FTC Names Its Dirty Dozen:
12 Scams Most Likely To Arrive Via Bulk Email
Email boxes are filling up with more offers for business
opportunities than any other kind of unsolicited commercial email. That’s a problem,
according to the Federal Trade Commission, because many of these offers are scams.
In response to requests from consumers, the FTC asked
email users to forward their unsolicited commercial email to the agency for an inside look
at the bulk email business. FTC staff found that more often than not, bulk email offers
appeared to be fraudulent, and if pursued, could have ripped-off unsuspecting consumers to
the tune of billions of dollars.
The FTC has identified the 12 scams that are most likely
to arrive in consumers’ email boxes.
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 of $140 a day, $1,000 a day, or more,
and claim that the business doesn’t involve selling, meetings, or personal contact
with others, or that someone else will do all the 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. Several states have laws
regulating the sending of unsolicited commercial email, which you may unwittingly violate
by sending bulk email. Few legitimate businesses, if any, engage in bulk email marketing
for fear of offending potential customers.
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 or that it’s been reviewed by a lawyer, or it may refer to
sections of U.S. law that legitimize the scheme. Don’t believe it.
The scam: Chain letters—traditional or
high-tech—are almost always illegal, and nearly all of the people who participate in
them lose their money. The fact that a "product" such as a report on how to make
money fast, a mailing list, or a recipe 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 in your own bulk emailings. If you earn any money, it will be from
others who fall for the scheme you’re perpetuating. And after spending the money and
putting in the time on the craft assembly work, you are likely to find promoters who
refuse to pay you, claiming that your work isn’t up to their "quality
standards."
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; testimonials from "famous" medical experts you’ve never heard of;
claims that the product is available from only one source or for a limited time; and ads
that use phrases like "scientific breakthrough," "miraculous cure,"
"exclusive product," "secret formula," and "ancient
ingredient."
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. Almost all of the payoff goes to the
promoters and little or none to consumers who pay to participate.
8. Investment opportunities
Investment schemes promise outrageously high rates of
return with no risk. One version seeks investors to help form an offshore bank. Others are
vague about the nature of the investment, stressing the rates of return. 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.
Promoters of fraudulent investments often operate a
particular scam for a short time, quickly spend the money they take in, then close down
before they can be detected. Often, they reopen under another name, selling another
investment scam. In their sales pitch, they’ll say that they have high-level
financial connections; that they’re privy to inside information; that they’ll
guarantee the investment; or that they’ll buy back the investment after a certain
time. To close the deal, they often serve up phony statistics, misrepresent the
significance of a current event, or stress the unique quality of their
offering—anything to deter you from verifying their story.
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 not for the 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, as well as solicitations for guaranteed, unsecured
credit cards, regardless of your credit history. 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 if you don’t meet their qualifications. The
promised credit cards never come through, and the pyramid money-making 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 from the Internal Revenue
Service 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.
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