Wrong Side of the Net

How The Scams Work

Scam artists love the Internet because it's inexpensive to go online and requires no verification of identity to register a Web domain or to secure the use of an ISP. By sending unsolicited e-mail, a scammer can reach millions with little effort. In addition, an Internet site can be opened and closed with a few clicks, enabling the scammers to stay a step ahead of the law. A sophisticated scammer can even monitor his Web site to see if any hits are coming from government sources.

Do you own an e-commerce business? Read "Scram, Scam!" and dodge those pesky scammers.

The glitz, sparkle and momentum of the Internet has added a new twist to some of the age-old "opportunities" now foisted on us by the e-huckster. According to Charles S. Neal, assistant director of the enforcement division of the Texas State Securities Board, "the problem arises because consumers tend to lend credibility to anything they see in broadcast media."

Included among the so-called business opportunities we're now seeing on our computer screens is the classic pyramid scheme, where participants make money by recruiting other suckers. An ad for this type of deal could simply read, "Learn How To Make Big Money From Your Home Computer," or "Earn Thousands As A Homebased Internet Consultant." Sure, these ads are innocent enough, but, on further investigation, if you start to witness promises that you'll get rich quick, get away quick.

In fact, the New Jersey Bureau of Securities recently ordered a chain-mail scheme out of business that was really a front for an e-mail chain letter where participants were promised earnings potential of $60,000 in just a few weeks by sending one dollar to each of five people on an on-line list. Unfortunately, you can be sure something like it will surface again.

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This article was originally published in the July 2000 print edition of Entrepreneur with the headline: Wrong Side of the Net.

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