Avoiding Online Scams During the Buying Season

December 03, 2012

by Aaron Reese


Kansas City, MO – This year's internet scams are no different than those of previous years. Occasionally the scammers update the classics, like rap artists who sample 70's funk classics, drawing in a new generation of listeners using someone else's ideas. Scammers are using the internet to try out old scams on new victims. Some scams only need the slightest update and they become difficult to recognize. The Ponzi scam has been around for 100 years, but Bernie Madoff managed to weasel billions off investors by using a polished version of it.

Whether you love it or hate it, the internet is now an integral part of commerce. Every year, more and more people use the internet for shopping, paying bills and voicing their opinions, often about businesses. Shopping online has become such a convenience that even the smallest businesses must have websites to remain competitive. Scam artists know this. They create fake business websites to swindle money out of internet users.

When you are confronted with an online promotion but are unsure of its legitimacy, there are many ways to investigate it. You can always contact your trusty local Better Business Bureau. We hear about so many scams, so often, that we can often determine the legitimacy of a promotion or business within minutes of hearing a brief description. Do an internet search of the promotion. If the word "scam" appears in most of the results, you don't need to dig any further. Call consumer protection agencies such as your State Attorney General's office or the Federal Trade Commission. Find out what information they have. Though outside help is useful, the best tactic to use is learn to identify scams yourself. It will empower you to avoid the guys who think they can trick you out of your money.

The following information is to identify things that should raise red flags about companies, things that should get your attention and make you skeptical. Some legitimate businesses have odd quirks, here and there, that could send up the occasional red flag. However, if one single business sends up several, you should steer clear.

There is one time you can comfortably call any promotion a scam. You can label a company's activity fraudulent based solely off one piece of evidence. When a business is supposed to give you money—such as prize winnings—but asks for money in advance, it is a scam. No 'buts.' There is no earthly reason why someone giving you money would need money from you. Ever.

The advice below is more applicable to common needs such as internet shopping. These are more subtle indicators of a company's untrustworthiness and probably more important.

Pay attention to the site's use of English. Most professional websites have copy-editors that catch mistakes in grammar and punctuation. A typo here or there is nothing to get worked up about, anyone can overlook the occasional comma error. However, if the website is riddled with typos and poor English, raise one of your red flags.

Does the company offer something that is extremely time-sensitive? Is it a one time offer that will never come your way again? Whether the sales pitch involves buying shares in a promising company that has not gone public or an incredible vacation package that is only on sale for a few days, these high-pressure sales tactics get consumers to buy something on impulse that they don't want or need.

Look for an address and contact number. Some small companies operating from the owner's home do not want their addresses available to the public. Much of the time, though, companies choosing to withhold their addresses do not wish to be found by disgruntled customers or law enforcement. There is rarely an excuse for companies not to list their phone numbers. Customers should be able to easily communicate with a company they are doing business with.

Check for a professional company email account. In other words, make sure the company does not have an email that is easy and free to set up such as Yahoo, Gmail, or Hotmail. These types of emails are easily replaced once they've lived out their usefulness. Legitimate companies take the time to set up emails with their domain names in them. For instance, if you deal with Wells Fargo, your contact at the company will have an email address with wellsfargo.com at the end of it. It is not always a bad sign when Yahoo or Gmail accounts are attached to smaller companies that use them for convenience, but loan companies, banks, brokers, financial advisors or institutions would never use one.

Does the company's website sport our logo? If a business uses our logo on its website, it must be accredited and must agree to additional privacy measures aimed to protect its customers. The official BBB online logo will not be just an image, it also links to the company's BBB reliability report. Unfortunately, seeing our logo is not always a surefire way to determine trustworthiness. Scam sites have lately taken to cloning our website. Once you click the image, you should be redirected to a report attached to our website, bbb.org. Scam companies steal the entire look of our page and attempt to pass themselves off as us. Be sure the company sporting our logo on their site is actually in a country in which the BBB operates. For instance, we do not yet have Better Business Bureau s in the United Kingdom, most of Europe, or Australia. A company from London cannot claim to be BBB accredited business, because we do not have a BBB there.

Avoid companies that limit payment options to allowing only wire transfers. Scammers who want only a few hundred dollars per person do not do transactions by credit card because the charges can be disputed and refunded. But that does not mean you can give your credit card information to just any company. Before handing out sensitive information of any kind, be certain of the company's integrity.

If one single company raises several red flags, dig deeper before conducting business with them. Better yet, find a different company to do business with. Even if a company passes all the above preliminary tests, take precautions. Print receipts, update anti-virus software, and periodically check credit card and bank statements.

Keep your eyes peeled for the above indicators and you will have a better chance of healthy online transactions. Because you can't protect yourself in all circumstances, and you end up snared in an online scam, file a complaint with the BBB and IC3 (Internet Crime Complaint Center).