Wanted: Dot-cons

You’ve heard of dot-coms, dot-govs, dot-phs, dot-orgs, dot-edus, etc. But dot-cons?

Yes, dot-cons. And you should beware of them.

Dot-cons are con artists who have gone high-tech and have invaded the world of the Internet mainly to defraud consumers in the new economy in their own varied, clever ways. They can take advantage of the excitement of Internet auctions, peddle traditional business opportunity scams, or even hijack people’s modems and cram their phones up with mind-boggling long-distance charges.

In the Internet, scams are just a click away.

There is good news, however. Authorities monitoring the phenomenal growth of the Internet economy have bonded together to take action on the rising incidence of Internet crimes.

Consumer and law enforcement authorities in nine countries and 23 states in the United States recently did a cooperative investigation that resulted in 251 actions against fraudulent online activities.

According to a press statement released early this month by the US Federal Trade Commission (FTC), four cases have been filed in US District Courts against those caught allegedly operating false auction sites on the Internet, offering goods, accepting payments, but never delivering the merchandise.

Jodie Bernstein, director of the FTC’s Bureau of Consumer Protection, said authorities from the nine countries and 23 states have shown an unusual cross-jurisdictional cooperation in the investigation.

"The Internet is revolutionizing the way we gather information, shop and do business," Bernstein said. "This collaboration with law enforcement agencies, industry and consumers will create a climate where e-commerce can be conducted with confidence. We want the dot-con artists to know that we’re building a consumer protection coalition that spans the globe. We aim to make the Net safe for consumers."

The FTC reported that in the last two years, Internet-shopping-related complaints have ballooned from a mere 10 percent to 30 percent, with fraudulent auctions being the number one complaint. After fraudulent auctions, the FTC revealed that deception among Internet service providers (ISPs) and website design and promotion were the most frequently identified forms of dot-con scams.

Top 10 dot-cons

A group under the FTC calling itself Operation Top Ten Dot-Cons (http://www.ftc.gov/bcp/conline/edcams/dotcon) has compiled a list of online criminal activities from the database of more than 285,000 consumer complaints.

The top 10 scams were:

* Internet auction fraud

* Internet service provider or Internet access scams

* Internet information and adult services or credit card cramming

* Internet website design/promotions or Web cramming

* Multi-level marketing or pyramid scams

* Business opportunities and work-at-home scams

* Investment schemes and get-rich-quick scams

* Travel or vacation fraud

* Telephone or pay-per-call solicitation fraud, including modem dialers and videotext, and

* Health care fraud.

Those who participated in the Operation Top Ten Dot-Cons came from Australia, Canada, Finland, Germany, Ireland, New Zealand, Norway, the United Kingdom and the US.

They all agreed that Internet users in their respective countries are vulnerable to dot-con artists who seem hell bent in making money through their cleverness.

But what are these dot-con scams and how are they being carried out?

In fraudulent Internet auctions, consumers are lured to shop in a virtual marketplace where a huge selection of products and great deals are being offered.

In these virtual marketplaces, consumers say that after sending their money, they receive items that are less valuable than those promised, or worse yet, they receive nothing at all.

In fraudulent Internet access services, the victims are lured by offers of "free money" which they can get simply by cashing a check. However, victims later discover that they’ve been "trapped" into long-term contracts for Internet access or another Web service, with big penalties for cancellation or early termination.

The earlier Internet fraud, probably, involved credit cards. But lately, credit card crammers or those who bill credit card accounts for goods or services the card owner did not authorize are using adult sites as their bait.

Consumers in the nine countries complained that dot-con men operating adult sites have used their credit card numbers which they shared to prove they were over 18 years old.

Other modus operandi

Some dot-con modus operandi are strange to Filipinos. Yet some are known to us, albeit they have been transformed into high-tech forms that use the latest technology.

One of those strange fraud forms involves Internet modem dialing. The bait is free access to adult material and pornography which you can get by downloading a "viewer" or "dialer" computer program. After downloading the program, victims get exorbitant long-distance charges on their phone bill. They later discover that through the program, their modem is disconnected, then reconnected to the Internet through an international long-distance number.

Pretty high-tech, isn’t it. And there’s more.

A fraud called Web cramming lures victims by offering them a free custom-designed website for a 30-day trial period, with no obligation to continue.

However, the victims say they’ve been charged on their telephone bills or they have received separate invoices even if they never accepted the offer or never agreed to continue the service after the trial period.

Wanna go on a luxurious trip with lots of "extras" at a bargain price? You may fall for this next trick.

The travel and vacation fraud baits you with exactly what you wanted. But beware. Many vacation-hungry surfers in the US have found out that many companies deliver lower-quality accommodations and services than advertised, or worse, no trip at all. Others have been hit with hidden charges or additional requirements after they’ve paid.

Other forms of fraud lure victims to be their own boss and earn extra bucks. But instead of investing in business opportunities or biz ops, victims find themselves putting their money into biz flops.

And this next trick may sound familiar: Invest a little money and get huge returns. It’s pyramiding, no more, no less. And it has gone into the Internet.

But many have discovered that big profits always mean big risks. And most of the time, it’s too late when they discover this time-tested lesson.

And lastly, a number of "miracle cures" have started to creep into the Web, promising to cure serious or even fatal health problems. The problem, though, is most of these "miracle cures" never cure at all.

Beware, beware!

Can ordinary mortals like us who go to the Internet for virtually everything avoid getting caught in a high-tech scam? "Not always," said FTC’s Bernstein. "But prudence pays."

Bernstein offers tips on how to spot and avoid dot-con artists and avoid getting caught in an offer than just may not click. Here’s what she has to say:

* Be wary of extravagant claims. Get all promises in writing and review them carefully before making a payment whether through your credit card or cash.

* Always, always read the fine print and all relevant links. Dot-con artists usually bury the disclosures they do not want to share by putting them in teeny-tiny type or in places where you are unlikely to see them.

* Be sure to look for a privacy policy. If there is none, or if there is one but you cannot understand it, leave and go elsewhere. Your money is surely not safe there.

* And always, always be skeptical. Filipinos are known for this virtue, but some may be gullible enough to fall for high-tech sweet talk.

For more information, check the FTC website or visit other sites such as that of the Internet Scambusters (http://www.scambusters.com). Remember, dot-cons are out there.