How to Spot Internet Scams

Fraudsters have gone high-tech by scamming some consumers out of money and stealing their identities on the Internet. Whether shopping online or buying and selling items through an auction, you must beware of how you use your personal information. Learn how to protect yourself against fraud by identifying the most common Internet scams.

Difficulty: Easy

Instructions

1. Investigate the seller before bidding in an online auction. You may receive items that are less valuable than expected, or you may get nothing and lose your money. Pay for online auction items with a credit card or an escrow service. Stay away from any site where the seller insists on less secure forms of payment, such as a check or money order.

2. Read carefully any email offers of free money for cashing a check. If you get a check in the mail, read it carefully to understand the conditions to which you're agreeing. You may face unexpected or unauthorized charges to your phone bill if you cash in.

3. Watch out for web cramming deals. You may get email offers or see Internet ads to get a 30-day trial of email services or personalized websites. Although you are not obligated to continue the trial offer, you can still be charged on your phone bill. Internet access services can trap you into long-term web service contracts with huge penalties if you cancel.

4. Stay away from marketing pyramids; they're usually illegal. Pyramid schemes promise you chigh profits from selling products or services and recruiting other sellers. You're expected to buy expensive inventory or sell high volumes. The catch is that you are selling to other distributors instead of to the general public, so it's impossible to earn any money.

5. Request references from online travel agencies. Get the trip details in writing if you sign up for any deals. You may find offers for trips with lots of "extras" at low prices, but they are really of lower quality and you may not get everything as promised. Some online travel companies falsely advertise deals and then charge customers hidden or additional fees.

6. Get everything in writing and know what you're doing if you enter into an Internet business. Study any contracts before signing and, if necessary, have an attorney examine the documents. The lure of making big bucks while working for yourself can turn out to be a con that costs you your life savings.

7. Seek the advice of a health care professional before purchasing any medical products on the Internet. Cure-alls and "medical" treatments rarely live up to the hype. You may be endangering your health if you put all of your hopes—and your money—into a product that doesn't produce real results.

Tips & Warnings

• Use a credit card to shop online, so you can dispute the charges if something goes wrong. Make sure that you are on a secure webpage when making any transactions using your credit card number.
• Steer clear of any business or seller that does not clearly state all of its contact information. Check its legitimacy with the Better Business Bureau or your local consumer protection office.
• Never give an online vendor your social security number, driver's license number or banking information, and never disclose this information by email.

Resources

• Learn more about spotting Internet scams.
• Report Internet crime at the FBI's website.
• Verify the legitimacy of an online business.