Thursday, July 16, 1998

THE "DIRTY DOZEN" OF SPAM

On July 14, the Federal Trade Commission released a list of the twelve most common scams found in spam - sometimes called junk e-mail or unsolicited commercial e-mail. All of these scams were found in the over 250,000 spam messages forwarded by consumers to the FTC's junk e-mail inbox ( uce@ftc.gov). That address receives over 1000 complaints a day according to Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection

"The Dirty Dozen list of junk e-mail is a tip-off to a rip-off," said Bernstein. "Spam is a problem for practically everyone with a computer. It's annoying, it slows down the e-mail system and a lot of it is fraudulent."

THE SPAM DIRTY DOZEN:

• Business Opportunity Scams -- Most of these scams promise a lot of income for a small investment of time and money. Some are actually old fashioned pyramid schemes camouflaged to look like something else. Consumers should be careful of money-making schemes that sound too good to be true. They usually are.

• Making Money By Sending Bulk E-Mailings -- These schemes claim that you can make money sending your own solicitations via bulk e-mail. They offer to sell you lists of e-mail addresses or software to allow you to make the mailings. What they don't mention is that the lists are of poor quality; sending bulk e-mail violates the terms of service of most Internet service providers; virtually no legitimate businesses engage in bulk e-mailings; and several states have laws regulating the sending of bulk e-mail.

• Chain Letters -- These electronic versions of the old fashioned chain letters usually arrive with claims like, "You are about to make $50,000 in less than 90 days!" But you don't, and these electronic chain letters are every bit as illegal as the old fashioned paper versions.

• Work-At-Home Schemes -- E-mail messages offer the chance to earn money in the comfort of your own home. Two popular versions pitch envelope stuffing and craft assembly. But nobody will really pay you for stuffing envelopes and craft assembly promoters usually refuse to buy the crafts claiming the work does not meet their "quality standards."

• Health And Diet Scams -- These offer "scientific breakthroughs," "miraculous cures," "exclusive products," "secret formulas," and "ancient ingredients." Some come with testimonials from "cured" consumers or endorsements from "famous medical experts" no one's ever heard of. These bogus cure-alls are just electronic snake oil.

• Easy Money -- Offers such as "Learn how to make $4,000 in one day," or "Make unlimited profits exchanging money on world currency markets," appeal to the desire to "Get-Rich-Quick." If making money was that easy, we'd all be millionaires.

• Get Something Free -- The lure of valuable, free items -- like computers or long-distance phone cards -- gets consumers to pay membership fees to sign up with these scams. After they pay the fee, consumers learn that they don't qualify for the "free" gift until they recruit other "members." These scams are just low down, high tech pyramid schemes.

• Investment Opportunities -- These scams may tout outrageously high rates of return with no risk. Glib, resourceful promoters suggest they have high-level financial connections; that they're privy to inside information; or that they guarantee the investment. To close the deal, they may serve up phony statistics, misrepresent the significance of a current event or stress the unique quality of their offering. But they are not unique. They're just like the other scams.

• Cable Descrambler Kits -- For a small initial investment you can buy a cable descrambler kit so you can receive cable without paying the subscription fees. There are two small problems with these schemes, the kits usually don't work and stealing cable service is illegal.

• Guaranteed Loans or Credit, On Easy Terms -- Some offer home-equity loans, even if you don't have any equity in your home. Others offer guaranteed, unsecured credit cards, regardless of your credit history. The "loans" turn out to be lists of lending institutions and the credit cards never arrive.

• Credit Repair Scams -- These scams target consumers with poor credit records. For an up-front fee, they offer to clear up a bad credit record -- for a fee -- or give you a completely clean credit slate by showing you how to get an Employer Identification Number. No one can erase a bad credit record if it's accurate and using an Employer Identification Number to set up a new credit identity is against the law.

• Vacation Prize Promotions -- Like their snail mail counterparts, these e-mail "Prize Promotions" tell consumers they've been selected to receive a "luxury" vacation at a bargain-basement price. But the accommodations aren't deluxe and upgrades are expensive.

For more information about the FTC's Dirty Dozen and the actions taken by the FTC, check out the FTC press release and Jodie Bernstein's speech on the FTC website.

If you receive what you consider fraudulent spam, forward it to the FTC ( uce@ftc.gov). If you wish to forward it to the Internet Fraud Watch, please read our guidelines for reports so that it contains all necessary information. Please forward only one copy of any given piece of junk e-mail to NFIC/IFW.

If you have any questions or would like to report an incident, you can call NCL's National Fraud Information Center/Internet Fraud Watch at 1-800-876-7060 or use one of our online forms.

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