Internet Business Opportunity Scams

Dot-Com or Dot-Con?
About Internet Business Opportunity Scams

There are many Internet business opportunities that exploit the novelty of the Web as a lure. If you nibble, they'll further bait you with promises of freedom, esteem, high income and the good life. For a fee, they'll set you up with a company-sponsored, duplicate Website, along with products or services to sell. But many will also offer you incentives to recruit others to pay the fee, which is really what these so-called opportunities are all about. They are among what the U.S. Federal Trade Commission cleverly calls Dot Cons.

The real business of these types of dot-cons is not wholesaling products or services. It's selling the concept of the scheme itself, and duping you into reselling it for them. But by law in most U.S. states, one can't profit from recruiting, with nothing changing hands but fees and commissions for the scheme itself. That's illegal pyramiding. To get around it, these dot-cons sell tangible, "distributorship" Websites on which to seemingly resell their products or services. But a closer look reveals that, what's really for resale, is the distributorship itself over and over again.

It's all just a guise for a relatively new twist on an old scheme called multilevel marketing (MLM) or network marketing. One of the latest twists is exact method marketing (EMM). It's touted as a revolutionary idea that eliminates the flaws in MLM. But it's little more than refurbished hype for the same ol' scheme. They all use some form of pyramiding to resell the scheme itself, some by exploiting loopholes in the law to recruit through a backdoor, others by breaking the law until they're busted. Regardless, they are often formulas for failure, except for the people who created them. They're at the very top of the pyramid, the only place to be―if you're going to run a scheme, that is.

Even if products and services are more than just a hook to resell the scheme, often the dot-cons are not really wholesalers as they might claim. They are extra middlemen between wholesale distributors and you, and you can bet they're taking an extra cut too. Another dot-con trick of the trade, is to "borrow" the reputations of well-known merchants, financial institutions and such, by offering referral (affiliate) deals with them. But affiliate deals are all over the Web, and just about anybody with a Web site can sign up for free. Again, the dot-cons are often unnecessary middlemen taking an extra cut. As a result of these tricks, you'll likely have to gouge absurd retail prices from your customers to earn any margin at all, share your meager referral commissions with unnecessary middlemen, or both.

Web-savvy shoppers would likely be hesitant to submit their credit card numbers to reputation-unknown shopping sites, especially those that also hype get-rich-quick schemes. Additionally, you'll be competing with hundreds to thousands of others who paid the fee too, and are attempting to sell the exact same products or services and the scheme itself, on identical, company-sponsored Websites. It sounds good on the surface when dot-con hype promises "free training" in marketing and sales techniques. But the fact of the matter is, those with duplicate Websites are your direct competitors, and they too are learning the same techniques.

Internet business opportunities also tend to hype the ease of online marketing and popularity of shopping on the Web (e-commerce). Granted, online marketing has a broader reach than most traditional methods. It's also true that e-commerce is a growing, multi-billion dollar industry. But that very reach and popularity makes the Web a highly-competitive place to do business, and it gets more so everyday. Many failed dot-coms will attest to that. Despite that some had millions in venture capital to finance far more marketing resources than home-based Internet businesses typically can, they failed.

Among the biggest dot-con hypes is getting "free advertising" in "hundreds" of search engines. When starting up a small businesses, you likely won't have much of an advertising budget. So, free advertising might sound good, and you can bet the dot-cons know it does. Because search engines are the "Yellow Pages" of the Web, it's true that they are the main source of Website traffic. But the reality is, there are only a handful that deliver significant traffic, such as Yahoo, Excite and Google. The rest of the "hundreds" are relatively inconsequential for marketing.

To get a free listing of significance in the popular handful takes search-engine savvy―a whole 'nother ballgame―and lots of hard work, such as keyword and meta tag optimization. If you don't know what a keyword or meta tag is when you pay the fee for an Internet business opportunity, you're already in trouble. Again, if the dot-cons promise to teach you the techniques, remember that they're also teaching your direct competitors. Besides, no matter how much training a seller of duplicate Websites promises, many of the popular search engines won't list identical sites or those that are even close. Search engines call them mirror sites, and consider multiple submissions of same to be redundant. Some won't list get-rich-quick schemes either, for obvious reasons.

