thousands of people become victims of this scam each year, losing hundreds of dollars (Banks 172).
Another financial scam guarantees the victim a credit card no matter what their credit history or financial status. In return, the victim receives information about credit cards or banks that give credit to poor risks. In fact, this information is available for free. A different credit card scam offers a credit card with a large amount of credit for a fee. For this reason, this offer sounds very appealing. However, when the victim gets the card, he discovers it is only good on overpriced products from a catalog issued by the company (Banks 173).
In Ponzi Schemes, a business owner promises a large monthly return to people who invest in his company. The con artist may collect $25,000 from three investors and promise a return of $5,000 per month. The con artist pays the investors for the first few months from the money collected. He would also be signing new investors. Finally, there would be too many investors to pay and it would collapse. On the Internet, these schemes are often seen as an
investment opportunity for a high-tech company outside the United States. This makes researching difficult (Banks 171).
A scam similar to that of Ponzi Schemes has been posted on Internet bulletin boards. These bulletin boards contain messages from groups of people who share common interests. These are similar to old corkboard bulletin boards found at businesses. Scammers often use online bulletin boards to find victims. A con artist may post a message similar to this one.
“Our company is exploring a spiffy new miracle-fabric here in Chicopee that’s going to replace the wheel. And we’re all really excited about it.”
He would also mention his company’s stock just came out at ten cents a share. Then, his friend (possible the same person using an alias) would post a message.
“?yeah, my brother-in-law knows all about this stuff. Your stock is hotter than a two-dollar pistol on Saturday night over here. It just came out this morning at ten cents”
These messages would generate interest. People would begin to leave messages inquiring about the stock. The con artist would tell these people the stock had risen to $3. Most of the people still bought a bunch, due to the fact it had made such a huge jump in twenty-four hours. The stock would then fall back to ten cents a share. The company and stock never really existed except on paper and in the mind of the scammer. This technique of having multiple people leave messages makes this scam very believable (Knight 144).
Another new scam claims to be doing a survey for a company. The company name used is often a very well known software company. The possible victim is either e-mailed or called by phone. They claim the reason for the survey is to give out free software. The survey contains questions like: “What would be a good time for someone to install the software on your PC?”, “What is you annual income?”, etc. As a result, the victim unknowingly reveals what kind of
computer equipment he has, when he is usually home, and other information. The victim’s home is quickly robbed within a few days (Warning: Computer Scam).
Simply by browsing the Internet, people can be put at risk of having their name and password to their Internet Service Provider revealed. If one were to mistype a web site’s address, such as “http://www.aool.com”, one may have come in contact with an organization called Americaoffline. This organization registers one-letter-misspellings of popular Internet addresses. Americaoffline owns many of these misspelled domain names that is uses for illegitimate reasons. The owner of the misspelled domain names is also able to receive misaddressed e-mail. For example, if the domain was “http://www.aool.com,” then all e-mail sent to [email protected] would be sent to this person. This could reveal all types of information.
Research performed by the Infoworld Test Center’s Security Team showed that this problem is much larger than a few misspelled web sites. After many searches on fake domains, a pattern was revealed. All of the names were registered to Zvielli Fisher. A search for this name showed over 256 one-letter-off domain names. This was brought to the attention of Internic (a company used to register domain names). Admittedly, they explained that they do not get involved unless trademark disputes are an issue (Internet Typos).
The Year 2000 Computer Solution is a relatively new scam. The advertisement is most often sent by e-mail. The seller claims to have found a solution to the Year 2000 computer bug. They offer hardware that comes with a $5,000 guarantee. The company collects their money, then gives a bunch of excuses. They may say delays and enhancements have postponed shipment. In other words, the product is never sent (Year 2000 Computer Scam, The).
Internet cramming is a scam very similar to phone cramming. Charges for Internet services appear of the victim’s credit card bills. People get services they never ordered. Many of the victims do not even own a computer. People do not know what the charges are for. The names of the defendants (N-Bill, Webtel, and Online Billing) suggest an Internet service may be
involved. The charge would often be $19.95, which is a very common charge. It would be difficult for victims to stop the charges. If they could remove them, the charges would reappear the following month. The companies also changed their names, addresses, and phone numbers on a regular basis. Unless a victim looks closely at their statement, they might miss the charge. When victims call their credit card company to complain, the charges are usually described as generic Internet services, adult services on the Internet, or electronic bulletin board services. Because of all these problems, some credit card owners may cancel their credit cards and create new ones to escape the fake charges. The Federal Trade Commission is not sure how the companies obtain the credit card numbers (Internet ‘Cramming’).
Victims have no idea what is going on with this scam. The victim is sent an e-mail saying he has won a prize or threatens debt collection action. The message says to call a phone number. The number appears to be long distance, but it is actually out of the country. The person who answers the phone may put you on hold or pretend not to understand English. When the victim received their telephone bill, they see the call had cost $5 a minute or more. Indeed, the people behind the scam get a large part of this (Banks 173).
Scammers have found an infinite number of ways to profit through Internet fraud. Many of these con artists never get caught. Many people are too embarrassed to report the criminal. Some victims do not get upset with a small loss. Also, the amount conned from one person is usually not enough to interest law enforcement agencies. A group of people taken by the same person must get together to complain.