Online shopping is a great experience for internet users. Websites such as Amazon, Ebay and Craiglist allow customers to compare and search from a large selection of products all at the click of a button. But as with all retail Caveat Emptor (buyer be aware) we should also add sellers as scammers target anyone. Many retail scams have found their way onto the internet. Community pages like Craigslist and Gumtree in Australia are susceptible to fraud as buyers and sellers are not verified. See Craigslists top tips for avoiding scams below. We also detail some common scams after forewarned is forearmed.

Source: http://www.craigslist.org/about/scams

Free Furniture

The free furniturescam might work out well for you but not for the owner. In a famous incident a man in Oregon basically lost all his furniture (including a horse) after an ad was placed on Craigslist. The ad informed everyone that he was relocating and that all his belongings were free for the taking. He arrived home to be greeted by close to 30 people rummaging through his goods. After the incident the owner could not even relax on his porch swing as someone had already taken it! He managed to claim some goods back but the majority of people had already come and gone. It was a nasty scam as the scammer made no personal profit from the situation except for the enjoyment of seeing someone’s house ramsacked.

Cheap Rental Homes

High rental prices are a major problem for consumers as it is usually their largest expense every month. Scammers are well aware of this. One of the most common scams involves renting an apartment or house. The scammer will list pictures of the property based on another actual listing at a much lower price. The scammer will pretend to be the owner, but will ask interested parties for an application or deposit fee to hold the rental. Users can tell the ad is fake because they typically do not ask for social security numbers or personal information just the money.

Cell Phone Trickery

This scam combines the old with the new utilising phone bills and the internet. It starts off with an email expressing interest in a product or good you are selling. The ‘buyer’ however is very busy and would like you to leave your details on a website so they can get back to you. Unfortunately the website starts to bill your cellphone $9.95 a month. So the seller doesn’t make a sale but it actually costs them money. Even sellers need to be aware on the internet. Frustratingly you will not have the ability to cancel this anonymous service and will be required to terminate your credit card.

Used Cars For Less

The biggest purchase in someone’s life after a house is a car. Craigslist is a good place to find used cars in your local area but it also attracts the attention of scammers. Scammers will offer prices well below the normal price to attract the attention of a large amount of people. Tricks to look out for? Be wary of car prices well below market prices listed on valuation sites like Kelley Blue Book especially listings that have been posted from a person based in another country. Sellers from another country cannot be prosecuted locally if something goes wrong. Also be cautious when the seller mentions wire payments. Money transfer services such as Western Union are untraceable.

One of the benefits of using community sites is that they are local so there should be no need for you to deal with someone based in another country. Transact locally and personally and you should be able to keep away from 99% of scams.

Give-away from the Troops

This is a horrible scam using the good reputation of the armed forces to convince you to part with your cash. This scam involves ‘soldiers’ getting rid of large ticket items such as TV’s at a fraction of their market price before deploying overseas.  As always if it’s too good to be true it most likely is.

Phishing for e-Bay

This is one of the more sophisticated scams using both Craigslist’s and eBay to take consumers money. The scam starts off with ads on Craigslist sending the buyer a link to a site that looks like eBay but captures the buyers login details and password. The scammer has many options they can sell fake goods with the new login or use it to login into Paypal (people usually use similar passwords) to transfer out money. Its like a Ponzi scheme that keeps growing, it is not just one scam but two into one. It is a tricky scam as eBay should be more secure over Craigslist as it is not accountable for any business mishaps. The best customers can do is to use sites that have verified sellers with companies that will stand by customers if the seller has done the wrong thing.

Student Roommates

This scam is known an advance fee fraud. It’s a little trickier in that a scammer will feign interest in a room sending a cheque as a deposit. Before it has the opportunity to bounce the scammer asks for an amount refunded back as they need to pay for their flight usually leaving the roommate out of pocket of a couple of thousand dollars. Once again this scam involves someone outside of the country and uses a site (in this case Craigslist) that doesn’t verify users as a medium for fraud.