"Build it and they will come" doesn't work nearly as well as the dot-cons would love for you to believe, so they conveniently fail to mention these and other inherent flaws. Natch, it's to their advantage to make it sound far easier than it is. They'll say anything to get your fee, their main source of income.

The Bottom Line of Internet Business Opportunity

Often, after the people who buy into these dot-cons have tapped out their friends, relatives, neighbors, church comembers and everybody else they know, they soon realize that the so-called Internet business opportunity was not the piece of cake the hype made it out to be. According to an article about MLMs by Small Business Advisor, Dr. Judith Kautz, "There are countless stories of folks who have destroyed their social foundation through pressuring friends and family to buy their products."

After the product or service phase fails, the only way left for them to recoup their investments or make what little money they can, is to dupe others into paying the fee, the same as they were duped. But they soon realize that's not easy either, as it'll take a lot of dishonest, "network marketing" legwork. Those with a conscience usually just give up at this point, eat their losses and learn a lesson the hard way.

But there are some who still don't get it, even after they've ticked off everybody they know. Sadly, scam artists turn otherwise ethical people into scam artists too, whether or not the otherwise-ethical realize it. Dr. Kautz indicates that they are so brainwashed by the hype, it becomes a cultlike obsession. She says, "Members mouth company mottos with no conscious awareness of how ludicrous the claims may be."

You've probably seen their "Wonderful Opportunity" and similarly-titled posts in forums that allow it. (The Job Searching: Technical Forum doesn't.) Besides their typical ambiguous hype about all the "wonderfulness" with no mention of the inherent flaws and risks, the URLs they provide are one of the clues that they're duped "cultists" attempting to dupe others into an Internet business opportunity scam. The URLs terminate in tags that credit them with a chunk of your fee, should you bite the bait. For example,

http://www.getduped.com/?id=maryq123

Where ?id=maryq123 is the tag. They likely also get a cut of your future sales, as your "sponsors." In other words, you'll help them move up the "pyramid" at your expense.

Others are just unoriginal and lazy con artists, looking for an easy ride at your expense. They could care less about selling products or services and have joined several, dupe-others-in Internet business opportunities. They'll say just about anything to get their cut of your fee. Some will even act hurt or angry if you question their motives. But con artists really don't give a hoot what you think about them. It's all just part of their bait-and-hook campaign.

How to Avoid Internet Business Opportunity Scams

This is not intended to discourage you from starting up a home-based Internet business, but rather just to give you a heads up about the too-good-to-be-true, Internet business opportunity scams. There are legit small businesses that have successfully carved out or exploited Internet niches that are not yet saturated, one of the real "secrets" to success. But, as does just about any other entrepreneurial endeavor, it takes hard work, knowledge, dedication, cash flow and resources. (An understanding significant other helps, too.) There are few quick and easy ways to make money on the Internet, at least not honestly.

Granted, there are people who've had success with Internet business opportunity scams, if duping others in defines success. But for every so-called success, there are hundreds of people who aren't, because the hype misled them into believing that it was far easier than it really is. Don't be fooled by
• Testimonials
• Guarantees
• Documented "proof"
• Huge income potentials

And more hype, like "Get out of bed when you want to!!!" and "Work when you want!!!" Who among your customers will understand that you didn't ship their orders on time, because you chose to sleep in? How many people earn huge incomes by being lazy? To succeed at a dot-con, you must be selling, scheming and conniving all of the time. In fact, dot-con or not, Internet businesses take orders 24/7, which is pretty much the whole idea. So, you likely won't be sleeping in much or taking many days off, until you can afford a staff to take over. But how many years will that take, even for a legit Internet business?

