|
The number of companies that advertise online grows steadily with the number of online shoppers. Fraud and deception, however, continue to weaken consumer confidence in the e-marketplace. However, just like advertising laws continue to protect consumers against unlawful advertisements, the FTC is also enforces consumer protection laws for the cyberspace.
Click here for a free evaluation of your case.
Types of Internet Fraud
Online Fraud and Scams
Products or services advertised online must follow the same rules as regular advertising and remain truthful and accurate.
Online cases so far have involved fraud, including credit repair schemes, business opportunities, and pyramid scams. A very costly Internet scam involves certain sites that require consumers to download a special program to operate and view the site. Without the consumers’ knowledge, the website disconnects the local Internet service and reconnects it to a foreign number. Even after terminating the downloaded program, the computer remains connected to the long distance number, billing the consumer for every minute until the computer is shut down.
-
Auction and Retail Schemes
Fraudulent schemes appearing online most frequently include retail goods. In most cases, high-value items, such as jewelry or collectibles attract customers, willing to pay in advance for the item. Finally, the consumer receives an item of lesser value or nothing at all.
-
Business Opportunity/Work from Home Schemes
Fraudulent business schemes lure customers with the opportunity of making thousands of dollars in a month, while working from home. People are required to pay a set amount of money in order to receive material/information. In reality, those people will never receive anything.
Identity theft involves the wrongful usage of someone’s personal date. The data is usually used in fraudulent and deceptive ways for economic gain, such as opening bank accounts or loan applications.
Market manipulation schemes distribute false information in order to drastically increase the price in thinly traded stocks. The stocks are then immediately sold for substantial profits, while the prices then fall back to the usual level. Buyers who are not aware of those so-called “pump-and-dump” schemes now have low value stocks for which they paid considerably too much money.
Additionally, “short-selling” or “scalping” schemes operate similarly and also disseminate false or fraudulent information in an effort to cause price decreases/increases.
Similar to auction schemes described above, credit card schemes unlawfully obtain credit card numbers for ordering services or products. In this case, a consumer might discover a high-value item online for a very attractive price. The “seller” even agrees to ship the item before any payments are made. Once the consumer agrees to receive the item, the “seller” uses the consumer’s name along with an unlawfully obtained credit card (which belongs to a third person) to buy the item at a complete legitimate Web site. Once the consumer receives the item, he/she authorizes the credit card, making a payment directly to the “seller.”
Hot Topics in Internet Advertising include:
- Advanced fee loans
- Charity scams
- Fake check scams
- Magazine sales
- Buyers club
- Bogus credit card offers
- Travel fraud
- Credit repair
If you or somebody you know has become a victim of false Internet advertising or fraudulent online schemes, click here for a free evaluation.
|
Facts About General Law