Top 10 Scams Targeting Seniors

A lof of senior scams involve health care fraud due to the large amount seniors spend every year. It has been found that the US spends more on health care than 12 other industrialised countries yet it does not provide superior care for the price spent. According to the Commonwealth Fund the US spent nearly $8,000 per person in 2008 while the more mature and ageing Japan spent only 1/3 of this cost. There are a lot of inefficiencies within the US system but arguably some of this extra cost is due to fraud.

Health Care/Medicare/Health Insurance Fraud

Medicare is a national social insurance program that guarantees acess to health insurance for every US citizen over the age of 65. On average Medicare will cover 48% of the costs for users. Scammers are taking advantage of these payments getting older citizens to give out their personal details to provide services and bill Medicare.

The FBI estimates that health care fraud costs American tax payers $80 billion a year.

Because of the popularity of health care frauds, studies prove that 10 cents out of every dollar goes to paying deceptive health care claims. Not helping the matter is congressional legislation requiring that reasonable claims be paid in just 30 days making such payments amenable to fraud. More than 30 states have laws on timely claim payments.

Counterfeit Prescription Drugs

Consumers have many choices in buying prescription drugs buyers are no longer confined to just the local drugstore or chemist. The internet offers many choices but also risk as the amount of counterfeit drugs available has increased. In this case buyers need to be even more aware of the products. If you know the size, shape you may be able to identify counterfeits. Some counterfeit drugs may contain different ingredients and instead of helping may inflict even more harm.

The World Health Organization (WHO) has found counterfeit drugs make up almost 60% of the overall drug supply in some well developed countries where regulation is less strict. The majority of issues involved products without active ingredients, incorrect quantities of ingredients and wrong ingredients. To be safe consumers should only buy from safe reputable sources ie verified sellers. In this case you can check with the National Association of Boards of Pharmacy.

Funeral and Cemetery Scams

It is a horrible place to conduct a scam but scammers have been known to take advantage of such an emotional event. Most individuals would rather not think about their funeral or for their loved ones but being prepared is key. The standard funeral can cost up to $10,000. Some funeral directors have been known to upsell expensive caskets taking advantage of the vulnerability of the situation when much cheaper options such as cremation are available.

Fraudulent Anti-Aging Products

Ageing gracefully is the retirement plan for many. Seniors looking for the fountain of youth has become big business attracting scammers to the large and growing market for anti-aging products. Some of the most common fake products imitate botox.

The distributors of a range of deceptive anti-aging goods usually count on individuals who are searching for related treatments and medicines to slow down the aging process. The National Council on Aging (NCOA) has information users can check for details on false anti-aging products and solutions.

Questions to ask include where is the proof? If someone makes a claim ask for scientific evidence that backs it up and that the study was conducted independently. Remember celebrity endorsements don’t count and watch out for secret formulas! The Better Business Bureau has a great site where consumers can search if claims have been filed against certain products and manufacturers.

Telemarketing

Seniors still love to use the phone making twice as many purchases over a call than the average. Scammers take advantage of these statistics offering “free” products to individuals for which they are charged. They also try to sell counterfeit drugs and fraudulent anti-ageing products. Just remember to pay after the services are delivered not in advance.

Internet Fraud

The Internet is an easy way for scammers to access a lot of people cheaply. A website, spam electronic mail, online-messages, can gain access to a large audience very quickly.  Many internet scams are old scams reinvigorated for today. As always make enquiries of the company involved and when making payments use your credit card as if you can prove a fraud you might be able to get your money back. 

Investment Schemes

Seniors are popular targets for investment schemes as they are typically retired with large amounts of savings to manage. Investment scams come in many forms with the cold call investment tip to ‘guaranteed’ income plans and pyramid schemes like Bernie Madoff’s.

Your first protection is to know who is calling never deal with people you cannot verify and if tempted make sure you seek independent financial advice before proceeding.

Homeowner/Reverse Mortgage Scams

Reverse mortgages allow homeowners to convert equity in their home into cash by re-borrowing against the house and withdrawing money. These loans are a little different in that the loan does not have to repaid until the homeowner moves out, sells the house or dies. Scammers are taking advantage of this financial innovation by targeting senior citizens pressuring them to take out reverse mortgages when they are not needed and charging inappropriate fees.

