FTC to Crack Down on Web Scams
Getting stiffed at an Internet auction. An “all expenses paid” hotel that turns out not to be free. An offer for free adult material on the Web that secretly runs up a hefty phone bill.
The government cited these gimmicks Tuesday as it posted its first top-10 list of Internet scams that Americans should avoid and vowed to work with overseas law enforcement to crack down on Web con artists.
“The Internet has changed the way consumers gather information, shop and do business,” Federal Trade Commission Director of Consumer Protection Jodie Bernstein said. “It’s also changed the way law enforcers and consumer protection agencies do business.”
Several of the FTC’s “dot con” scams are old tricks reincarnated on the Internet. Miracle products, credit card theft and old-fashioned pyramid schemes are getting a new life online, officials said.
Worries about Internet thieves have slowed electronic commerce since its inception, but more consumers are gradually warming to the idea of Internet purchases. The FTC’s new consumer protection effort is intended to keep criminals from undermining that trust, officials said.
The agency said the government has brought 251 lawsuits against online scammers in 2000.
The agency also warned that scammers are targeting small-business owners and stock traders. Some consumers have used day trading services that promise things such as “huge returns” in predicting the market but later find the claims inflated.
Titan Business Solutions, a California company, was sued after it advertised for medical billers that could work at home and earn up to $45,000 per year.
Customers who called Titan were asked to send more than $300 to the company in exchange for some software and motivational tapes that they couldn’t return, the lawsuit alleges.
There was no phone or e-mail listing for the company.
The FTC also alleged that a group of affiliated Arizona companies sent $3.50 “rebate” checks to consumers. When the checks were cashed, the consumers unwittingly agreed to allow the defendants to be their Internet service provider.
RJB Telcom of Scottsdale, Ariz., was sued along with its principals for offering a free “viewer” or “dialer” program to access free adult material.
The government alleges that without consumers’ knowledge, the program disconnected the user’s computer from their Internet provider and made an international call--typically to the Caribbean--to another Internet provider. Consumers unwittingly racked up large long-distance charges, the government alleged.
