Steer Clear of Scams

Provided by Symantec™

While most of the millions of businesses who call the Web home are legitimate, trustworthy companies, you may come across a scam in your dealings online. The Internet's inherent nature makes it easy for these errant entrepreneurs to start a business scam — and difficult to catch them. It is inexpensive to set up a storefront online, and cheap to acquire untargeted bulk mail lists for email marketing. And a professional–looking Web site can fool even experienced business owners.

It can be difficult to catch online scam artists in the act because the digital trail they leave disappears quickly — in as little as a week, depending on how long an ISP keeps a log. It also takes a lot of technical expertise to track these swindlers, providing a challenge for fraud–related crime units. Special legal processes are required to obtain the evidence needed for online fraud investigation because of complex user privacy rights. There are no geographic boundaries, which means prosecution requires dealing with different jurisdictions and legal procedures. Scam artists are encouraged by these factors, hoping that setting up shop on the Web will prove easy and profitable.

Small businesses as the target

Some scam artists specifically target small businesses. A few of the factors that make small businesses susceptible is that they:

• May have less experience. Scammers prey on the inexperienced — those new to the Internet or the business who may not know how to avoid scams.
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• Don't have a full–time legal staff. Most small businesses don't employ a full–time legal staff that could investigate possible frauds or prosecute a scam once it has been committed. While small business owners may be able to perform these functions themselves, scam artists rely on hoping that business owners won't have time to pursue them while running the business.
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• Need financial backing. New and potential small business owners are often in the market for some sort of financial backing to get their feet on the ground. Whether to set up shop, acquire new computers, inventory, or employees, small businesses need capital to begin and maintain business. Online deals offering "free money" and upfront cash can be tempting for the small business owner.

The nature of scams

• Funding and "free money" scams. In this scam, advertisers offer "registration" or "information" relating to government programs you might qualify for. They require a fee charged to your credit card, in exchange for a gateway to the secrets of government programs or other sources of free money for small businesses. They may claim the fee is for processing your application, which is required to claim this free money. The credit card transaction takes place over an insecure server, and the company soon disappears, abuses the credit card information, or simply does not deliver the product they claimed they would.
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• Pyramid schemes. In the illegal pyramid scheme, investors recruited early are paid with money from investors recruited later, but eventually it becomes impossible to have enough recruits for the payment structure to work, so the scheme collapses and most of the investors lose the money they've put in. An "investment strategy" that requires you to invest a large sum of money and recruit others to do the same is probably a pyramid scheme. You can get more information at the Federal Trade Commission's Tips to Avoid Pyramid Schemes.
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• Stock manipulation. The distribution of fraudulent company information can affect stock prices — to the scam artist's advantage. The false information may warn of bankruptcy or acquisition, affecting the price of stock. If you invest in stocks with your small business revenue, be aware of this scam. Check your sources carefully when you receive stock tips or news.
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• Internet auction fraud. While you may find online auctions a useful way to obtain reduced–price goods for your small business, be cautious when conducting transactions on auction sites. While most auctions featured at reputable sites are genuine and trustworthy, this form of online trade gives scam artists the opportunity to take advantage of buyers. Thoroughly read the auction site's agreement to be sure you will be protected in the case of a scam, such as no–show products or fraudulent use of your credit card. Make sure the site you are using offers secured payment options. Finally, be sure to keep hard copies of all bids and transaction confirmations.

Resources to help you spot a scam

There are many resources available that you can use if you have questions about the legitimacy of a business. If you'd like to learn more about a venture you're considering, the Internet offers many opportunities to research businesses further. A few of these resources are:

• The Government has many resources for small business owners and those concerned about fraud or Internet scams.

• National Fraud Information Center provides valuable resources for all kinds of scams.

• Federal Trade Commission is available to take complaints or report illegal or deceptive online practices.

• Internet Fraud Complaint Center features a File a Complaint page. The FBI and the National White Collar Crime Center have joined forces to provide this resource.

• The BBBOnLine® Reliability seal program if the Better Business Bureau system's reliability assurance program for the Web. Qualifying companies post the BBB seal on their website. The seal allows web shoppers to check BBB information on a company and be assured the company will stand behind its service.

• VeriSign® can help you determine if the site you are about to do business over is secure. Sites that are members of the VeriSign Secure Site Program allow you to learn more about them before you submit any confidential information. Using VeriSign, you can verify that the site is secure, so transactions will be encrypted to protect your personal data. VeriSign will also confirm the owner of the site and its physical location

Steering clear of scams

The Internet is a useful business tool, and there are many reputable businesses online. You may, however, occasionally come across a deal, offer, or company that seems too good to be true. Here are a few guidelines to keep your small business safe from scams:

• Use common sense. If a deal seems to good to be true, it probably is.

• Beware of bulk email. Bulk email that uses copious capitalization and heavy–handed punctuation are a dead giveaway for offers that are too good to be true. For example: "APPLY NOW!!!!!!! EARN $$$$$ FOR YOUR BUSINESS!!!!" This type of aggressive marketing probably isn't the sign of a reputable company or legitimate offer.

• Watch out for anonymous addresses. Also beware of anonymous email or addresses that appear to be randomly generated, such as "j2g4tu35@1bestnetdeal4u.com." Senders of unsolicited bulk email — spammers — use this tactic to avoid being blocked by Internet service providers and individual users.

• Bring back up. Print a hard copy of online transactions. If you take advantage of an online offer or purchase, print the confirmation page, including the URL for the offer, time and date, transaction amount, and any other relevant information. You will need this information later if the deal turns sour.

The Internet is an easy place for scam artists to lurk about anonymously, taking advantage of small business owners and others in need of capital or goods and services. The Internet is also a vast resource if you're in search of ways of saving, earning, and acquiring money for your small business. If you are wary of deals too good to be true, and investigate the claims of a company before providing your hard–earned cash, you can steer clear of Internet scams.

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The information contained in this article is only an overview of the subject matter made for general guidance to the reader, and is subject in all cases to limitations and disclaimers set forth in Staples' Legal Terms and Conditions.