Sweepstakes and Lottery Scams

Free money always gets people’s attention. This scam is popular with seniors as many do enter lotteries and sweepstakes. They aim to get your personal details to prove that you are the approved winner and your personal bank account details so the award can be transferred to you. Scammers will often ask for upfront payments to cover costs, administration taxes, bank charges or courier fees.  These Lottery scams will often employ the names of lawful overseas lotteries adding legitimacy to their claims.

A common trick is for the ‘lottery’ to mail you a fake cheque. While the cheque is being cleared they will request fees or taxes on the price leaving you out of pocket when the cheque bounces. If you get such an email or text message please do not respond back and do not mail any money or any details to the scammers.

The Grandparent Scam

This is one of the sneakier scams where the scammer pretends to be a family member. How do they fake it, they typically start with Hi, do you know who this is? When they guess the name the scammers run with it and gain the callers trust. Scammers often target nursing homes pretending to be a grandson in need of money because they have been arrested overseas or in some financial difficulty but do not want to tell the parents. To protect yourself from this scam make sure you verify with the parents as once you wire money you can’t get it back.

Financial Scams

Most scams lead people to think that they have the opportunity to achieve a lot (for some in terms of financial remuneration or an ideal relationship) in return for little up-front cost. As a common rule, if it is too good to be true, it probably is.

If you have suffered from an Internet scam, please inform your local authorities and send them all your correspondence including if it came from a particular website. When you have become the victim of a scam, it is best to stop all communications with the con artist. It is exceptional for victims to recuperate lost money by themselves. If you feel threatened in anyway, you should report it right away to the local police.

Internet-dating

Seniors are major targets of dating scams because they typically have assets and maybe lonely. Scammers can be very convincing going to great lengths to build a relationship with you before attempting to persuade you to send them money. It is easy to pretend that you are someone you are not on the internet. Once a connection is made the correspondent requests the victim to send over money or to help them for expenses such as hospital fees or money for flights.

Work Permits

This is another famous Nigerian scam targeting those looking for work. They typically offer the intended victim a large salary for a few months work in Nigeria but first the employee must pay up front certain fees related to permits and visas. They use the guilt trip on applicants stating that they can be only sure of the applicant’s willingness to work once the fee is paid.

Inheritance Scam

Inheritance scams begin with a call out of the blue to inform you that you are entitled to a large inheritance form a wealthy relative overseas. Some scammers will give out a fake name of your supposed family member, others may find real names based on research and information available publicly on family websites to make the scam seem more realistic.

The scammer will pretend to be a banker, lawyer, or other foreign officer will inform you that the money may be difficult to access because of government and tax restrictions in the country. To gain access you will be asked for your bank account details and even to pay a series of fees to help release the money trapped overseas. As with many frauds they typically ask for money orders or wire transfers as once they are sent they are difficult to recover.

Overpayment and Money Laundering Scam

Advance-fee scams are some of the most popular online frauds for sellers on the internet. The most common involve cheques that are overpaid, the scammer will make an excuse and ask you to refund the excess amount. Hoping that you will do this before you find out the cheque has bounced. The sellers end up losing the item that they have shipped and also the excess money.

The internet has given users access to the world at the click of a button. It has made information free and is helping us to connect to each other more easily. However this connectivity also opens up users to potential online scams. With a population of 2.4 billion users there are bound to be some bad apples on the internet.
The worst part about internet scams is that most occur without the victim even realizing it. It is only when their credit card bill appears that an individual might realise that they have been a victim. Common sense might help you but scammers are becoming more sophisticated imitating real websites and spamming emails they look legitimate. Here are ten of the top internet scams.

Lottery Scams

Free money always gets people’s attention. This scams targets you with the news that you have won the lottery. You will be informed that you have won millions of dollars. They may also request personal details to prove that you are the winner and to provide your personal bank account details so the award can be transferred to you. Scammers will often ask for upfront payments to cover costs, administration taxes, bank charges or courier fees.  These Lottery scams will often employ the names of lawful overseas lotteries adding legitimacy to their claims.

