Internet Business Scams

Internet business scams have probably been around since the first few computers were connected to the World Wide Web. They range from promises of millions for no work to check-cashing schemes. Here's how to keep safe from internet business scams and find legitimate internet home businesses.

The old adage, "If it looks to good to be true, it probably is," applies to internet business scams. Anytime someone promises you easy work for great pay, look out.

Most scams are easy to spot. A common internet business scam is the so-called "Nigerian Letter" or "advanced fee scam". Purported to be someone writing to you from Nigeria (or another country – the country doesn't matter), the writer tugs at your heart strings and asks for help. In this scam, someone wants to send you lots of money and promises you a big hefty fee for your trouble. The problem is, the money is bogus and you're left worse off than before you participated in the scam.

These scams often come via email and look like this:

"Dear sir, I am writing to you with the fond hope that you will help me. Last month I won the lottery and came into the good fortune of [an amount is named.] But I cannot cash the check. I know that you good sir are kind of heart and willing to help. I want to send you the check. You will cash it and keep [amount] for yourself and wire me the rest through a money order. I am sick with [name a dreadful disease] and [insert status: orphan, widow, poor person – something to tug at your heart strings.] I beg you kind sir to help me."

Usually sent by email, these letters vary in the details, but the process of robbing you of your hard-earned money looks like this:

• The writer asks you to accept money – usually a check but sometimes a wire transfer – for a very large amount of money.
• You are supposed to cash the check, take money out of it, and send the rest back.
• The letter writer includes details of illness, bad luck, or something else to make you feel sorry for him or her.

What usually happens after you fall for such a scam is one of several bad things:

• The check bounces and you are left paying back the bank ALL of the money and fees.
• The scam artists hack into your bank account and steal your money, your identity information, or both.

Think this can't happen to you? Many people just like you have been tricked. To learn more about these types of scams, please see: this paper published by the U.S. Department of State warning about the various advance-fee scams and how to spot them.

In addition to direct pitches to lure you into parting with you hard-earned money, there are some new internet-based scams to watch out for. These include:

• Craft assembly: You may see ads, typically aimed at work at home moms (WAHMS), to assemble crafts or kits at home. The companies promise that you will be able to assemble kits or craft items in the comfort of your home. They accept the assembled crafts "if they meet certain standards" and you are paid. You pay the company for the craft kits. The problem is that you will NEVER see a craft that meets their standards; they have the legal right to refuse everything. They actually make their money selling kits. Beware of these scams.
• Envelope stuffing: A few opportunities are legitimate, but these typically pay a dime or nickel per envelope. Anything promising a dollar or two per envelope or asking you to pay money up front is probably a fraud.
• Become an associate: Many of these ads are legitimate ads for MLM (multi-level marketing) companies. Some offer recognizable products. Others ask for payment up front, promising you a kit with all you need to get started. The trouble is that after you've sent in your fee, you get a kit that tells you…how to recruit more people. There's nothing to sell. That's a scam. A legitimate company has products you can sell. While you also make money from recruiting new sales associates, you earn a commission on reputable products such as vitamins, makeup, cleaning supplies or other useful products.

Generally speaking, internet scams include one or more of the following:

• Promises that for a little money upfront, you can make a fortune later.
• Promises that you can make millions for little or no work.
• Requests for money upfront to get more information about the opportunity.
• Company has been in business less than six months – or you find no information at all about the company.
• A personal email from someone you don't know asking you to wire money, cash checks, or get involved in a business deal.

If it looks too good to be true – it probably is.

And just as important as recognizing scams is recognizing legitimate opportunities. If you're interested in an internet opportunity, legitimate opportunities often include the following:

• You can easily find information about the company online, or call them and find out more information.
• They ask for no money upfront.
• They send you information through the mail about the opportunity – you have the agreement in writing.
• They provide testimonials and invite you to actually contact people in the testimonials.
• There are no complaints lodged against them.
• They do not promise you millions, easy work for no pay, or any other pie-in-the-sky promises. Instead, they are clear about the work and potential, but stress that it is up to you.
• They are endorsed by legitimate organizations or on well-trafficked work from home websites with someone screening the opportunities, such as Work Home Union.

For more information on these and many other scams, please see:

• U.S. Federal Bureau of Investigations (FBI) provides tips on avoiding numerous online frauds and scams.
• Scam Busters lists dozens of work from home and internet business opportunities that are scams or at least borderline fraudulent.
• A Friend in Business is a former college professor and person who has been scammed who has devoted a huge website to helping people recognize and avoid internet business scams. A must-read for anyone seriously looking to make money on the internet.

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