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FTC Names Its Dirty Dozen: 12 Most Likely Email Scams

The Federal Trade Commission is responsible for issuing and enforcing rules for consumer issues on the Internet. As part of this process, the FTC has published a list of the 12 scams you are most likely to receive as email.

The Dirty Dozen Scams

The "dirty dozen" are:

1. Business opportunities

These business opportunities make it sound easy to start a business that will bring lots of income without much work or cash outlay. The solicitations trumpet unbelievable earnings claims $1,000 a day or more without doing any work. Many business opportunity solicitations claim to offer a way to make money in an Internet-related business. Short on details but long on promises, these messages usually offer a telephone number to call for more information. In many cases, you'll be told to leave your name and telephone number so that a salesperson can call you back with the sales pitch.

The scam: Many of these are illegal pyramid schemes masquerading as legitimate opportunities to earn money.

2. Bulk email

Bulk email solicitations offer to sell you lists of email addresses, by the millions, to which you can send your own bulk solicitations. Some offer software that automates the sending of email messages to thousands or millions of recipients. Others offer the service of sending bulk email solicitations on your behalf. Some of these offers say, or imply, that you can make a lot of money using this marketing method.

The problem: Sending bulk email violates the terms of service of most Internet service providers. If you use one of the automated email programs, your ISP may shut you down. In addition, inserting a false return address into your solicitations, as some of the automated programs allow you to do, may land you in legal hot water with the owner of the address's domain name. There are also very strict rules, known as the CAN-SPAM Act, regulating bulk email marketing.

3. Chain letters

You're asked to send a small amount of money ($5 to $20) to each of four or five names on a list, replace one of the names on the list with your own, and then forward the revised message via bulk email. The letter may claim that the scheme is legal, that it's been reviewed or approved by the government; or it may refer to sections of U.S. law that legitimize the scheme.

The scam: Chain letters are almost always illegal and nearly all of the people who participate lose their money. The fact that a "product" such as a report on how to make money fast may be changing hands in the transaction does not change the legality of these schemes.

4. Work-at-home schemes

Envelope-stuffing solicitations promise steady income for minimal labor-for example, you'll earn $2 each time you fold a brochure and seal it in an envelope. Craft assembly work schemes often require an investment of hundreds of dollars in equipment or supplies, and many hours of your time producing goods for a company that has promised to buy them.

The scam: You'll pay a small fee to get started in the envelope-stuffing business. Then, you'll learn that the email sender never had real employment to offer. Instead, you'll get instructions on how to send the same envelope-stuffing ad on your own. If you earn any money, it will be from others who fall for the scheme you're perpetuating.

5. Health and diet scams

Pills that let you lose weight without exercising or changing your diet, herbal formulas that liquefy your fat cells so that they are absorbed by your body, and cures for impotence and hair loss are among the scams flooding email boxes.

The scam: These gimmicks don't work. The fact is that successful weight loss requires a reduction in calories and an increase in physical activity. Beware of case histories from "cured" consumers claiming amazing results and testimonials from "famous" medical experts you've never heard of.

6. Effortless income

The trendiest get-rich-quick schemes offer unlimited profits exchanging money on world currency markets; newsletters describing a variety of easy-money opportunities; the perfect sales letter; and the secret to making $4,000 in


one day.

The scam: If these systems worked, wouldn't everyone be using them? The thought of easy money may be appealing, but success generally requires hard work.

7. Free goods

Some email messages offer valuable goods-for example, computers, other electronic items, and long-distance phone cards-for free. You're asked to pay a fee to join a club, then told that to earn the offered goods, you have to bring in a certain number of participants. You're paying for the right to earn income by recruiting other participants, but your payoff is in goods, not money.

The scam: Most of these messages are covering up pyramid schemes, operations that inevitably collapse. The payoff goes to the promoters and little or none to you.

8. Investment opportunities

Investment schemes promise outrageously high rates of return with no risk. Many are Ponzi schemes, in which early investors are paid off with money contributed by later investors. This makes the early investors believe that the system actually works, and encourages them to invest even more.

The scam: Ponzi schemes eventually collapse because there isn't enough money coming in to continue simulating earnings. Other schemes are a good investment for the promoters, but no for participants.

9. Cable descrambler kits

For a small sum of money, you can buy a kit to assemble a cable descrambler that supposedly allows you to receive cable television transmissions without paying any subscription fee.

The scam: The device that you build probably won't work. Most of the cable TV systems in the U.S. use technology that these devices can't crack. What's more, even if it worked, stealing service from a cable television company is illegal.

10. Guaranteed loans or credit, on easy terms

Some email messages offer home-equity loans that don't require equity in your home. Usually, these are said to be offered by offshore banks. Sometimes they are combined with pyramid schemes, which offer you an opportunity to make money by attracting new participants to the scheme.

The scams: The home equity loans turn out to be useless lists of lenders who will turn you down. The promised credit cards never come through, and the pyramid schemes always collapse.

11. Credit repair

Credit repair scams offer to erase accurate negative information from your credit file so you can qualify for a credit card, auto loan, home mortgage, or a job.

The scam: The scam artists who promote these services can't deliver. Only time, a deliberate effort, and a personal debt repayment plan will improve your credit. The companies that advertise credit repair services appeal to consumers with poor credit histories. Not only can't they provide you with a clean credit record, but they also may be encouraging you to violate federal law. If you follow their advice by lying on a loan or credit application, misrepresenting your Social Security number, or getting an Employer Identification Number under false pretenses, you will be committing fraud.

12. Vacation prize promotions

Electronic certificates congratulating you on "winning" a fabulous vacation for a very attractive price are among the scams arriving in your email. Some say you have been "specially selected" for this opportunity.

The scam: Most unsolicited commercial email goes to thousands or millions of recipients at a time. Often, the cruise ship you're booked on may look more like a tug boat. The hotel accommodations likely are shabby, and you may be required to pay more for an upgrade. Scheduling the vacation at the time you want it also may require an additional fee.

In Closing

Don’t check your common sense at the door simply because you are surfing the web. If it seems to good to be true, it is. Don’t fall victim to these scams.

About the Author

Richard A. Chapo is with SanDiegoBusinessLawFirm.com - legal services for San Diego businesses. Read more business law articles to help your business.

 

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