Even if you have not purchased any tickets from a lottery some seem to think its worth the risk of a few personal details for a million dollars. But its not worth the risk if they have all your details it could cost you more than this. You may have your bank account cleared out or loans taken out in your name. If you get such an email or text message please do not respond back and do not mail any money or any details to the scammers.

Disaster Relief

This scam is one of the worst as it takes advantage of the confusion that arises after a natural disaster. Money is usually the quickest and best donation. Scammers are aware of this and when a disaster strikes have been known to setup fake websites for donations. Donations linked through email are the most popular for scammers giving them access to your money and not to those who need it the most. As always please stick to established organizations such as the Red Cross and do not reply to donation requests from email.

Online Dating

In dating the heart can rule the head. Scammers use this to their advantage. They have been known to spend months cultivating relationships before asking for money or help. Certain countries in Africa and Eastern Europe seem to specialize in this scam. In fact, the US Embassy in Russia currently receives information every day from individuals who feel they have been taken advantage of while looking for love.

For those looking for a partner it is great to connect with someone over e-mail. But the problem with email is that we may never know who this individual really is. Once they have built up trust wiring a bit of money to help them does not seem so alarming. But before any of this should be happening users should consider Skype and Facebook to check that they are who they say they are. These two tools can help you to connect to people who are legitimate. This is one of the more difficult scams as those who fall hurt both financially and emotionally.

Rogue Software

The infamous pop up virus scam. Instead of helping to fix your computer anti-virus software can actually employ viruses. The pop up screen may look legitimate and offer to clean up your computer but it can do the opposite and infect it. It is difficult for even the most sophisticated of users to identify this scam.

Please make sure you already have the best anti-virus software installed on your computer and keep your genuine anti-virus software up-to-date. You can minimize this risk by accessing mainstream or authentic sites only. In 2010, a Google study found that shareware accounted for 15% of all malware identified on the web.

Travel and Vacation Scams

What’s second to winning lotto? A free vacation! Scammers have realized that a free holiday can sound more legitimate than winning lotto. Scammers inform consumers that they have a won an all expenses paid trip to Hawaii. To confirm all you have to do is to wire a few hundred dollars. Companies may ask for non-refundable handling fees or deposits. Most of these travel scams are dependent on unclear details for example; they’ll utilize phrases such as a major airline without mentioning it. If you must fall for such a scam please use your credit card as if any issues occur you can dispute charges within 45 days of making the payment.

Fake Auctions/Sales

Fake auction sites appeal to those who want to save money which is pretty much everyone. Scammers take advantage of this with fake sites selling products at a massive discount to their retail price. Other less organized scams are from buyers ripping off sellers. These buyers claim that they have paid for a product which has not been sent when they have received it earning their money back while keeping the product. If there are issues with postage or descriptions users may have to deal with any Postal Service, credit card company and online-auction website personnel to get their money back. The good thing about technology is social media. Sites like Facebook and feedback scores on auction sites can help you determine if the site and sellers are legitimate.

Free Trial Scam

The word free always gets people’s attention. It’s a smaller kind of scam but free product trials get people interested. If users do not cancel the fee trial within 15 or so days they can be charged inflated shipping and handling fees.

There is a lot of small print that comes with a series of trial offers. As above the best way to keep yourself from being a victim is to keep track of social media. Disgruntled customers will definitely vent there or somewhere else on the internet. You can verify company rankings with the “Better Business Bureau”.  No one can hide bad information anymore. Please check these sites before you sign up to any offers.

Working from Home

Make $10,000 a month by working from home. We have all seen these ads. They typically involve turning your computer into a money making machine by following several simple steps. Of course you have to pay for this information and you get nothing in return. I hope you haven’t quit your day job! If you are considering a work-at-home scheme check their website, ask questions and please don’t send them out any cash.

PayPal

Paypal is the largest target for scammers on the internet as it processes $1 out of every $6 transacted on the internet. The most recent scam will notify you that your account details have been compromised and inform you of several steps to fix such a problem. These scams can look very authentic with logos and links used to entice the victim to share their codes and personal details.