It's all just bait conceived by con artists, who care only about parting you from your money. Ethics don't come into it. (For more about con-artist tricks, click Work-at-Home Job Scams in the sidebar.) The predators who run Internet business opportunity scams count on a new sucker being born every minute, and thrive on the naive, wishful and desperate. Stay-at-home moms, the elderly, and physically-challenged people who need money most are among their prime prey.

The 5 Most Common Business Scams And How To Avoid Them

The 5 Most Common Business Scams And How To Avoid Them

Scam artists are getting more and more adept at exploiting the weaknesses of small businesses. While some of these business scams are golden oldies, they’re still putting money into scammer’s pockets – and out of the pockets of many small business owners. The best defense against scams is awareness and vigilance. Here are five of the most common small business scams and how to avoid them.

1. Advance Fee Loan Scams.

Whether it’s offered in a newspaper ad, on the Internet, or by email, this scam offers money at reasonable rates – if you send them money. They may say they need the money for insurance purposes or to get the money across the border. Whatever the reason, you’ll never see that money again – or the money they were supposedly going to loan your business.

How to Avoid This Scam: Be aware that it is illegal in both Canada and the U.S. to ask for money up front for a loan. If you’re asked to pay anything before you’ve received an agreed-on loan, walk away.

Related Scam: Bogus Equipment Leasing Deals – Your company gets a letter saying that you’re pre-approved for leasing. All you have to do is send in your first (or your first and last month’s) payment. The scam is that you never receive the equipment you were expecting to lease.

2. Fraudulent Billing Scams.

Your business receives an invoice for goods or services that you haven’t ordered. The hope of the scammers sending these out is that your business will just pay up. Easy money for them. Easy loss for you.

How to Avoid This Scam: Examine your invoices carefully. Educate your staff about phony invoices. Set up your payables system so that at least two people must authorize any payments.

Related Scam: The Surprise Cheque – Your business receives a cheque for a small amount. The catch is that the cheque is actually a “promotional incentive”. If you cash it, the company will claim that you’ve agreed to whatever terms are printed on the back of the cheque, and start the billing process immediately.

3. Business Identity Theft.

Identity theft itself is the fastest growing fraud in North America, according to the Better Business Bureau, and business identity theft is growing apace. Just as someone can steal your personal identity, your business’s identity can be stolen. Once stolen, the thieves can use your business name and financial information to open a bank account and run up expenses.

How To Avoid This Scam: Take steps to protect your business data. Shred all your discarded paper, including anything that has your business name on it. Be careful when responding to email asking you to do such things as verify your account. Be wary about information you give out over the phone.

Related Scam: Phishing – Internet “come-ons” that trick consumers and small businesses into providing bank or other financial information.

4. Work-At-Home Scams.

Preying on people who want to have home-based businesses, these scams offer the opportunity to “make big bucks” working at home. Sometimes the ads say all you have to do is own a computer. Other times, the work-at-home scam involves stuffing envelopes or assembly work. The scam is simple; you pay for the information or the materials you supposedly need. Rather than being the key to making money, what you get is useless.

How to Avoid This Scam: Don’t bite. These are not profitable opportunities; the only ones who make money from them are the scammers. If it seems too good to be true, it is. You never have to send money to get information about legitimate business opportunities.

5. Credit Card Scams.

Fraudulent use of credit cards is also on the rise. In the standard credit card scam, someone will call and place an order, offering to pay with fraudulently obtained credit card information. The business fills the order, but later is informed that the credit card was stolen and the amount of the transaction will be charged back to the business’s account.

How to Avoid This Scam: Always use due diligence to ensure that orders are legitimate. Be particularly leery of overseas callers, new callers placing large orders, and/or callers requesting rush shipping. If you are suspicious, ask the customer for the name of the credit card’s issuing bank and its toll-free customer service number which is printed on the back of all credit cards. Tell the customer you will check with the bank and call him back.

Sick Scam Twist: Overseas credit card thieves are using the TTY phone service for the deaf and posing as hearing-impaired callers. These scammers use the TTY relay operator to place an order for multiple high-end items.

