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How to spot an internet scam.

Updated on December 22, 2011

If it's too good to be true then it's probably a scam.

Recently, gmail offered me a link - clearly an advertising link, and I rarely click on them. But one caught my eye.

It offered a 53" $1200 TV for less than $60.

"Is this too good to be true?", I thought. Curious, I brazenly clicked on the link, wondering if the TV was some massive CRT the depth of a sofa end-on. But no, it pictured a flat screen. It looked so tempting but by BS detector was pulling the chain loud and clear so I stopped short of the enticing "Sign up to buy" . It claimed the last sale was $58 i.e. some %72 off and gave an excuse that it was over-stocked.

OK - what's wrong with this picture?

  1. Apart from the "too good to be true" status, why would anyone sell a huge Sony Bravio for $58? What would the shipping cost? That's probably making up the rest of the required profit I thought. After all, you would need to store a huge box and provide security for it, and reasonable environmental protection. Typical profit margins for hight technology is not likely to be much more than 5%. Mainstream department stores cope with this by enticing people into long term finance plans.
  2. The requirement to sign up before you can purchase is unsettling. What's that information worth to them? What are they going to ask for?
  3. Looking closely at the home page, there is tiny print at the bottom, below in the area where most laptop screens don't show without scrolling. It said, "Not all items are sold daily. Quantities are limited." While that's not too bad a sign on its own, it does ring a few bells especially because the big bold print says, "8 new deals every day", and the indicator on the TV says, 30 sold monthly. Of course, there are 30 days in a month roughly, so it looks line one sold each day. So which is it? A deal each day or not? This smacks of deceit.

Having got suspicious, I then went to this link. It's called 'whois' and you will find many services like it which will tell you where the domain is registered. In this case, the web site is boasting "Proudly Australian". However, whois tells me that it was registered in Vancouver. That kind of disconnect is not worrying by itself, but it's yet another alarm bell because I've seen similar scammy advertising on toys made abroad. They put on an Australian style branding like a kangaroo or a map of Australia and claim "Designed in Australia" whereas they are really totally made abroad and imported. It's like lying, but not quite legally lying. It's on the edge of deceit.

The next bit of research that can help, paradoxically is the internet. Just type in the domain name and append the word "scam". Now things really come to the fore.

Here are some of the comments. I've blanked out the company name for my own self-interest, but you will get the idea.

Everything on there is SUPER CHEAP!!!!! Seems legit from the youtube video they have posted on their website.

Well, no. Self endorsement carries no positive connotations. In fact it does the opposite.

The Better Business Bureau also warned against them after receiving over 200 complaints in Delaware alone. I wouldn't trust them with my credit card information.

Ah, now we are getting somewhere. Already, someone is willing to pass on an unacceptable number of complaints.

The next internet lead links me to and if you pop there, you will see they claim several billion dollars worth of scamming has already been reported. Put in the web site and see what they have to say. Here is what it revealed:

  • unauthorised credit card charges
  • false advertising
  • non delivery

This looks bad. Already I can see that a sub $50 flat screen is not a reality and in fact likely to be a major financial hit.

"I placed a bid for an item and was directed to a information I was told that i need to bid on a package deal next thing i knew it said thank you for your order.I did not order anything the company is misleading. they have no telephone number for contact and tell you that they have no record of the charge."

This leads to another method of checking out a company. Try and find out how to contact them. If it's not obvious, then you won't stand a chance after a complaint. It's very difficult to complain to a company that hides in the shadows. If their only interface is via a purchase, then run away. If you can find a street address, then look it up on Google maps and street view. If they are really there, then you should be able to see a proper shop front and sign-age, not some vacant lot, building site or random coffee shop.

"multiple people have claimed to have been charged hundreds of dollars of fees just after signing up and entering their credit card info before they bought or bid on anything."

That's straight out theft, at least if there is no up-front agreement or contract involved. The problem is though, there is quite likely to be an agreement. You probably agree just by clicking on some button somewhere without really getting a decent opportunity to realise that you are agreeing to these charges. Companies like this live just on the legal side of the law which makes it very difficult for you to have regress.

And here we have it: the scam:

"They charge for each bid (unlike legitimate auction sites like ebay) so you end up paying just to bid and they recoup thousands more in bids on each item than the item is even worth."

No doubt, this is clever. No doubt, it's probably legal. No doubt, you get scammed despite the legality. It's probably a form of social engineering to trick people into trusting where no trust is warranted. It's probably a psychological trick to get you to mechanically and unknowingly agree to disagreeable terms and conditions.

I hate these kind of companies, but we can fight back. If you spot them, report them. If you got scammed, let people know. Call the office of fair trading. Call the ombudsman. Let people know.

Legitimate auction houses.

Legitimate auction houses have a well known reputation, and they protect it. The good ones permit you to scrutinise their business and feedback before a purchase, and they don't hide their contact details. The good ones offer indemnity and conflict resolution. These companies have something to lose of they scam you. So there is the main key. Try to work out what the merchant or seller orbroker has to protect. If they have to protect a good reputation, then that's your best indicator of fair trading.

Good luck with your bargain hunting!

Have you encountered scams like this?

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    • mathira profile image


      6 years ago from chennai

      Good advice to spot a scam and internet is full of it.

    • mjoins profile image


      6 years ago from Toronto

      The server has been compromised, all customers credit info has been breached. If it looks too good to be true it is just another clever way to get your card info.

    • Manna in the wild profile imageAUTHOR

      Manna in the wild 

      6 years ago from Australia

      Wise words there Austinstar!

    • Austinstar profile image


      6 years ago from Somewhere near the center of Texas

      Quibids is a legitimate site, but the gimmick is that they make their money on the bids. And once you start bidding on something, you lose all your money if you don't go ahead and buy the item.

      Well, I did watch and play for a while and they were very fair with the little things I bid on and won, so I finally decided to go for a big TV. After spending hours bidding a penny at a time and not wanting to lose what I had already put in, I finally gave up and bought the darn thing retail. It was delivered as promised and was probably worth the retail price, but I felt like I lost hours of time trying to get the bargain price. I would have been better served just to go to Best Buy.

      So summing up, it wasn't a true scam, but I definitely would recommend just buying something on sale at a regular store.

    • diogenes profile image


      6 years ago from UK and Mexico

      This sort of crap beats stand-up comedy. Anyone greedy enough to fall for it deserves what they don't get! Bob


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