The latest "road hazards" on the information superhighway are scams broadcast over rapidly-growing computer networks and electronic bulletin board services. The scams aren't new, just the medium. Some con artists who always used telemarketing, infomercials, newspapers and magazines, and the mail to attract consumers to their products, services, or investment schemes, now have turned to the Internet and the online services of Cyberspace as the new medium to promote their scams. "Cyberspace," a term used to describe this information superhighway and giant computer network, includes the Internet and a vast assortment of commercial online computer services.

The Internet and the many commercial online services provide a valuable new information source for consumers. However, Cyberspace has a dark side: fraudulent sellers use these computer services to promote familiar schemes such as bogus stock offerings, credit-repair services, and exotic or high-tech investment opportunities such as ostrich farming, gold mining, gemstones, and wireless cable television. Promotions for ineffective weight-loss and health-related products and programs also appear online. The bottom line is: treat all ads or would-be ads with skepticism and never make an investment or health-related purchase decision based solely on information obtained from a single source in any medium-- print, broadcast, or online.

TYPES OF ADVERTISING ON ONLINE SERVICES

Most questionable online advertising falls into one of two categories: classified advertising and "disguised advertising."

Classified Advertising

Classified advertising has the greatest number of questionable ads. No matter where you look in classified ads online, chances are they will contain some false and misleading claims. For example, many classified ads promote quick and easy weight-loss products and programs. It is highly unlikely that any of them can deliver on their promises.

Another hot area in the classifieds is "business opportunities." The traditional "work-at-home" schemes, such as making handcrafts or stuffing envelopes, has been replaced by offers to "use your home PC to make money fast in your spare time." Other ads encourage consumers to invest in communications technologies, such as "900" number telephone services, with promises of high returns and low-risk. The investment attraction of "900" number pay-per-call services is the potentially-high profits to be made--20% or more--from the $3-to-$5 per minute fee charged to callers by the 900 service provider. Again, the marketers' promises on these investments are likely to be false.

"Disguised Advertising"

The second category, "disguised advertising," is difficult to recognize because it is not always clear if something is being advertised. There are at least two different areas--bulletin boards and chat forums--where comments or statements about the quality or the performance of products or services may be ads in disguise.

The Internet and the commercial online services all provide bulletin boards where interested parties can exchange information in general topic areas. In some cases, individuals contributing to the bulletin board have financial ties to companies or businesses that sell products or services related to the bulletin board subject area. But, this may not be obvious to the online user. What may appear to be an open discussion could be a disguised sales pitch. Because the full identities or affiliations of online bulletin board operators and participants are not always known, it could be difficult for you to detect disguised advertising.

Some commercial online services also provide live discussion groups called "chat rooms" or "chat forums." Service subscribers can "drop by" and engage in an online conversation by typing in their comments. These forums provide the opportunity to discuss a wide variety of things, including products and services. Some marketers have used these chat forums to promote their products without disclosing their interests.

GROWTH OF CYBERSPACE AND FRAUD POTENTIAL

The fast-growing arena of Cyberspace has become the new frontier of scam artists. There are approximately 15 million Internet users in the United States and that number is increasing each month, according to industry sources. The largest commercial online services are estimated to have more than five million subscribers in the United States. All of these online users are potential targets from the scam artist's point of view.

TIP-OFFS TO FRAUD

The same things that cause concern in traditional print and broadcast media should be viewed with skepticism online. Here are some of the warning signs of questionable online advertising:

Remember, the bottom line is: never make a purchase decision for these kinds of investments or products based solely on information obtained from a single source--electronic bulletin board, online chat-room, newspaper or direct-mail ad, or broadcast commercial. Be skeptical and check sources and references.

FOR MORE INFORMATION

If you have a question or complaint about a suspect online ad or promotion, contact your commercial service provider. In addition, you can file complaints with your state attorney general, consumer protection office or with the Federal Trade Commission (write to: Correspondence Branch, Federal Trade Commission, 6th St. & Pennsylvania Ave., NW, Washington, DC. 20580). Also, contact the National Advertising Division of the Council of Better Business Bureaus, 845 Third Avenue, New York, New York, 10022.

Questions about whether or not an investment sales person is licensed, or if an offered security is registered, should be directed to the Office of Consumer Affairs, Securities and Exchange Commission, (202) 942-7040.

The National Fraud Information Center maintains a toll-free Consumer Assistance Service, 1 (800) 876-7060, to provide consumers with answers to questions about telephone or mail solicitations and online scams. They also offer information about how and where to report fraud and give help in filing complaints.

Computer and Internet Safety

THE GOLDEN RULE:

The most important thing to remember is that when you're online in any kind of a public forum, you're out in public and anyone can read whatever you post. Never post anything on the Internet that you wouldn't want known by the public!

Remember, people you meet in cyberspace might not be who they seem to be.

Basic Rules of Online Safety

KEEP YOUR IDENTITY PRIVATE:

If you are in any type of public forum (such as a chat room) avoid giving out your full name, mailing address, your phone number, the name of your school, or any other information that help someone determine your actual identity.

Never reveal anything about family or friends that could get them into trouble.

NEVER GET TOGETHER WITH SOMEONE YOU "MEET" ONLINE:

The biggest danger to your safety is if you get together with someone you "meet" online. Remember, you never know for certain if people are who they say they are. If you feel it is appropriate to meet with someone, never meet the person alone and make sure the meeting place is in a public place.

Always make sure adults are made aware of the meeting.

NEVER RESPOND TO E-MAIL, CHAT COMMENTS, OR NEWSGROUP MESSAGES THAT ARE HOSTILE< BELLIGERENT, INAPPROPRIATE:

If you feel uncomfortable about a message that was sent to you Don't Respond. Instead show a parent or a trusted adult to see if there is anything that can be done to stop the messages.

CHECK OUT AND BECOME FAMILIAR WITH BLOCKING, FILTERING, AND RATINGS:

Almost all the internet carriers have the means to help a subscriber in controlling the access availability to web sites, chat rooms, instant messages and e-mail as well as what type of information you receive.

Frequently Asked Questions

Q. WHERE SHOULD I PUT MY FAMILY COMPUTER?

A. Family computers should be just that, "Family Oriented". Therefore, the computer should be located in a common area such as a living room or a family room. This way the whole family can get total enjoyment out of it.

Q. IS IT DANGEROUS FOR MY CHILDREN TO GO ONLINE?

A. A computer and the internet can be the gateway to unlimited volumes of information. However a few precautions should be taken. 

1st. Learn everything you can about the internet. 

2nd. Sit down with your children and set guidelines. 

3rd. Tell them what to do when they encounter the unknown. 

4th. Monitor what your children do on line.

National Infrastructure Protection Center: Official website to report cyber crime to the Federal Bureau of Investigation, obtain prevention information for your business or commercial enterprise, special advisories and alerts.

National Cyber Security Alliance: Official locator of "Stay Safe on Line", a cooperative effort of business and government to reduce cyber related crime. This site is especially helpful to beginners and persons needing to take steps to protect home systems from attack.

Last Revised: November 10, 2006