Since you connected to the internet, your life has improved, hasn't it? You can shop without getting in the car and braving the high street. Even better, the prices you pay online are generally lower than those in the shops. Thanks to the internet and auction sites such as eBay, things that are rare, old, deleted, out of print or ludicrously cheap are just a click away. You can do your banking from home - no more lengthy queues or "I'm sorry sir, we're closed". The list of benefits is endless.
But the web isn't all good news. Over it hangs the perpetual cloud of fraud, theft and misery. All too often newspapers, magazines and TV consumer programmes carry stories about poor punters who have had their fingers burned. Some tell tales of small items bought and paid for that never turn up. Others convey harrowing sagas of a life's savings stolen by slick conmen.
In this feature we look at the 10 most common cons that are operating on the internet today. We'll see how they work and with this inside track, we'll learn how to stay safe.
Don't blame the internet for all these miseries, though. It makes the conman's life easier but the web is just the vehicle for their avarice, its name tarnished by their nefarious activities. To prove this point we'll look at the fascinating tale of Carlo Ponzi, a conman who made a fortune by, among other things, abusing the postal system of 1920s America. Like today's cyber conmen, he took advantage of the opportunities afforded him by a new communication technology and simple human gullibility.
SCAM 1: EMAIL SECURITY CHECK
You may receive an email purporting to be from either your bank or your ISP. The mail usually claims the company is carrying out a check of its security systems and needs you to email your PINs, account details and passwords. In reality, you're leaving yourself wide open to receive a thorough fleecing.
HOW TO STAY SAFE
No matter how official the email sounds, remember that companies for whom security is paramount won't ask you to email your passwords and PINs to their own system. There are, after all, few bigger risks to a company's security than demanding that the passwords to the company's system be emailed around the internet.
Look at the email address too. Real and well-known financial companies generally own 'their name.com' and have email systems that allow their staff to use this as part of their email address. As an example, fredbloggs@natwest.com is probable, as is johndoe@lloydstsb.com. If you're asked to send your Abbey National security details to some strange-sounding Yahoo! or MSN account, the smell of rats should reek high in your nostrils. Again, keep an eye on your bank's website too. As soon as it gets wind of a threat to its security, it will post the details quickly.
SCAM 2: phishing
Phishing is an evolution of the email security check scam, a ruse to which many punters are now thankfully wise. In phishing scams, rather than just asking straight out for PINs and security details via email, criminals set up exact copies of a bank's home page. They then send emails purporting to be from the bank, asking customers to enter their details into the financial institution's home page. The mail usually claims to contain information about something such as a security update or audit and contains a link that takes you directly to the duplicate site. When you enter your details, they are stolen and soon your money disappears.
This con is constantly developing. For instance, conmen now explain in their initial email that banks will never ask for security details but then go on to do just that. Web redirection is also now used to bamboozle victims. The initial email link directs the victim to a fake version of the site but also opens an authentic copy of the site in a second browser window behind it.
HOW TO STAY SAFE
Don't visit your online bank using a link in an email. Use a Favorite or type the web address into the browser. Banks never email their customers and ask for PINs so if you receive a suspicious email, do not enter sensitive information. If your bank is aware of a scam, there will be a warning on its real website so check there. You should also keep an eye on www.antiphishing.org, a news site dedicated to exposing similar scams.
SCAM 3: NIGERIAN 419
Advance fee or 419 fraud is a scam that predates the internet. It is usually known these days as 419 fraud after the section of Nigeria's penal code that it breaks. A victim receives an email supposedly from a high-ranking Nigerian official who needs help getting vast quantities of cash out of the African state and into the UK. For their help, the victim will get a healthy share of the loot. After the victim accepts in principle to help the scammer, they are hit for a large number of fees allegedly involved in moving the money. See the box 'Anatomy of a 419 Fraud' on page 230 for more details.
HOW TO STAY SAFE
Don't get involved. Thankfully, fraud of this kind is formulaic and easy to spot. Learn the telltale signs from our mock-up or visit the archive of letters at www.419fraud.com.
SCAM 4: FOREIGN LOTTERY
The foreign lottery scam involves victims receiving a congratulatory email explaining they've won a massive prize - usually thousands of euros. This scam is another form of advanced fee fraud as when you contact the official-sounding sender, you'll be asked for a fee to administer your winnings. This can be hundreds or thousands of pounds. Send the money off and you'll get nothing in return. Credit card company Egg has recently highlighted this type of scam in its TV adverts.
HOW TO STAY SAFE
According to the Metropolitan Police this type of fraud is on the rise. See www.met.police.uk/fraudalert/briefings/apr2003.htm for examples and advice. The police have some succinct advice for anyone in doubt about a fishy-sounding prize: "If it sounds too good to be true, it is." Remember this and you won't go far wrong.
SCAM 5: HIGH-YIELD
INVESTMENT FRAUD
This scam takes the form of an email containing details of an impressive-sounding investment that, if you partake, will make you stacks of cash. In reality, you can usually kiss your money goodbye.
What makes this style of scam of great concern to American and British authorities is its prevalence and how convincing the fraud emails are. The scammers have mastered the rhetoric of high finance. They offer you anything from access to the Rockefeller family's private fund to Hitler's pre-World War II gold bearer shares recovered from a lake in Austria and a million schemes between.
