By Katherine Ward
11 March 2004

Internet scams are costing Americans more than $6 million per year - this is up nearly $3.5 million from 2000, according to the National Consumers League. That’s an average loss of $518 per person - and I don’t know about you, but my student budget can’t afford a $500 blow.

So just how are these victims being targeted? The NCL reports that websites are the most common places for frauds to contact people, but email scams are steadily increasing. In 2001, the NCL reports, online auctions duped the bulk of the victims, and accounted for 70 percent of Internet fraud.

Following way behind were Nigerian money offers and general merchandise scams, with 9 percent each. "When I was at college we worried about grades, dating and maybe a telephone scam. Today’s Web surfing college student must also be Net-savvy,’" says Amanda Spink, associate professor of information sciences and technology at Penn State University.

Avoiding Internet scams seems simple enough, but educating yourself about common fraud schemes is wise. Be wary of any of these types of offers, and pay attention to the tips that follow*:

• Website "knockoffs": Many scammers create websites that mimic popular sites or send fake emails promising big money. Any offers that sound too good to be true - probably are! If unsure, it’s a good idea to call the website’s customer service 800 number before using a credit card. "If the website or email has no contact telephone number, be careful," says Spink.
• Advance Fee Loans: College students are often bombarded with emails offering loans to people with no credit. The truth is, loans aren’t easy to get without good credit. Be careful; don’t pay upfront, don’t expect to get a loan if you have bad credit, only do business with licensed companies, know all the facts before you decide and find a co-signer if you can’t get a loan yourself.
• Business Opportunities and Franchises: While the notion of owning your own business and thus reaping all the profits sounds incredible, you may find that actually doing so is much harder than it appears. Be skeptical of email claims that you can make money easily. Request written information before you sign anything, talk to current owners, investigate earnings claims and check with the Better Business Bureau Do sufficient research and solicit professional advice before making any decisions.
• Credit "Fixing": Credit card debt is common among students and young professionals. It’s easy to get into, and hard to get out of. Be careful of promises to "fix" your credit report. Remember that no one can erase negative information if it’s accurate. However, you can correct mistakes on your credit report and explanations of your circumstances can be added. Also, be aware that it is illegal to create a second credit file, and that true credit problems require professional counseling.
• Shopping online: This is the most convenient and easy way to blow your paycheck without leaving the house. But some online retailers are just plain sketchy. Make sure you know whom you’re dealing with, and check information about how the company handles problems. Be hesitant when companies offer especially low prices or rebates that promise to cover the entire cost of the product. It’s important that you fully understand the offer, be cautious about unsolicited emails, and beware of impostors. Finally, be sure to guard your personal information and pay the safest way possible (credit cards limit your potential loss if a fraud has been detected early enough.)
• Email scam:"The Nigerian Money Offer": This was the fastest growing scam last year - someone from Nigeria or another African country sends you an email offering you millions of dollars to help them transfer money, diamonds, or other riches to your bank account for safekeeping. Nothing is safe about this! The promises aren’t true, and once you commit you can never retreat (the incessant requests for money will just have different explanations, i.e., "legal expenses".)
• Online Auctions: This method alone steals thousands of dollars from unknowing victims every year. Unfortunately, buyers frequently wind up getting something different than what they ordered or having the seller disappear with their money. Think twice if you suspect the price of that CD player is too good to be true - it probably is! Be sure to understand how the auction works before bidding anything. Then, check out the seller (be careful if they are a private individual or based in another country), and get their name and contact information. Always ask about terms of delivery, returns, warranties and service before paying, always pay by credit card, and inform the auction sites about suspected fraud.
• Other ever-present online scams: job offers, prizes and sweepstakes, student scholarships, and credit card offers.

For more information, visit Fraud.org or NCLnet.org.

*Source: NCL (National Consumers League) with the exception of Point #1, "Website Knockoffs."

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