What are the Different Types of Internet Business Scams?

Business scams are a common event, both online and offline. In recent years, the variety of online scams has increased significantly, partially due to the ever-increasing number of people who shop and do business online. Most Internet business scams are structured to prey on the hopes, dreams, and goals of individuals, or even to protect them from other scams.

One of the most popular of all Internet business scams is the offer of making a lot of money in a very short period of time. Often, scams of this type promise the victim that by taking a little time each day, they can have a successful online business that will keep earning money even while he or she sleeps. While there are a number of legitimate online business opportunities, the scams usually require the victim to either purchase products that never sell, or provide financial information that is then used as part of an identity theft operation.

Another common example of Internet business scams is the email warning. This approach normally appears to be a legitimate email from a financial institution, notifying the intended victim of a breach of his or her bank or investment account. Often, the text indicates the account is now frozen to further transactions. A conveniently included link is provided so the victim can reactivate the account, by providing data such as the full name of the account holder, account number, and perhaps some other vital information. Here again, the focus is on obtaining financial information for fraudulent purposes, such as draining bank accounts or opening credit card accounts in the victim’s name.

There are some forms of Internet business scams that actually do deliver some type of good or service, but not necessarily in the form that was advertised. A common approach is the offer of a free trial of a given service, with an option to contract for that service at the end of the trial period. For identification purposes, financial information like a credit card or bank account number is collected during the registration for the free trial. What is usually not readily apparent in the sales copy, but tends to be buried in the terms and conditions, is the fact that unless the victim specifically takes steps to order the ongoing service, the collected financial information will be used to charge the victim for continued usage, rather than simply allowing the trial account to expire. The hope is that most consumers will not read the terms and conditions of the free trial closely, and will overlook the provision about canceling before the trial period ends.

Rounding out the most common types of Internet business scams is the fake sweepstakes announcements. With this type of scam, the recipient is notified that he or she is the winner of a huge amount of money, courtesy of some type of contest, sweepstakes or lottery that is conveniently based in another country. The text of the email urges the recipient to respond with their banking information, so the money can be transferred within the next twenty-four hours. What actually happens is that the banking information is used to drain the account, and possibly utilized to establish a number of credit accounts that are then used until they are maxed out. As a result, the lucky contest winner has an empty bank account and an ever-growing amount of debt that he or she did not create.

Care must be taken to evaluate unsolicited online notifications of business opportunities, easy money, or problems with an existing account. People generally do not win contests they never enter, or are likely to become rich overnight with an online business. Financial institutions never include links in emails to their clients, and never ask for data to be transmitted outside their own secure web sites. Most Internet business scams offer something that seems too good to be true, and that is often the case. When confronted with what appears to be a scam, do not respond to the offer. Instead, research it online or report it to your bank. Your efforts will not only help you avoid being the victim of online fraud, but also possibly prevent someone else from becoming a victim.