Scam Alert! - Industry Trend or Event

Home Office Computing, April, 2001 by Dan Costa

It is also a good idea to protect yourself against the registration of domain names that may infringe on your trademarks or copyrights. Horowitz says he had this problem after he established fightback.com. "I found somebody had registered fightback.org and wanted to sell it for $999," says Horowitz. "We went out and registered 20-something domain names so someone doesn't rip off my trademarks." Horowitz also recommends using a well-established registration service, such as Network Solutions (www.networksolutions.com).

WHEN PRECAUTIONS FAIL

Even if you've taken all conceivable precautions, there's always the chance a particularly wily scammer will catch you napping. If you become a victim, there is nothing to be ashamed of--and reporting the incident quickly could help spare others.

The best thing to do if you think you've been taken by a scam is contact your state Attorney General's office. "These are the law-enforcement agencies that usually keep the best tabs on con men and Ponzi swindlers," says Walsh. The U.S. Justice Department also has an office that focuses on Ponzi schemes and business swindles.

But although the state attorneys general work hard to battle scams, don't expect them to get your money back for you. Many law enforcement officials at the local level consider scams "victimless crimes," and, therefore, low priorities. "In the D.A.'s office in Los Angeles County, you need to sustain at least a $100K loss before the office will take action," says Horowitz. "Sometimes, if you pool resources with other victims, you can reach that level, but it can be hard."

A cautionary note: Although many blame the Internet for the number of scams out there, most scams work just as well by phone as they do online, and use the same methods. In effect, however, the Internet allows scammers to reach a larger number of potential marks while incurring less expense. "Ponzi scammers have always used direct mail to find marks ... the Internet is, among other things, a very efficient form of direct mail," says Walsh. "The underlying mechanics of the schemes haven't changed, and probably won't."

Horowitz agrees and adds that the best defense against scams is the same as always: common sense. Issuing a well-worn but nonetheless valid warning, he says, "If it looks like a scam, sounds like a scam, smells like a scam--it's a scam."

NETTING VICTIMS

Just about everyone has received an e-mail message promising riches, but Web sites are the most common way that consumers are solicited for fraudulent Internet offers.

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Source: Internet Fraud Watch, Jan.-Sept. 2000

CREDIT CARDS: A SAFE BET

The safest way to do business online is to use a credit card, because they preserve your legal right to dispute charges in cases of fraud. Unfortunately, however, most scare victims continue to pay offline. That is one reason why the average amount of money lost by fraud victims is increasing, say the experts. The average loss per person rose from $310 in 1999 to $412 in the first nine months of 2000, according to the Internet Fraud Watch.