INTERNET CRIME PREVENTION

The Internet places a vast amount of information and exciting experiences at your command. With the click of the mouse, the Internet allows you to buy an airline ticket, book a hotel, send flowers to a friend, or purchase your favorite stock. However, as the legitimate use of the Internet increases throughout our nation and the world, the wrongful use of the Internet to commit crime and victimize people also increases. The following Internet crime prevention information is meant to help you protect yourself, your loved ones, your friends, your neighbors and your community, and to make your journey on the Internet as safe, secure and crime free as possible.

Common Internet Crimes :

Child Exploitation

Children can be sexually exploited, kidnapped, molested and solicited by individuals using online service. One reason is the anonymous nature of the Internet. Another reason is the large number of people using the Internet. Pedophiles will make contact with victims by having children call collect so the pedophile's telephone number will not show up on their parent's telephone bill. Pedophiles will also purchase a prepaid telephone card and give children a toll free access number enabling children to call from anywhere they choose. Pedophiles will often convince children to send them a photograph. Pedophiles will offer children money for their photograph and/or pose as professional photographers to obtain nude, graphic or sexually explicit photographs of children. Pedophiles commonly attempt to lower the inhibitions of children through deception in an attempt to lead children into their sexual conversations or acts. There are a number of ways parents can protect their children from becoming victims of pedophiles on the Internet.

The following are some examples:
• Choose an online service that offers parental control features;
• Purchase blocking software and design your own safety system;
• Monitor children that are online and monitor the time they spend online;
• Ensure children never reveal identifying information about themselves on the Internet in a public chat room, on an electronicbulletin board or in their E-mail messages;
• Ensure children do not give out personal information about themselves such as their age;
• Consider using a pseudonym or unlisting your child' s name;
• Get to know the services your child uses;
• Block out objectionable material through your Internet service provider;
• Never allow a child to arrange a face-to-face meeting with another computer user without parental permission;
• Ensure children never respond to messages or bulletin board items that are suggestive, obscene, belligerent or threatening;
• Encourage children to tell you whenever they encounter such messages;
• If you or your children receives a message that is harassing, sexual in nature, or threatening, forward a copy of the message to your service provider and ask for their assistance;
• If you become aware of the transmission, use, or viewing of child pornography while online, report it to the National Center for Missing and Exploited Children;
• Teach children that people online may not be who they seem;
• Teach children online service providers never ask for passwords and they should never give their password out;
• Teach children that everything they read or see on the Internet may not be true;
• Teach children to never let anyone pressure them into doing something they feel uncomfortable doing;
• Teach children to never enter an area on the Internet that charges for services without asking permission from a responsible adult first;
• Some children have access to the Internet at school. Check with the school authorities to ensure your children are properly supervised and monitored by a responsible adult;
• Know your children' s friends and their parents.

The Pump And Dump

This is a stock scam. Messages are posted on the Internet urging readers to buy stock quickly that is poised for rapid growth. The message writer often claims to have inside information about an impending development. The reality is that the writer stands to gain by selling or buying stock shares after the price goes up or down. This ploy is normally used with unregistered, little known, thinly traded stocks.

The Hijack

The Hijack is relatively new form of fraud unique to the Internet. Consumers are prompted to download a purported “viewer program” to see computer images for free. Once downloaded, the consumer's computer is “hijacked” by the viewer program which turns off the consumer's modem speakers, disconnects the from local Internet provider, dials an international number and connects the consumer to a remote site. The expensive international costs are charged to the consumer's telephone bill until the telephone us turned off.

Pyramid Schemes

Pyramid schemes are similar to multi-level marketing. Pyramid schemes provide financial incentives to recruit new distributors. They are generally prohibited because it is a mathematical certainty that the pyramids will collapse when no new distributors can be recruited. When that happens, most people lost their money. The Internet offers a fast lane for pyramid builders by facilitating a large-scale recruitment pool in little or no time. Be extremely cautious if a promoter offers you an extremely large short-term return on any investment, particularly if there is a disclaimer that the investment is “high-risk and you could lose all of you money”. Additionally, if there are no written claims delineating the return on other's investments, you are quite possibly looking at a pyramid scheme. Beware of all get rich quick schemes. If a deal seems too good to be true, it probably is.