Beyond these bond and fund schemes, 'pump and dump' investment cons are very common. The fraud involves scammers buying up shares in a company. When they've amassed a sufficient holding, they'll email a fake newsletter to potential victims advising them that the shares in question are set to leap in value. The victim should buy now! If enough punters do this, the share will naturally increase in value. When this happens, the scammers will sell their holding and make a killing.
There's also the 'boiler room' scam. Boiler rooms are illegal and unregulated share-trading operations. Someone contacts you either by telephone or email and offers you a chunk of 'highly profitable' shares in a company. In reality the company doesn't exist or the shares are not valid for trade.
HOW TO STAY SAFE
Remember that real investment gurus sell their advice and money-making skills. If they gave them away for free, how would they stay in business? At the risk of sounding pious, don't let greed be your guide. Above all, remember the Met's mantra, "if it sounds too good to be true, it is".
SCAM 6: FAKE SSL
When shopping online most of us check the bottom right-hand corner of our web browser for the little gold padlock. When we see it we assume the site is safe and reputable. But is it?
The padlock icon pops up when a Secure Socket Layer (SSL) communication between your PC and a web server has been created. This is a secure pathway down which encrypted and highly sensitive data can be passed. Almost all online banks and shops use SSL.
Rather than just seeing the SSL icon and assuming all is well, you should also double-click on it. This will bring up the site owners' official SSL authentication certificate. The certificate should match the seller's URL.
Fraudsters have gone one stage further than just inserting a fake padlock icon into their sites. Some acquire SSL certificates from reputable sites. Though you can't right-click on an SSL certificate and select Save As, there is nothing to stop you pressing Alt-Prt Scrn and grabbing an image of a genuine certificate. The screen grab can then be woven into your site with a few lines of code.
HOW TO STAY SAFE
First, as we've already said, you should always double-click on the padlock and check the certificate that pops up. If the site's URL and that displayed on the SSL certificate are different, leave the site immediately.
Also check the URL of the site you're on. By convention, URLs that require an SSL connection start with 'https:' instead of 'http:'. As a result, con artists sometimes construct their pages so that the URL is hidden from view. If you find a site that does one or the other, be wary. According to the Microsoft Knowledgebase, you can check the real URL by entering the following into the address bar of your browser:
javascript:alert("actual web address:" + location.protocol + "//" + location.hostname + "/");
SCAM 7: MIRACLE CURES
This con generally takes the form of emails, websites or online actions for 'miracle cures' for everything from arthritis, obesity and impotence to Parkinson's disease, hair loss and cancer. These pills, potions and ointments may never have been properly tested and might, if they actually do anything at all, cause more harm than good.
HOW TO STAY SAFE
Quack doctors and their miracle cures have been around for as long as illness itself. You should approach these 'cures' with a cynical eye, though this may be easier said than done if you're ill.
Check with your GP before popping miracle pills, particularly if you're on other medication. You should also keep an eye on www.quackwatch.org, an excellent site that details the latest con 'cures'. Webster's Dictionary also has a useful resource at www.websters-online-dictionary.org/ definition/english/ qu/quack.html.
SCAM 8: SHILLING
Shill bidding or bid padding is an internet auction scam where a seller or their cohorts bid on goods to inflate artificially their perceived worth. It's a common scam that is difficult to spot.
HOW TO STAY SAFE
Don't think bid padders have an easy life. The auction site eBay in particular has taken steps to make the practicalities of shilling less straightforward. First, though sellers can have more than one registered eBay account, according to the auction site's online FAQ "there can never be any interaction (especially in the areas of bidding or feedback) between the accounts". Sellers are also explicitly forbidden within eBay's rules from bidding on their own lots.
This doesn't stop fraudsters using a network of accomplices to swell the price of goods. To stay one step ahead when bidding, always know the rough value of what you're buying. There has seldom been a unique auction on eBay so watch auctions of similar items and see if you can spot patterns of who bids on what and the prices lots sell for.
The best defence is self-control. Don't get sucked into a bidding frenzy; set your maximum bid through research and never go above it.
SCAM 9: WORK FROM HOME
You may receive an email offering you the opportunity to work from home and make 'a large income' from work that is 'in great demand' with 'no experience necessary.' Sadly, however, the only person who will make any money is the employer.
HOW TO STAY SAFE
There is always a sting in the tail. The worker is generally required to send money up front. Some require you to buy materials and often you have to sell the finished items you make yourself. In some schemes the employer promises to buy the products you've made. This sounds safer but often the employer claims that the goods are not of a sufficient quality, although quality was never discussed in the first instance.
People do manage to work from home. However, they read the small print and ask questions before accepting an offer that sounds enticing. You should do the same. Ask all about it and if you don't receive answers or the answers you receive are vague, walk away. You should also make sure everything is in writing, not just verbal confirmation and promises.
SCAM 10: FAKE ESCROW
EBay recommends you use an escrow if you spend over £250. An escrow is a trusted third party that holds the buyer's cash. When the buyer has received the goods and is happy with them, they instruct the escrow to send the money to the seller. Fake escrow sites take your money and, rather than sending it on to the seller, keep it.
HOW TO STAY SAFE
Use a reputable and well-known escrow recommended by the auction site, not the seller. If you use only the escrow recommended by eBay or your favourite auction site, you'll be safer. Also keep an eye on eBay's forums. EBay has a very strong community and if anyone is ripped off, news will soon spread.
Author: Martin Cooper
Web of Deceit