email spam

Introduction

While e-mail serves as the method of initial contact in only 9 percent of reported Internet scams, the Federal Trade Commission has identified a full "Dirty Dozen" of scams "most likely to arrive via bulk email spam in your e-mail box." Online auctions, which are the Internet activity that accounted for the most fraud -- 89 percent -- last year, don't appear on this FTC list because most don't actively solicit bidders via e-mail. Most people find the auction sites by themselves. However, some individuals offering merchandise at auction, especially those running a scam, do make e-mail solicitations, usually via bulk e-mail.

Some most common web hoaxes are given below:

Business Opportunity Hoaxes

These are offers that claim you can start a business or earn piles of money without really working hard, making lots of sales, or risking any cash. Most are illegal pyramid schemes, sometimes masquerading as multilevel marketing (MLM) organizations. In a true multilevel marketing company, you make your money by selling products or services. In a pyramid scheme, people pay money for the right to sell a product/service and for the right to benefit by recruiting others into the organization.

Pyramid schemes usually have the following characteristics:

• Claims that you can make thousands of dollars in a very limited amount of time.

• A significant commitment on your part to bring other people into the organization.

• An emphasis on continued recruiting vs. selling a product/service.

• A requirement to buy substantial amounts of inventory for membership or promotion -- usually with no clear "buy back" policy!

Often short on details and long on promises, many e-mails touting business opportunities contain a telephone number to call for more information. This opens the door to two additional scams, one where the call-back number is actually in a pay-per-call area code. The call charges are then "crammed" onto your existing phone bill, and you may not even know you've been scammed. Modems can even be induced to dial back for dollars. Some e-mails include a link to a "better" viewer or "better" soundcard that you can download for free. But the downloaded software hijacks your modem, disconnects the PC speaker, hangs up the local ISP connection, and dials a high-price international modem connection, which stays open even after the user leaves the site. Again, the charges come through on your phone bill.

A second scam occurs when you call the number as requested and leave your name and phone number, which the holder then sells to telemarketing firms. The call you get back is from a salesperson with a pitch. The perpetrators of these "business opportunities" obviously think you're a business opportunity

yourself.

Make Money By Sending Bulk E-Mail

These good people want to sell you millions of e-mail addresses, along with either the spamming software or services to send spam on your own behalf to those millions. Even if you have a legitimate product to sell and think your target market's inbox is the best place to sell it, you should know that sending bulk e-mail violates the terms of service of most Internet service providers, so your ISP may shut you down.

Some spamming programs allow you to insert a false return address into your solicitations, which can land you in legal hot water with the owner of the address's domain name. Finally, several states have laws regulating the sending of unsolicited commercial e-mail that sending bulk email spam of any kind may violate. In general, advertising via e-mail is illegal unless the recipient specifically asks for information. The perpetrators of this scam think you're a techno-geek who's happy using technology most people hate just to further your business.

Chain Letters

Perhaps the most famous scam of all, and ready for another Millennium, thanks to e-mail. All you do is send a small amount of money, or some item, to four or five names at the top of a list, with a message urging the recipients to forward the message on -- sometimes via bulk e-mail --making sure your name appears at the bottom. Nearly all these letters include an impassioned claim that they are legal, but they're not. Here's what the Post Office has to say about chain letters: "Chain letters are a form of gambling, and sending them through the mail (or delivering them in person or by computer, but mailing [payments or items] to participate) violates Title 18, United States Code, Section 1302, the Postal Lottery Statute." Chain letters are illegal if they request money or items of value and promise a substantial return to participants -- even if a product, like a report on Internet businesses -- is involved.

According to the FTC, nearly everyone who participates in a chain letter involving cash or merchandise loses money. Actually, the whole premise of chain letters, the promise of ever-growing returns that makes it sound so workable, is mathematically flawed. If you've got a head for numbers and understand exponential calculations, you'll find that if you start by sending money or merchandise to five people, counting on each of them to send money or merchandise to five other people, it takes just 15 interactions for the total number of participants needed to keep the scheme going to reach 6 billion. The earth's entire population didn't hit that number until last November. In short, only the first names on the list stand a chance of making anything off such a scheme. And who's to say that the first four, or 10, or 12 people ahead of you aren't all the same person? People who send you a chain letter, even via high-tech e-mail, must think you were born yesterday -- or they were born yesterday themselves.

