Beware of Internet Fraud

What is internet fraud?

Internet fraud is a growing problem in the United States. There are many criminals who will try to steal your money by using the internet to access your financial information. However, unlike hackers who break into computer systems and steal your information, internet fraud needs your participation. Internet scam artists do everything they can to trick you into giving them your money voluntarily. They do not rely on their ability to steal your information, but on your gullibility and willingness to believe that you can be given something for nothing.

What are some examples of internet fraud?

The most common form of internet fraud involving students is fraud relating to internet auction sales, such as on eBay. The most common complaint is that the buyer sends the money but the seller never sends the goods. There are many criminals on eBay and other auction sites that pretend to be selling something they do not even own, just to trick you into sending them your money.

Another popular scam concerns an email that is circulated by an internet scam artist which seems to be from your bank or your credit card company. The email says that the company needs you to confirm your identity with them, and then proceeds to ask you to provide vital information such as your social security number, credit card account number, bank account number, etc. Once the scam artist receives this information, they use it to empty out your accounts or to make fraudulent purchases on your credit card. This type of scam is referred to as “phishing” because the scam artist is fishing for your information and hoping that you will provide it.

Another email scam involves a person in another country (popular countries are Nigeria and China). In these emails, the scam artist tells you that they are a high ranking public official and they have somehow come into possession of millions of dollars but they need your help in order to get it out of their country. The scam artist will promise you 15-40% of the money if you help him smuggle it out. What will really end up happening is that you will be sent documents promising you that the money is on the way. However, the money will mysteriously be held up because you need to pay a certain “tax” or “bribe” in order to make the transaction complete. In reality, all you’re doing is paying your money directly to the scam artist who never intends to send you a single penny. This kind of scam appeals to the human desire to receive money and wealth for little or no effort. It’s the same desire which leads people to gamble or to spend a lot of money on lottery tickets. In this case, all you will do is lose money.

Other scams that rely on your desire to receive something for nothing are emails which claim you have won a foreign lottery or that you have won a prize in some contest that you didn’t even know you had entered (this is due to the fact that you didn’t enter it because the contest doesn’t exist).

How can I avoid being a victim of internet fraud?

The best way to recognize an internet scam is to follow the advice in the old saying, “If it seems too good to be true, it probably is.” In other words, no one is going to offer you millions of dollars or free prizes for nothing. Do not allow yourself to be fooled by the promise of riches beyond your wildest dreams. To date, no one has gotten rich by responding to an email from a stranger.

When bidding on eBay or on any other internet auction site, consider the following advice:

  • Understand as much as possible about how the auction works, what your obligations are as a buyer, and what the seller’s obligations are before you bid.
  • Find out what actions the web site/company takes if a problem occurs and consider insuring the transaction and shipment.
  • Learn as much as possible about the seller, especially if the only information you have is an e-mail address.
  • If it is a business, check the Better Business Bureau where the seller/business is located.
  • Examine the feedback on the seller.
  • Determine what method of payment the seller is asking from the buyer and where he/she is asking to send payment.
  • If a problem occurs with the auction transaction, it could be much more difficult if the seller is located outside the US because of the differences in laws.
  • Ask the seller about when delivery can be expected and if there is a problem with the merchandise is it covered by a warranty or can you exchange it.
  • Find out if shipping and delivery are included in the auction price or are additional costs so there are no unexpected costs.
  • There should be no reason to give out your social security number or drivers license number to the seller.
  • Never agree to complete your transaction outside of the auction site by making a personal deal with the seller over email. Make sure your transaction is through the site so that you will be eligible for whatever protections the site provides.
  • Use escrow services (e.g., to conduct your online auction transaction when ever the amount is over $500.00 (Ebay will insure you up to $500.00 for most transactions). An escrow service will collect the money from you and will hold it until they receive the goods. If the goods never arrive, they will return your money to you minus the escrow fee. Make sure to check on the legitimacy of the escrow company if the seller suggests one other than

Additionally, no major corporation or bank is going to send you an email and ask you to confirm your identity over the internet. If you receive what looks like an email from your bank or credit card company, do not respond to it. Call the company directly to confirm that they have been trying to contact you.

Do not use any phone number provided in the email, because if it is a scam, it’s likely that number will direct you to the person running the scam. Only use a phone number provided in the phone book, on the back of your credit card, or from your own records. If you can’t find the number any other way, you can call 411 for information and the operator will provide you with the number for a small fee.

It’s important that you contact the company so that they can investigate if a scam is taking place and can seek to shut it down.

Will I be able to get my money back?

No. In most cases, you are never going to recover any of the money you have lost. In most instances the guilty party is in another state or country and cannot be found.

If you used a credit card to make payment or if your credit card has been used fraudulently, you may have more recourse. You can contact your credit card company and advise them of the fraud as soon as you become aware of it. They will have you file an affidavit of fraud and they will investigate your case.

If they verify the fraud, they will not hold you responsible for any charges you did not authorize. In general, a credit card is the safest form of payment on the internet.

Where can I go for more information about internet fraud?

For up-to-date information on current internet fraud, visit the Internet Fraud Complaint Center. You can investigate current scams and also report instances of internet fraud.

You can also visit the Federal Bureau of Investigation (FBI) for up-to-date information on internet fraud as well as other common types of frauds and scams.

Another excellent site to visit is Crimes of Persuasion.

This pamphlet does not constitute legal advice. Students who are confronted with legal problems or who need specific advice are encouraged to seek assistance from a licensed attorney at Student Legal Services.


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