Nigerian 419

Nigeria has become famous because of this scam. The Nigerian 419 scam is an upfront money transfer fraud. The 419 code comes from Nigeria’s criminal code which outlaws the practice. As the no.1 scam it has become very well known. It is famous for its ‘Nigerian prince” emails providing you with the “chance” to share in a large amount of money. All you have to do is give them your bank account details to help transfer out money which has been trapped in the country because of the civil war. Of course this is all a trick and to keep growing scammers are known to target emerging markets like Vietnam and South Korea as the scam has become so well known.

The Top Ten Charity Scams

The problem with the internet is half the time you do not know who you are really dealing with as users are not verified. Scammers take advantage of this anonymity with most frauds being conducted on the internet.

Tsunami Victim Scam

Internet users are becoming more sophisticated against scams but unfortunately scammers seem to be one step ahead. Cyber criminals have come up with new ways of cheating victims with half truths that can be verified. One of the worst was the 2004 boxing day tsunami in the Indian Ocean which killed 230,000 people. These scammers used legitimate victim details to scam their family members for money and bank account details.

Virginia Tech Charity Scam

Virginia Tech was the site of the tragic shooting in 2007 where 32 people were killed.  Virginia tech itself setup an official fund for the victims but another 25 new domain name were registered online. While some may have been legitimate a number were shut down by the government. One of the lessons is to be wary of charity sites soliciting donations through email. Donators should talk to staff and ring official hotlines to verify that it is a reputable charity. You could even inquire about information that illustrates the charity’s program and latest financial report.

Bernie Madoff

Everyone has heard of Bernie Madoff’s Ponzi scheme. It was the largest in history with estimated losses to investors of $18 billion, even worse many charities were investors in the scheme. Many Jewish federations and hospitals have been forced to close down. The most famous foundation the Eli Wiesel Foundation for Humanity lost $15.2 million.

Typhoon Haiyan scam

Many scammers are opportunistic. They take advantage of disasters that are currently making headlines. The Typhon Haiyan resulted in more than 10,000 dead in the Philippines. Scammers used emails and fake charity Facebook sites to solicit donations. Again the best way to protect yourself against these scams is to use reputable charities and not answer opportunistic email requests.

French Scientology Fraud

The church of Scientology is famous for its famous followers Tom Cruise and John Travolta. It was established by L. Ron Hubbard, a science fiction writer in 1954. It is estimated to have at least 12 million followers from all around the world. Many believe it to be a cult rather than religion.

In France the organization was convicted of organized fraud and ordered to pay $812,000 in fines for preying on followers in the mid 1990’s. The organization manipulated followers into handing over amounts as large as $20,000 Euros for services and products for bogus cures and tests. In addition to the fines the Judge ruled that 5 Scientology church leaders receive suspended prison sentences.

The Deniz Feneri Foundation Fraud

Every religion seems to attract scammers. The Islamist Deniz Feneri foundation was the biggest corruption case in Germany’s history. The trial had far reaching consequences as they foundation had donated to the Turkish Prime Ministers party. The foundation’s money was meant to be for suffering Palestinian, Turkish and Pakistan refugees. However the directors of the foundation used the money to buy real estate, stocks and even a cruise boat. The main directors admitted to taking $US30 million out of the funds bank account and were jailed for fraud.

The Nigerian 419 E-Mail Scams

419 Nigerian scams are famous. Because they are so famous they have begun to take the form of charity requests. Instead of transfering money on behalf of a Nigerian “Prince” the email subject will take the line of a charity.

ACORN

The Association of Community Organizations for Reform Now (ACORN) is s a community organization that advocates on behalf of low- and moderate-income families. On issues such issues as neighborhood safety, voter registration, health care, affordable housing, and other social issues. While they did do some good after several embezzlement issues and controversies it filed for liquidation in 2010.