Work-At-Home-Schemes

Work-at-home schemes have proliferated on and off the Internet. They are fourth in the National Consumer's League's list of the Top Five scams in America and the fifth most prevalent Web scam. The most common scheme, of course, is earning money for stuffing envelopes. You can earn as much as $2.00 (!) per envelope, according to some e-mails. Except what happens is that you pay the sender for the right to stuff the envelopes, at which point you're instructed to send the same envelope-stuffing ad -- frequently via bulk e-mail -- to others, who will also be asked to pay for the privilege.

By my calculations, in order to make $1,000, you'd have to stuff 500 envelopes. If you figure 30 seconds an envelope, it would take you four hours. Hey! That's $250 an hour -- for doing mindless work that goes for below minimum wage in the real world? Who'd believe that? Plus, if you're like me, you couldn't sit still that long for the money AND a Marx Brothers marathon. These people think you're not only stupid, but a couch potato as well.

Craft or assembly work schemes are another popular work-at-home offer. These usually require an investment of hundreds of dollars in equipment or supplies. According to the FTC, if you actually do work for one of these outfits, they will refuse to pay, claiming that your work isn't up to their standards of quality. You should also know that it is illegal to do certain types of work at home and the Department of Labor strictly enforces its prohibitions on those activities. The people who send you these offers believe you haven't heard the news about the dramatic improvements in today's labor market.

Health And Diet Scams

Like business opportunities that claim you can make money without working, these people claim you can lose weight without eating less or exercising more, that you can cure yourself by paying them, not your doctor, for their expertise. Almost always pitching "scientific breakthroughs" or "secret formulas," they offer cures for everything from hair loss to acne to obesity. Some even offer $99 "ultimate cures" for cancer or AIDS -- not to mention home abortion and self-sterilization kits. In June of 1999, the Food and Drug Administration issued a warning against buying such products because they "pose significant, possibly life-threatening health risks." Duh. The perpetrators of these scams must think you and your computer are stuck in the HMO-from-hell and desperate for any help you can get.

All kidding aside, while not all health and diet products sold over the Web are scams, many of the product sales sites may be dangerous in themselves. Even if you order something relatively harmless from a site that also carries the above-mentioned life-threatening products or a site that flogs medications not approved by the FDA for sale in this country, you're consciously supporting a commercial activity that obviously doesn't care about the long-term well-being of its patrons. Remember, just by making themselves available on the Web, these companies belittle the role of trained medical professionals in diagnosing medical problems and prescribing treatments. Certainly not all doctors are good; after all, some doctors participate in these scams. Still, medical care from the hands of a cost-cutting HMO is bad enough, but medical care from the hands of a profit-hungry sales organization is far worse.

Effortless Income

Not exactly a "business opportunity," this new get-rich-quick scheme offers unlimited profits exchanging money on the world currency markets. You put up the seed money, the perpetrators put up the expertise. If they're such experts, why ain't they rich? What do they need your money for? These people assume you're an addicted gambler, and a stupid one, at that.

Free Goods

Pay a modest amount of dues to belong to a buying club, bring in a certain number of other dues-paying members, and you'll get expensive items, such as computers, for "free." These are disguised pyramid schemes. The "free" merchandise is just a come-on for you to drag in more friends. It seldom materializes, and you and your buddies are out the cash for the dues, usually with no recourse to get it back. These people assume you're stupid, too -- but at least they think you're affable, or how would you get all those friends?

Investment Opportunities

Sky-high returns at "no risk." Most investment scams, on- or off-line, are Ponzi schemes that pay early investors with money from later investors, fooling the early investors into believing that the system works and encouraging them to invest more money -- money they eventually lose. Sales pitches in these e-mails tout high-level financial connections, inside information, and iron-clad "guarantees." In 1999, in their second annual list of "Top 10 Scams," the North American Securities Administrators Association cited bad Internet deals as one of the most dangerous, singling out "Internet fraud involving small stocks whose value is being inflated," along with bogus offshore "prime bank" notes and the ever-popular pyramid schemes. People who send you these e-mails assume you're stupid, a gambler, and probably already a crook.

