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Caught in the Web of Lies

With Internet fraud reports on the rise, is there any way for legitimate e-tailers to avoid a bad rap?

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This story appears in the January 2003 issue of Entrepreneur. Subscribe »

The economy aside, e-tailers now have another reason to be concerned about a lack of sales: the recent backlash against the Internet. Blame it on the frequent news reports that discuss the dark side of the Internet. Every day, the American public reads reports and watch TV updates detailing the latest in Net fraud, where scam artists hijack online shoppers' credit card numbers or Social Security numbers. Others are concerned about the growth of sites promoting violence, pornography and gambling. Many fear it's a matter of time before online users constantly bombarded with spam, turn against the Internet and contribute to the backlash against legitimate e-tailers.

According to experts, fraud is negatively affecting entrepreneurs in the short term-and harming them in the long run. "If fraud is allowed to grow, then the online marketplace won't develop to its full potential," says Eric Wenger, a lawyer and chair of the Bureau of Consumer Protection's Internet Coordinating Committee at the FTC in Washington, DC.

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