Cyber crime first appeared shortly after the first online businesses appeared, and ever since the bad guys have been hard to keep up with. Many of these crimes come under the purview of the FBI. Below is a list of some of the more common types of Internet scams and frauds, as well as some tips that the FBI provides to help thwart Internet crooks.
- Ponzi Schemes – Named after Charles Ponzi, who ran numerous swindles throughout much of his life, “investors” are promised much greater returns than are available through normal investment channels. However, these returns don’t come from investments, but from other investors, and the schemes usually end up with the swindler in the wind with all the money. Ponzi ended up spending years in jail, and eventually died in the charity ward of a South American hospital.
- Internet Auction Fraud – Knowledge is the best ally in defeating Internet auction frauds, especially if the only contact with an auction site is an e-mail address. Find out what responsibility is shouldered by the auction site.
- Investment Fraud – The FBI says do your homework; don’t judge an investment site by how flashy that site appears. Check other online sources to see if there is any information about the company you might do business with.
- “419” or Nigerian Letter – Victims are recruited via e-mail to send money to help self-proclaimed Nigerian officials illegally transfer money out of the country, however, the money doesn’t exist, and victims are further abused when their personal information is used against them. These schemes also violate section 419 of the Nigerian penal code.
- Credit Card Scam – Look hard at any unsolicited e-mails that request personal information, and be sure to deal only with reputable companies.
- Identity Theft – Always be wary any time personal or banking information is solicited, for whatever reason.
- Pyramid Schemes – Similar to Ponzi schemes, pyramids have investors themselves unwittingly recruiting additional victims
- Business Fraud – There are many “companies” that are nothing more than e-mail drops, so caution should be exercised before doing business online. Among the tips the FBI has for avoiding trouble would be to contact the BBB (Better Business Bureau) to check on a company, and to be wary of any business that uses a “free” e-mail site.
- Merchandise Not Delivered – The FBI warns that anyone shopping online should make sure there is a physical address for the company, and then call the telephone number to ensure that the number is correct and working.
- Counterfeit Prescription Drugs – Senior citizens are the most frequent victims of counterfeit drug scams; the FBI cautions that legitimate online providers will be registered with the Association of Boards of Pharmacy and will have a seal of approval called the Verified Internet Pharmacy Practice Site (VIPPS).
The keys to doing safe online business are to check out the companies, and never give out personal information until you are certain that you are dealing with a legitimate business concern.