The Katrina Internet Scams

Katrina is another natural disaster that the scammers took advantage of. Days after Katrina hit phony sites were registered and requests for donations emailed out. Some scam websites also copied websites of legal organizations like the Red Cross. The Federal Bureau of Investigation has estimated that over 4,600 websites were registered. The FBI were instrumental in shutting a number of these frauds down. It wasn’t just scams but frauds as well with more than 600 people charged in 22 states who received money from the government or charities instead of the intended storm victims. Some of the worst offenders included a woman who apparently watched her two children drown in the water. But in fact she had no children and was living hundreds of miles away when Katrina struck.

The 9-11 Charity Scams

The 9-11 terrorist act changed America and the world. Many legitimate charities were setup to help victims. Unfortunately there were also many scams collecting donations for families that instead went personally into their back pocket. One of the notable scams involved two men who sold t-shirts from a custom painted pick up truck with September 11 themes.
Some scams involved New York City workers. 130 retired firefighters and police officers have claimed benefits for mental and emotional trauma at ground zero when some were not even at the scene. While investigations are still continuing it is believed that up to $400 million in tax payer funds could have been stolen.

Fraud and misrepresentation is a huge problem online as in many transactions you do not actually know who you are dealing with.

Our soon to be released Verified Sellers Seal below will be available for only $39 per annum. The seal can be used not only for sellers but buyers as well. Only genuine industry participants will be approved with each member receiving a certified registered number.

The biggest problem on the internet is one of credibility. There are many businesses selling products or services that they have no knowledge of. Out right frauds or scams are a problem but so is misrepresentation of products which does not get as much publicity.

Our proven Verification system started in 2004 allowing Verified Sellers to sell expensive gems  on our gemstone sites. To qualify sellers needed to show that they have product knowledge and a verified address and identity.

Paypal and eBay will verify your bank account and address but we will also verify that they are an experienced seller as well.  We have a proven system to approve bona fide sellers. Over the last 8 years we have assessed hundreds of thousands of sales on our site ensuring that our system works for our Verified Sellers. It also provides a better experience for customers as Verified Sellers with experience are long term sellers and are after repeat business not just a quick buck.

While writing this article I did some research on Facebook. It took only 15 minutes to see that a person had sold three items and had bragged about the sales posting the buyers names, home address, email and phone number online. It’s a huge problem for these buyers as there is now the potential for identity fraud. Of course verified sellers would never do such a thing.

Gumtree and Craigslist contain some of the worst frauds as all buyer and sellers are anonymous. No one is verified and the sites do not offer any sort of buyer protection or payment programs. See below for Gumtrees top tips needed to stay safe on their site. In our view there is no point buying online if you then have to meet in-person to see the item and exchange cash to make sure you are not ripped off.

Source: https://help.gumtree.com.au/knowledgebase.php?article=26

We also met a person this week who sold a $1700 ring on gumtree.com.au. Gumtree is a division of ebay the buyer paid with PayPal but it was from a PayPal account that did not exist.

She went to the police but they could not follow up the complaint as she did not have the copy of a certificate to value the ring. Unfortunately most police cannot help in internet scams as they have no jurisdiction over fraud conducted overseas.

Scams fall into the following categories

(A) Once only rip off

Offers that look too good to be true. The web site may look legitimate selling brand name items at half price. The goods may end up being fake or more concerning they may try to steal personal information. The majority of these scams tend to exist on community sites like Craigslist and Gumtree as buyers and sellers are not verified.

Don’t miss or must buy now. There is pressure to pay today. Legitimate businesses do not pressure.

(B) Private seller offers “too good to be true” deals on products or services.

They will offer an unbelievable deal with massive savings but they will typically ask for money upfront scamming you for a few hundred dollars.

(C) Traditional scammers. The Nigerians will keep reinventing themselves.

(D) Cheap rental homes scams are a favourite. The scammer will list pictures of the property based on another actual listing at a much lower price. The scammer will pretend to be the owner, but will ask interested parties for an application or deposit fee to hold the rental. Users can tell the ad is fake because they typically do not ask for social security numbers or personal information just the money.

All these scams exist as the seller cannot be verified and nothing is guaranteed.

Our Proven Verified sellers program will help increase trust that will enable both buyers and sellers to have the confidence to transact online.

You can find out how it helped our gemrock auctions site at http://www.gemrockauctions.com/help/getting-started/verified-sellers-program