E-Mail Fraud And The "Dirty Dozen"


The SAXLAW Report
Spring/Summer 1999

At least once in your life you have to be taken in some sort of scam. Whether it is that chain letter, or free cruise, the consumer has to protect him/herself. Fraud has now moved past the telemarketing era, and has updated itself in the computer age. Perpetrators are more likely to use the Internet for fraud, because it detaches them with the victim of their crime. It is harder to trace these criminals over the Internet, and they can access a greater population over a shorter period of time.

Recently, the Federal Trade Commission in the United States outlined its "Dirty Dozen". A compilation of a dozen types of bulk email scams that are most likely to plague businesses, both large and small:

1.Business opportunities: Many of these offer a way to make money in an Internet-related business. The scam: Majority are illegal pyramid schemes
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. The problem: It is illegal in some regions to send bulk email, and it is frowned upon by Internet Service Providers and business alike.
3.Chain letters: You are 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. These are definitely illegal, and you can kiss your money goodbye, if you send it in.
4.Work-at-home schemes: The time old scam where you send in money and get a letter that tells you to do the exact same to others, in order to make money.
5.Health and diet scams: You might as well buy life savers, because they'll be just as effective as any "miracle cure" you will be sold in this scam.
6.Effortless income: Sells the methods of making money in the markets, quickly and easily. Anything that you will pay for can be found for free in the Business section of the newspaper.
7.Free goods: If you join a club, you will receive a free gift of substantial value. You make money by recruiting others. These are a cover-up for pyramid schemes, and you will never see that free gift.
8.Investment opportunities: Also known as Ponzi schemes, your money is "guaranteed in a high return investment". In reality, the company will close down and move on after they receive your money, leaving you with some false statistics to justify your loss.
9.Cable descrambler kits: We all dream of unlimited channels, without paying the high fees of the cable companies. "Besides, they don't need my money anyway". The truth is that the majority of these boxes do not work.
10.Guaranteed loans or credit, on easy terms: These loans or credit cards, are mostly false, and often involve a pyramid scheme. If it is real, the loan will be tiny, and the credit card is not likely to be accepted in any restaurant.
11.Credit repair: Some scam artist offers to repair your damaged credit line for a fee. The only financial situation being improved here is that of the scam artist.
12.Vacation prize promotions: "You Are The Lucky Winner of A Luxury Cruise" Often the cruise will be more like Gilligan's Island, and you will be forced to pay extras for everything except the sea that you sail on. This is one trip you do not want to take.

Although these examples pertain to the United States, these scams are definitely present in Canada, and other countries. In the changing world of e-Commerce there are no borders, and criminals do not care whose laws they break. Nothing in life comes easy, especially over the Internet. Always check, and double check sources, and make sure you use secure methods of payment when you give money to someone over the phone or on the Internet.


THE SAXLAW REPORT has been prepared by Michael M. Sax with assistance from David Sax and Annalysa Cabral for information purposes only and does not constitute a legal opinion. This representation is not intended to create, and the receipt of it does not constitute a solicitor-client relationship. Readers should not act upon this information without seeking professional counsel. This information is forwarded on the basis and understanding that Michael M. Sax, Barrister & Solicitor is under no responsibility or liability whatsoever in respect thereof.

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