Internet Scams

Internet consumer fraud is a big business in today’s world, especially with the vast use of websites and e-mail. According to the National Consumer League’s Internet Fraud Watch, there are some scams that are more prevalent than others. Let’s go through the Top 10 Internet Fraud Scams in the United States. In this course, we will discuss some of the most common Internet fraud scams in the United States and how to counter them.

Scam #1: Fake Check Scams

In this scam, you have placed a classified ad for an item to be sold (e.g., car, furniture, etc.) which generates some interest. This prospective “buyer” offers to give you more than the requested amount by a certified check, and then he/she asks that you wire the remainder to him/her. Unfortunately, the certified check is a fake, which means that you will not receive the majority of payment for the item. Additionally, the money that you wired to the buyer is also gone, with no way of retrieving it; therefore, you have lost more than what your ad stated. Plus, in some instances, you have already sent the product sold.

Scam #2: General Merchandise

A general merchandise scam occurs when you have purchased an item through an online classified ad (other than an auction site), the amount you paid the private seller has cleared your account, and you never receive the item purchased, or you receive an item that is much different than stated in the ad.

Scam #3: Online Auctions

When you purchase something from an online auction (e.g.,, Paypal, etc.), you must be cautious of who you are selling to or receiving goods and services from on the site. Remember, an online auction site is just a warehouse for business; you are actually transacting business with a private party. There are people out there who will misrepresent a product or fail to deliver products you have purchased through the site. With that said, if something goes wrong in the transaction, there is not much that can be done because it is considered to be a private sale.

Scam #4: Nigerian Letter Scams

In this scam, you are promised by a “government official” or other high ranking official (or his/her family member) of a foreign country to receive a large amount of money when you provide your financial information to transfer money out of the country. The perpetrator will then use the information provided to empty out your bank account. Additionally, the perpetrator may persuade you that money is needed upfront to pay for fees or bribe officials.

Scam #5: Foreign Lotteries

This scam occurs when foreign agents contact U.S. persons by e-mail, telephone or mail to entice them to purchase chances in a high-stakes foreign lottery. Once the callers buy into the scheme, they are called to announce that they won the lottery and will need to send money to pay for administrative fees and taxes to obtain the prize money, as well as personal financial information to send the prize to them. No matter what is said, this is ALWAYS a scam. Furthermore, it is illegal for any foreign lottery to solicit customers in the United States.

Scam #6: Advanced Fee Loans

In this scam, you are given an e-mail or web advertisement promising you a business or personal loan, no matter what your credit is, for an upfront fee. Turns out, you supply the fee and your personal financial information, and the scammers get your identity as well as any money you may have.

Scam #7: Prizes/Sweepstakes

In this scam, you are promised payment for a prize or sweepstakes that never happens. In many instances, you may not even remember signing up for the sweepstakes or prize (probably because you didn’t). Your name is selected, and the scammers then ask for your personal information to either send the money (with a counterfeit check, which can get you into trouble), or they say they can deposit the money directly into your account. Either way, you will not obtain the funds.


Scam #8: Phishing

A phishing scam occurs when consumers receive an e-mail from what appears to be a business they deal with (e.g., financial institution) asking to update their personal information (i.e., credit card information, bank account numbers, etc.) due to an upgrade in the security system or other serious issue. In most instances, the e-mail has a link to a fraudulent, “look-a-like” site where people put in their information and the scammers use it fraudulently.

Scam #9: Online Relationship

In this scam, a con artist develops an online relationship with someone and then convinces the “victim” to send money to him/her for some reason. It may be money for transportation to meet the victim or just money to “pay off some debt.” Whatever the case may be, it is not true and is also dangerous.

Scam #10: Internet Access Services

In some instances, you will receive information about special Internet access services that will charge you half of what you would normally pay, but you must provide your personal financial information upfront, and you must pay automatically through a checking account or credit card. Unfortunately, many of these programs are fake and you are giving your information to an identity thief... and you never receive the services advertised.

How Can You Avoid Internet Consumer Scams?

More than anything else you can do, you just need to use common sense to avoid Internet consumer scams. If it sounds like it is too good to be true, it probably is. If you feel uncomfortable with any sort of sale, don’t do it.

A few other tips to consider:

Know who you are dealing with.If the seller or company is unfamiliar, do not do business with the person or entity until you do your homework. Check with the Better Business Bureau or other local or state consumer protection agencies. You should always get the physical address and telephone number of the seller in case there is a problem.

Don’t believe promises of money. If it sounds too good to be true, it probably is. If someone claims that you can earn money without any work, or you can get a loan or credit card without good credit, or you can make money with limited risk in the investment, it is probably a scam.

Don’t feel pressured. You need to remember that you are the one in control if someone is trying to sell something to you. If you do not feel comfortable, or you want to know more about the offer, take your time and don’t feel pressured. If the seller says you will lose out on the deal if you do not act right then, take your time anyway.

Be cautious about unsolicited e-mails. In many instances, unsolicited e-mails are fraudulent. If you are unfamiliar with a company or charity that sends you an e-mail, either ask to be removed from the subscriber list or just delete the e-mail. Do not respond to the e-mail if you do not have a desire to receive further correspondence from this group or individual.

Beware of downloads. You should be extremely cautious with any type of download required to make a purchase, or just to learn more about something of interest. In many instances, downloads contain viruses that can wipe out your entire computer; therefore, you should only download from websites you know and trust.

Guard your personal information. It is important that you only provide your personal financial information to a website you know and trust (e.g., financial institution). Don’t provide your credit card or account number unless you are purchasing something from a reputable company and it is a secure website.

Pay the safest way possible. The safest way to purchase items online is using a credit card because you can dispute any charges that do not result as you expect. Additionally, technology now requires extra precautions for the use of credit cards over the Internet. Although it is not perfect, it is a deterrent to many criminals.

Source: National Consumers League

Reporting Internet Fraud

If you have been a victim of Internet fraud, you should contact the police as soon as possible. The faster you let someone know of the problem, the better the outcome.


View Certificate