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As more people continue to do business on the internet, scams are becoming quite common.  Here are some scams that you are likely to come across and how to protect yourself and your money online.

1. Internet Auctions:  According to FBI statistics, Internet Auction Fraud is the most widely reported online offense. Complaints range from non-delivery of merchandise, merchandise which is not the value stated, to non-payment for delivery. Here are some tips to help protect yourself:
    
   • Make sure you know as much as possible about how the auction works. Before you bid, know what your obligations are as a buyer and what the seller's obligations are to you.
      
   • Find out how the web site or company deals with problems.  Do they have a good reputation for satisfying customers? Consider taking insurance out on the transaction and shipment.
      
   • Get as much information on the seller as you can. If it is a business, check them out with the Better Business Bureau in the city where the company is located.
      
   • If there's any feedback on the seller, check it out.
      
   • Try to purchase from sellers in your own country.  Getting problems resolved with a seller could be much more difficult if the seller resides outside of the country that you live in.
      
   • Make sure you know when your item should be delivered and if shipping and delivery costs are extra.
      
   • Ask the seller if there is any warranty on the merchandise. Find out if it can be exchanged.
      
   • There is no reason for a seller to ask for your social insurance number (social security, if you are in the U.S.), or driver's license number, or any other personal information about you that has nothing to do with the purchase.
      
2. Multilevel Marketing Plans/Pyramids:  We've all seen the ads. They say you can make money by selling products and services and recruiting other members into the program. Customers say that they've bought into the program only to find that their customers are other distributors - not the general public. Many of these Multilevel Marketing schemes are actually illegal pyramids.
    
   • Remember the old adage: If it looks too good to be true, then it probably is.
      
   • Be wary of plans that claim you will make money by recruiting distributors who in turn must recruit more distributors. Avoid plans that offer you commissions for recruiting more distributors.
      
   • Watch out for plans that claim to sell 'miracle' products or plans that promise huge earnings. Get proof from the marketer before investing. 
      
   • Watch out for 'shills' - those are decoy references who are paid by a plan's promoter to lie about how much money they made through the plan.
      
   • Don't sign any contracts under pressure. Insist that you be allowed to take your time to think over your decision. Talk over your plans with family members, friends, an accountant or lawyer.
      
   • Research the company or plan first. Talk to the Better Business Bureau or RCMP fraud squad (in the U.S. your state Attorney General's office) about any plan you are considering - especially if the claims made by the promoter seem a little too good to be true.
      
   • Remember that if you are going to make money you are going to have to work for it. It doesn't matter how good a product is or how solid the plan is - it won't work if you don't put the time and effort into it.
     
      

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Page last updated February 12, 2008