Gambling

One of the greatest potential dangers for fraudulent loss posed for people using the Internet is gambling. There are as many as 200 gambling sites on the Internet. Consumers can gamble on sports, blackjack, keno, roulette, etc. Gambling on the Internet is especially risky because gambling is an unregulated industry and currently, there is no effective way to control it. Companies based in foreign countries using foreign bank accounts are able to easily bilk consumers out of their money. Many times Internet “gamblers” are unable to contact the companies with whom they placed their bets to collect their winnings. Gambling on the Internet exposes consumers to fraud, civil liability and possible criminal liability.
Online Auctions
Online auctions are popular to many people who use the Internet. Generally, online auctions are person-to-person sales where individuals bid for various types of merchandise. The highest bidder then pays in advance of receiving the merchandise. A growing priblem is sellers failing to deliver merchandise that consumers have purchased.

Fraud

Internet fraud takes many forms. The Internet' s promise of substantial consumer benefits is coupled with the potential for fraud and deception. Fraud operators are opportunists who are among the first to appreciate the potential of a new technology. There is nothing new about Internet fraud, however, the size and potential market, relative ease, low cost, and speed with which a scam can be perpetrated has increased tremendously.

Unsolicited Commercial E-Mail

Internet service providers report handling 60 million electronic messages per day. Estimates of Unsolicited Commercial E-mail (UCE) indicate it comprises as much as one-third of the total E-mail traffic. This ever-increasing volume of UCE strains the capacity of online service providers and threatens the development of the Internet as a conduit for commerce. Beyond the sheer volume and potential annoyance of UCE, many UCE messages may also be misleading or deceptive.

Teaser Pages

The Internet is rife with fraud and deception. Some web pages "tease" individuals with promises of easy money for little or nothing. These scams include phony scholarships, travel programs, weight loss programs and others.

High Pressure Sales

A high-pressure sales pitch may sound exciting, however, as a rule, such a pitch should be resisted. Before you invest any money, take your time. Get a second opinion from a financial planner, an attorney, or an accountant you can trust. Finally, research the company's reputation. Call your local consumer protection agency in the city where the company is headquartered for more information.

Following are lines frequently used by scam artists:
• "We don't make money unless you make money."
• "I know you get offers everyday from people who tell you they're going to make you rich. I can make it easy for you to make your decision based on actual facts."
• "This opportunity is the best chance to make extra money for guys who work for a living; guys like you and me."
• "I've been in this business for 20 years and I can tell you this;
• I know of no other program that is legal, easy to afford and can bring in this kind of big money from such a small investment."
• "I know this can work for you and I personally guarantee your success, right down to the last penny."
• "Give me one percent of your trust and I'll earn the other 99 percent when you see the return."
• "Of course there is a risk, there is a risk in everything."
• "Sure we could finance this venture ourselves, however, we're trying to build a power base for the future for folks like you."
• "We're talking about a cash cow here, it's going fast and I need your check tomorrow at the latest."
• "I can't be lying, there are laws against lying." The Risk Free Scam Many times this scam solicits its victims with exotic-sounding investments such as wireless cable projects, prime bank securities or fictitious business ventures overseas. Promoters misrepresent risk to "investors" by comparing their offer to something safe, such as bank security deposits. Many times the investment offer never really exists.

What is Cyber harassment?

Cyber harassment is an immoral behavior by someone or a group, who uses technology such as computers, internet or mobile devices to send disturbing messages to bother, humiliate, threaten, or stalk someone else. The schemes used consist of emails, instant chat messaging, blog message, text messages sent via cell phones, digital photos, videos and all other means of electronic communication.

