FTC Names Its Dirty Dozen: 12 Most Likely Email Scams
The Federal Trade Commission is responsible for issuing and
enforcing rules for consumer issues on the Internet. As part of
this process, the FTC has published a list of the 12 scams you
are most likely to receive as email.
The Dirty Dozen Scams
The "dirty dozen" are:
1. Business opportunities
These business opportunities make it sound easy to start a
business that will bring lots of income without much work or
cash outlay. The solicitations trumpet unbelievable earnings
claims $1,000 a day or more without doing any work. Many
business opportunity solicitations claim to offer a way to make
money in an Internet-related business. Short on details but long
on promises, these messages usually offer a telephone number to
call for more information. In many cases, you'll be told to
leave your name and telephone number so that a salesperson can
call you back with the sales pitch.
The scam: Many of these are illegal pyramid schemes masquerading
as legitimate opportunities to earn money.
2. Bulk email
Bulk email solicitations offer to sell you lists of email
addresses, by the millions, to which you can send your own bulk
solicitations. Some offer software that automates the sending of
email messages to thousands or millions of recipients. Others
offer the service of sending bulk email solicitations on your
behalf. Some of these offers say, or imply, that you can make a
lot of money using this marketing method.
The problem: Sending bulk email violates the terms of service of
most Internet service providers. If you use one of the automated
email programs, your ISP may shut you down. In addition,
inserting a false return address into your solicitations, as
some of the automated programs allow you to do, may land you in
legal hot water with the owner of the address's domain name.
There are also very strict rules, known as the CAN-SPAM Act,
regulating bulk email marketing. 3. Chain letters
You're asked to send a small amount of money ($5 to $20) to each
of four or five names on a list, replace one of the names on the
list with your own, and then forward the revised message via
bulk email. The letter may claim that the scheme is legal, that
it's been reviewed or approved by the government; or it may
refer to sections of U.S. law that legitimize the scheme.
The scam: Chain letters are almost always illegal and nearly all
of the people who participate lose their money. The fact that a
"product" such as a report on how to make money fast may be
changing hands in the transaction does not change the legality
of these schemes.
4. Work-at-home schemes
Envelope-stuffing solicitations promise steady income for
minimal labor-for example, you'll earn $2 each time you fold a
brochure and seal it in an envelope. Craft assembly work schemes
often require an investment of hundreds of dollars in equipment
or supplies, and many hours of your time producing goods for a
company that has promised to buy them.
The scam: You'll pay a small fee to get started in the
envelope-stuffing business. Then, you'll learn that the email
sender never had real employment to offer. Instead, you'll get
instructions on how to send the same envelope-stuffing ad on
your own. If you earn any money, it will be from others who fall
for the scheme you're perpetuating.
5. Health and diet scams
Pills that let you lose weight without exercising or changing
your diet, herbal formulas that liquefy your fat cells so that
they are absorbed by your body, and cures for impotence and hair
loss are among the scams flooding email boxes.
The scam: These gimmicks don't work. The fact is that successful
weight loss requires a reduction in calories and an increase in
physical activity. Beware of case histories from "cured"
consumers claiming amazing results and testimonials from
"famous" medical experts you've never heard of.
6. Effortless income
The trendiest get-rich-quick schemes offer unlimited profits
exchanging money on world currency markets; newsletters
describing a variety of easy-money opportunities; the perfect
sales letter; and the secret to making $4,000 in one day.
The scam: If these systems worked, wouldn't everyone be using
them? The thought of easy money may be appealing, but success
generally requires hard work.
7. Free goods
Some email messages offer valuable goods-for example, computers,
other electronic items, and long-distance phone cards-for free.
You're asked to pay a fee to join a club, then told that to earn
the offered goods, you have to bring in a certain number of
participants. You're paying for the right to earn income by
recruiting other participants, but your payoff is in goods, not
money.
The scam: Most of these messages are covering up pyramid
schemes, operations that inevitably collapse. The payoff goes to
the promoters and little or none to you.
8. Investment opportunities
Investment schemes promise outrageously high rates of return
with no risk. Many are Ponzi schemes, in which early investors
are paid off with money contributed by later investors. This
makes the early investors believe that the system actually
works, and encourages them to invest even more.
The scam: Ponzi schemes eventually collapse because there isn't
enough money coming in to continue simulating earnings. Other
schemes are a good investment for the promoters, but no for
participants.
9. Cable descrambler kits
For a small sum of money, you can buy a kit to assemble a cable
descrambler that supposedly allows you to receive cable
television transmissions without paying any subscription fee.
The scam: The device that you build probably won't work. Most of
the cable TV systems in the U.S. use technology that these
devices can't crack. What's more, even if it worked, stealing
service from a cable television company is illegal.
10. Guaranteed loans or credit, on easy terms
Some email messages offer home-equity loans that don't require
equity in your home. Usually, these are said to be offered by
offshore banks. Sometimes they are combined with pyramid
schemes, which offer you an opportunity to make money by
attracting new participants to the scheme.
The scams: The home equity loans turn out to be useless lists of
lenders who will turn you down. The promised credit cards never
come through, and the pyramid schemes always collapse.
11. Credit repair
Credit repair scams offer to erase accurate negative information
from your credit file so you can qualify for a credit card, auto
loan, home mortgage, or a job.
The scam: The scam artists who promote these services can't
deliver. Only time, a deliberate effort, and a personal debt
repayment plan will improve your credit. The companies that
advertise credit repair services appeal to consumers with poor
credit histories. Not only can't they provide you with a clean
credit record, but they also may be encouraging you to violate
federal law. If you follow their advice by lying on a loan or
credit application, misrepresenting your Social Security number,
or getting an Employer Identification Number under false
pretenses, you will be committing fraud.
12. Vacation prize promotions
Electronic certificates congratulating you on "winning" a
fabulous vacation for a very attractive price are among the
scams arriving in your email. Some say you have been "specially
selected" for this opportunity.
The scam: Most unsolicited commercial email goes to thousands or
millions of recipients at a time. Often, the cruise ship you're
booked on may look more like a tug boat. The hotel
accommodations likely are shabby, and you may be required to pay
more for an upgrade. Scheduling the vacation at the time you
want it also may require an additional fee.
In Closing
Don