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FTC reveals top 10 web scams

US trade commission tells all about con artists on the web

The US Federal Trade Commission has spent a year working with five US agencies and 23 consumer protection organisations to compile a list of the top web scams as part of its legal crackdown on internet fraud.

It used thousands of consumer complaints logged in a US database called Consumer Sentinel.

The number one offence was auction fraud – where a consumer pays for goods and services over the internet which they never receive.

Participants in the legal crackdown ‘Operation Top 10 Dot Cons’ include consumer groups from Australia, Canada, Germany the UK and the US. The DTI has announced an information sharing and coordination agreement to combat cross-border fraud.

Some of the ingenious scams included in the list are ‘cramming’ - which surreptiously bills consumers who visit a particular site - and a variation on cramming which involves billing consumers for a specially designed web site they didn’t know they had. Targeting small businesses and non-profit organisations the scammers offer a ‘free’ web page and then start charging phone bills without permission. One of the dot-conners caught in the act had to pay $3 million in consumer redress.

In one particularly clever scam the conners sent consumers fake ‘rebates’ for $3.50. When the consumers cashed the cheque they had unwittingly agreed to pay for a fake ISP service, for which they were then charged long distance phone bills. And it became almost impossible to cancel future monthly charges.

Medical scams were also prevalent, as well as get-rich quick scams that targeted day traders, pyramid hoaxes and travel fraud.

The top 10 targeted scams were, in this order:
Internet Auction Fraud
Internet Service Provider Scams
Internet Web Site Design/Promotions - Web Cramming
Internet Information and Adult Services - Credit Card Cramming
Multi-level Marketing/Pyramid Scams
Business Opportunities and Work-At-Home Scams
Investment Schemes and Get-Rich-Quick Scams
Travel/Vacation Fraud
Telephone/Pay-Per-Call Solicitation Frauds (including modem dialers and videotext)
Health Care Frauds

The FTC’s internet warning to consumers is to be wary of extravagant claims of earnings potentail, get promises in writing, read the fine print, look for a privacy policy and be wary of a company that does not divulge its corporate profile. In other words exercise some common sense and if it looks too good to be true it is too good to be true.

For the full story go to the FTC web site at
http://www.ftc.gov/opa/2000/10/topten.htm


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