Cable De-Scrambler Kits

Again, you're offered something for nothing -- cable transmissions without paying any subscription fees. Ignore the fact that it's illegal to steal service from cable companies and that most cable companies aggressively prosecute theft of service. The kits offered in the e-mails don't actually work. These people are positive you're a crook, not to mention a couch potato and a fool.

Guaranteed Loans Or Credit, Or Easy Terms Hoaxes

These run the gamut from home equity loans that don't require any equity, to extending credit in the form of a loan or a credit card regardless of your credit history, to offshore bank loans. Sometimes they're combined with pyramid schemes that pay you for attracting other participants. You pay a "small" advance to qualify for the services --and then the loan doesn't come through, or the credit cards don't arrive. Surprise, surprise. These people know you're desperate.

Credit Repair Hoaxes

These scams promise to erase accurate negative information from your credit file so you can illegally qualify for loans, mortgages, or credit cards. Many of them make their money by charging you for an explanation of how to commit fraud and violate federal laws by lying on loan or credit applications, misrepresenting your Social Security number, or getting an Employer Identification number from the Internal Revenue Service under false pretenses. These people probably hope you're part of the militia movement, actively out to undermine the government and anything else around.

Vacation Prize Promotions

Congratulations! You've "won" a fabulous vacation! You've been "specially selected" for a great opportunity! Send money to cover administrative expenses. And then wait -- and wait -- and wait for your tickets. Or else pay for an upgrade to your "free" cruise, and arrive to find that Tugboat Annie is the chef, the berths are full of fleas, and the ports of call are all on the State Department's Travel Advisory list. Travel scams are second on America's Top Five list, but rank thirteenth as Internet scams. These people think you're a prize yahoo.

So Who's Left On Our Side?

The good news is that the FTC is much busier in this area than just collecting stats for its Web site. It regularly holds "surf days," during which the staff of the FTC, state attorneys general offices, and other regulatory agencies across the country scan the Net for potential scams. In March 1999, the FTC sponsored "Business Opportunity Surf Day," turning the e-mail tables on the scammers by sending 200 warnings via the Web to businesses carrying exaggerated claims on their Web sites or in their e-mails. A month later, nearly a quarter of the offenders had removed the advertisements or modified their claims.

In fact, officials from 27 countries and 45 states participated in one massive sweep of the Internet, searching for "get-rich-quick"

schemes and scams. This "Get-Rich-Quick.Con" program uncovered more than 1,600 sites that made promises like "surf the Net and earn $100 an hour," or that touted pyramid schemes, made outrageous product claims, or were otherwise fraudulent.

The FTC employs the power of the Web to lure the gullible into giving up their hard earned cash, but actually educating the potential suckers. It runs at least five "sting" pages in cyberspace -- sites that provide a typical come-on, only instead of taking the potential victims' money, the sites carry a warning on their last screen explaining just why these people are exactly that -- potential victims.

And the FTC's hot on the trail of new ploys that have surfaced in the last 9 months to a year, particularly the bulk e-mail scams designed to collect e-mail addresses and other information about individuals for resale to spammers. The offers include phony Microsoft giveaways, free pre-initial public offering (IPO) stock in Internet companies, e-mail gift certificates, calls for political action, and bogus surveys. The most common address-collecting trick seems to be an e-mail tracking system giveaway, purporting to be from Microsoft and Disney, and promising people money for each e-mail address they add to a circulating list. E-mail addresses are also collected by scammers claiming to lobby for specific legislation or circulating surveys or polls on "hot" social issues.

You yourself may have put the nail in your own coffin if you responded to an instruction common to spammed messages. "If you no longer wish to receive messages on this topic, just send a blank reply." If you do, you've just confirmed that the spammers have a valid e-mail address in their list, making the list even more valuable when they go to sell it to other spammers.

In addition to its database of consumer fraud complaints, the FTC has just built an Internet fraud lab that scans the Internetfor deceptive business practices. Most importantly, the lab is equipped to electronically "secure" any evidence discovered on the Web; this can help the agency in future prosecutions. In the past, the ability to change, destroy, or disguise digital data has made most evidence ephemeral, and the agency has only brought 100 legal actions against online scam artists in the last 5 years. That number will no doubt grow over the next several years as we become more and more wired and more and more scammers move in for the kill.