Not long ago, the Federal Trade Commission launched a campaign to alert consumers to the growing problem of e-mail chain letters—you know, the kind that promise you can make thousands of dollars in 90 days or so, if you just send $5.00 to the four or five names at the top of the list, then add your name to the top of the list, delete the bottom name and send it out as they instruct. Many letters even say that such chain e-mail is legal and has been approved by the FTC. Wrong on all counts!
Such chain letters (and any pyramid or ponzi scheme) is illegal. Plus, folks who send off their $20 or $25 usually just kiss it goodbye. Making big money for the suckers who respond is the last thing this old scam in a new guise will do. But chain e-mail is just the beginning.
Con artists are increasingly using e-mail
The National Fraud Complaint Center reports that con artists are increasingly using unsolicited e-mail to draw the unsuspecting into their webs of deceit as the total amount lost to Internet fraud grows. In 2002 consumers lost $54 million overall to fraud over the Internet, up from $17 million in 2001. To rip off these bucks, con artists used e-mail and websites to contact victims. Of consumers filing complaints, 66% had contact with the con artists via e-mail and 18.7% though a website.
Popular e-mail scams aimed at stealing your money
Here are several popular scams to be on the alert for.
Chain e-mails. In addition to the info above, you can read more about how these work and how to help stop them, from the FTC's alert "The Lowdown on Chain Letters."
Online auctions. More people lose money on Internet auctions than all other scams combined. Although such auctions are more often marketed by website than e-mail, plenty of bogus firms are out there pitching offers at your e-mail address. The experts' advice: Stick to the well-known auction sites if you want to play the auctions, but remember even the most reputable sites with the best track records can't really control the individuals offering the merchandise. To read more about this problem, read Remar's StraightTalk Report on Online Auctions.
Work at home and earn thousands. If you believe this, I've got a bridge I'd like to sell you. Envelope-stuffing schemes and assembling craft items are two types of this scam. You send in your "start-up" fee—which can be hundreds of dollars—and then learn that the folks making the pitch have no real work to offer or any real referrals for such work. For your fee they'll tell you how to run the same work-at-home scam on other people. If you actually get some craft work to assemble, you'll discover that they'll claim your work is never up to their "quality standards." That small print in the agreement you signed means they don't have to pay you. Read more about work-at-home schemes from this FTC fact sheet.
Credit repair. Pay these companies a nice fee and they promise to fix your bad credit. The problem? No one can "fix" your credit record for you. Only you can repair your credit by making a deliberate plan to repay debt and with time. If you need help, talk to your credit union about legitimate credit counseling. Certainly, don't fall for illegal schemes that tell you to lie or make up information on new credit applications. If you do so, only you and not the con artists recommending the play will be held accountable.
Domain name registration. These scams send emails inviting you to get the edge on registering that new high profile domain name for a website. Hey, you wouldn't want to miss out on an opportunity to make some quick bucks by reselling that would you? Respond to these emails and the only bucks that will go quickly will be yours. To stay on top of new domain extensions, go to the source—Internet Corporation for Assigned Names and Numbers (ICANN) and read the FTC's alert "What's Dot and What's Not: Domain name Registration Scams."
Variations on the "Nigerian" scam. This con has been around along time—you get an email or phone call from a polite person who wants you to help them get money out of "Nigeria" or some other country. You send a small fee and they'll transfer the money into your bank account. A variation on this is emerging that consists of responding to something you are trying to sell online—such as your car—and offering to pay by cashiers check but you have to put something up front or give your bank account or some other such alarming proposition. Just say no. Read more about this scam from the FTC, "The 'Nigerian' Scam: Costly Compassion."
"Phishing" for your financial information. In these scams, the e-mail message looks like it comes from a legitimate company you may do business with—bank, phone company, insurance company, Internet service provider, for instance. It asks you to confirm personal information that has been "lost" or "corrupted" or some such by clicking on a link in the e-mail that takes you to a realistic looking fake website. The link appears to be the URL of the real company. Don't click the link. Legitimate companies never request personal info in this way. For more about this scam, read this alert from the FTC, "How Not to Get Hooked by a 'Phishing' Scam."
Other scams. The FTC offers a quick look at other Internet based scams that may solicit you via e-mail. Check out Dot Cons for more information.
Remar's StraightTalk Recommendation: Pitch all bulk e-mail right into the Recycle Bin. If I don't know the individual an e-mail is from or if I've never heard of the company or done business online with them, I just click "delete" without opening the messages. Saves my time and my wallet.
Prepared for Corning Credit Union by Remar Sutton & Associates, May 2003. Reviewed and updated March 2007. All rights reserved.