The types of content a cyber harasser may send include the following:

* offensive and confrontational message
* foul words, cruel, hateful, and insulting remarks
* threats, intimidations and false promises
* scandals or rumor mongering

The methods a cyber harasser could use to bother the victim may include the following:

* publication of secrets or embarrassing situations, including pictures or videos, for everyone to see and hear
* publication of gossip or rumors for the explicit purpose of damaging the person’s character
* sharing of messages pretending to be the victim in an attempt to damage that person’s morality, friendships, family or work reputation to result in the separation of the victim from friends, co-workers and family

Who are Cyber Harassers?

In some cases, a cyber harasser can also harass in face-to-face encounters. Harassing over the computer may be a natural extension of their disturbing behavior.

Some people who become cyber harassers may be the victims of harassment and are taking out their anger and frustration in the internet. They may be targeting the people who harassed them or they may have picked a different target.

Still others regard cyber harassing as a game or joke -- nothing more than a fun thing to do.

Who are the Victims of Cyber Harassment?

Majority of victims are children and the youth but there are also adults who are cyber harassing grown-up victims usually women in the workplace.

Generally, cyber harassers know their victim, but rarely do they pick victims they don’t know. In these situations, the cyber harasser is picking on someone based on a type of bias or prejudice. They may pick on people based on religion, race, gender, sexual orientation, or people who are considered different from their point of view.

Other times, they will pick on someone based on a message that he or she has posted or sent that the harasser doesn’t like.

Why Can Cyber Harassment be as Harmful as Physical Harassment?

A lot of people mistakenly think that “words, pictures or videos can never hurt.” In the internet, on the other hand, cyber harassers can conduct harassment at any given time and place, thanks to modern technology. As long as the victims are identified and online, they are open to cyber harassment.

People who commit cyber harassment pick on an individual just for the feeling of power that it gives them, financial gain or favor. Because the Internet seems to give anonymity, cyber harassment is often seen to have less liability to the cyber harassers, which can encourage them to continue and be aggressive.

An additional characteristic of internet that can lead cyber harassment to be as harmful as a physical harassment is that cyber harassers aren’t physically there when they are harassing their victims which can lead to a lessened consideration. Since the harassers cannot see how much they are hurting the victims, they may think they have not actually hurt them much or at all and may, therefore, continue the harassing behavior.

Some individuals believe that there are no rules in cyberspace. They feel free to do whatever they wish. Moreover, they believe they have the RIGHT to do whatever they want in cyberspace without accountability or consequences.

Some of the victims of cyber harassment, who are unable to handle it, either retaliate violently or in extreme situations commit suicide due to severe humiliation.

Warning Signs Your Child may be a Victim of Cyber Harassment

If your child exhibits the following, it may be a warning sign:

* displaying signs of depression, sadness, nervousness or fear – particularly if these signs intensify after your child uses the cell phone or after being online
* avoiding friends, social activities, or school
* experiencing difficulty with school or a drop in grades for no apparent reason
* expressing slight comments that indicate your child is disturbed or upset

What to do if a Cyber Harasser Targets Your Child

Revenge may only escalate the problem. If you feel the need to respond to a cyber harasser, help your child develop appropriate preventive actions by asking if possible the parent or guardian of the child who does cyber harassment to stop the misbehavior.

By filtering email, instant messages and text messages and blocking mobile numbers, you can cut off many of the ways they can contact your child. By having your child avoid the sites and groups where the attacks occur, he or she can ignore the cyber harasser.

In case harassment continues, then you can change your child’s email address, Internet account, mobile number and username(s).

If none of these steps are successful, you may need to take additional legal action, as follows:

1. Compile a copy of all harassing messages and postings. Save the addresses of web sites where other hostile information, embarrassing pictures or negative messages are posted. The more documentation you have the better.
2. Contact your child’s school. Even if the cyber harassment is not occurring in school, officials might be able to assist.
3. Contact the child’s parents or guardian by sending a formal letter, face to face conversation detailing the harassment messages sent and asking them to make it stop. The parents and their child could be liable for civil or criminal offenses due to emotional damages.
4. Finally, if the situation is not resolved, or if physical threats are made, contact the nearest PNP police station in your area.