Introduction
Scams are alarmingly common on the Internet. In fact, a recent article in The Standard claims that one in five web surfers surveyed has been the victim of Net-related fraud. Fortunately, only about two percent of web users believe their credit card details have been ripped off this way.
In Dec. 2000, Better Business Bureau officials in the U.S. and Canada say they've received a number of complaints about a company operating as PS2storeusa.com and PS2storecanada.com that takes consumers' money but doesn't deliver the Sony Playstation 2 units it promises. CNET has details.
The Nigerian Connection
Nigeria is infamous for email-based scams purporting to share the wealth of a former high-ranking government official (etc.) if you can help his widow get the money out of the country and into your account.
In Dec. 2002, news of an elaborate scam, dubbed "Nigerian Net Scam, Version 3.0" emerged. It takes advantage of a little-known loophole in the U.S. and Canadian banking systems. Many people don't realize that when a bank says funds have cleared, it doesn't mean the check is good. Briefly, the scam works like this: the scammer sends the seller a cheque for the amount of the item, plus the amount for transportation, then asks that, once the cheque clears, to wire the transportation fee back to them to expedite shipment.
PC Buyer's Guide has confirmed that this loophole also applies to Canadian banks. A representative from Royal Bank claims that the only way to be assured that the funds are available are to take the cheque to the issuing bank listed on the cheque. If this is not practical (as, for example, it would not be if the issuing bank is in another province or country), the bank-recommended workaround is to have the money wired to you.
Says Wired: "the bottom line is this: No legitimate company will offer to pay you by arranging to send you a check and asking you to wire some of the money back. If that's the pitch, it's a scam."
Pyramid Ploys
Some of the most common schemes are variations on the old pyramid ploy. For example, as noted on News.com, Hitsgalore's Web site claims investors can earn 400 percent returns. It says by paying $99 to sponsor banner ads, investors can earn $495 if they get "only" 20 more investors to also pay $99 each to Hitsgalore.
"We do all the selling for you," the Web site says. "There is no limit on how many banners you can sponsor, that means no limit on your income for doing nothing more than being a sponsor." If this sounds like a pyramid scheme you you, you're not alone. The remarkable thing about it is how many investors they've suckered. The company's market value rose from $53 million to $1 billion within three months after it went public.
There are also a number of "pay-per-click" banner programs that promise to pay, but seemingly never do. Macmonkey, for example, warns: "DO NOT HOST BANNERS FROM SAFE-AUDIT. They have refused to pay us for money which we earned fairly and legally according to their terms."
Page Hijacking
A recent trend in Internet Advertising is to "hijack" keywords on a web page you visit, to lead you to advertisers' web sites. This concept is similar to a so-called SmartTags feature which was originally planned to be included in Internet Explorer 6 but was removed, after overwhelming opposition to the plan. (It's still part of Office XP.) Via various virus-like browser add-ons, a number of Internet advertisers have since explored similar ideas. Once such scheme is TopText, an optional addition to search tools iMesh and the Kazaa Media Search installer. Read more....
In Aug. 2001, an online banner hijacking scheme some are calling unfair competition emerged from Gator, which claims "consumers invite the company to serve pop-ups when they install its software." (Yeah, right.) The company claims to have "millions of active users" using its online helper application that manages passwords and user IDs. When installed, the Gator software tracks a person's web surfing habits and delivers banners from a Gator advertiser related to his or her interests instead of the banner originally designed to appear on the page.
Other companies use a variety of other methods to hijack web pages. News publisher TotalNews in 1997 was taken to court by several publishers after it "framed" pages from other sites with its own content.
Lookalike URLs
A related scam involves crafting a special webpage designed to look like another page or site. I recently received an email advising me that "browsing through the CNN website I cam across this CNN article which seems to be about you." Now, who wouldn't want to look at that? The trouble is: the website URL only looks like it is pointing to CNN.
In actuality, the URL "http://www.cnn.com:USArticle1840@www.someothersite.com" points to some other site.
Yet another category of look-alike scams involves fake websites crafted to look like a place where you might type a password and user account to charge items to an online account. iPodlounge describes one such scam, in which a website posted a dummy Evocash login box on its website. Unsuspecting users who login are taken to the Evocash website but at the same time a copy of the username and password is sent to another address where these people can then login and take control of the account.
Only days later, Reuters reported a similar scam in which fraudsters set up a fake eBay Web site, designed to trick eBay members out of giving out their billing information. ::
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