http://www.smartmoney.com/dealofthed...story=20071009
SHOPPING ONLINE HAS its perks but security from shopping scams isn't one of them.
Internet-related fraud accounted for 60% of all consumer complaints in 2006, according to the Federal Trade Commission's annual data roundup. (And that's up 5% from 2004.) In all, consumers lost a whopping $1.1 billion last year.
It's not that shoppers are more gullible, says Jorgen Wouters, a senior researcher for Consumer Reports. Rapidly advancing technology enables scammers to work more efficiently and creatively, simultaneously baiting hooks for thousands of deal-fishing consumers — and hitting harder those who bite. "If you're aiming to fool 100 people, and you fool just one, you've still succeeded," he says.
Here are six Internet shopping scams that even savvy consumers can fall prey to:
1. Missing Auction Goods
Let the bidder beware. Arizona police are currently hunting a man who has conned eBay buyers out of more than $100,000, selling them trucks, cars and boats he has never delivered. Auction fraud — i.e., when goods are not delivered or grossly misrepresented — holds the dubious distinction of being No. 1 on the National Consumer League's Top 10 Internet Scams list every year since 1998. It represents 34% of all complaints, with victims reporting an average loss of $1,331 when the seller denies a refund or (more often) slinks off into cyberspace.
Protect Yourself: "Paying with a credit card is your best bet, because of the strong consumer federal protections," says Susan Grant, director of the National Consumer League's Fraud Center. Under the Fair Credit Billing Act, you can dispute a charge for goods not received or items that are materially different — say, that are defective, or not what you believe you ordered. Most auction sellers aren't set up to accept plastic directly, so set up a free account through a payment service like PayPal or BidPay to send cash from your card. Your dispute rights still apply.
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2. "Free" Stuff
Quick: Which is the most common eye color — hazel, blue or brown? Click on the right answer for a "free" iPod. Free, that is, after you take advantage of four purchase offers from site sponsors and convince five of your closest friends to do the same. "[Claiming a freebie] always involves a good deal more work than you think," says Steve Salter, director of BBB Online, the Better Business Bureau's Internet business division. It's rarely actually free, and just starting the process signs you up for a wave of spam.
Protect Yourself: Approach free offers with a healthy dose of skepticism, says Salter. The bigger the prize, the greater the chance it's not a good deal. To avoid the spam generated by smaller freebies — say, coupons at CoolSavings.com — set up a secondary email address that you use solely when signing up for such offers.
3. Bogus Payments
Would you cash a $2,000 check someone "mistakenly" sent you for a $200 piece of furniture you listed on eBay or Craigslist — and then wire them back the difference? Plenty of consumers do just that, says Claudia Bourne Farrell, spokeswoman for the Federal Trade Commission. So-called wire-transfer scams have more than quadrupled since 2003, today accounting for 23% of complaints, according to the FTC. The average loss is a staggering $4,053. By the time the bank catches the bogus payment, you've lost both the item and the money — and often a few bounced check and overdraft fees as well.
Protect Yourself: Never accept a payment that's greater than the total you and the buyer agreed on. Also, fakes can be hard to spot, so wait until the check is cleared to mail out your item, says Farrell. Just don't rely on your account balance to figure that out — call to confirm that your bank has actually cleared the check, rather than just made funds available. (Click here for more tips.)
4. Stealth Sign-Ups
Purchase your movie tickets through Fandango, and you may be offered a $10 coupon off your next purchase from partner site Reservation Rewards. Click through, however, and you'll get much more than the coupon — the site signs you up for a regular subscription to its entertainment discount club for $10 a month. You'd only notice if you read the fine print, says Wouters. And the fine print is becoming increasingly finer, with clauses that allow a company to obtain your billing information from partner sites, among other tricks.
Protect Yourself: "Legalise is put out there with the expectation that no one is going to read it," says Wouters. So try a trick of your own to "read" it. Use your Internet browser (click on "edit," then "find" in Internet Explorer, for example) to search for the terms "personal information" or "credit card." It'll highlight each, enabling you to quickly find out, before signing up, how a company will use and share your data. Custom gift creator CafePress, for example, notes in the fine print its right to disclose your personal information to third-party service providers and online partners. "We cannot guarantee that such third parties will not disclose your Personal Information," it states.
5. Fake Sites
Phishing isn't just a bank problem anymore. Scammers aiming to steal your personal account and financial information are increasingly masquerading as web companies like Amazon.com, EarthLink and eBay. Their cover: legit retailer sale spam, which increases 20% as the holiday season approaches, reports web security firm MX Logic. "During those times of the year when you're doing extra shopping, you have to be especially vigilant," says Beth Givens, director of the Privacy Rights Clearinghouse. "If the timing is just right, you've just made a purchase; the phishers' message could get you at a vulnerable moment."
Worse, you don't even need to enter your information on the scammers' fake site to become a victim. More phishers are embedding data-stealing spyware that downloads to your computer as soon as you click on one of the embedded links in the email.
Protect Yourself: Ignore the dire warnings of an account shutdown. "You have to realize that companies are not going to do business that way," says Givens. Don't even follow the link. Open a new Internet browser window and type in the company's real web address. From there, you can log into your account to check for alerts, or look for the toll-free customer service number to address the problem — if there even is one.
6. Counterfeit and Gray-Market Goods
From prescription medications to music, movies and designer clothing, counterfeit goods are a $250-billion-a-year market, according to Business Action to Stop Counterfeiting and Piracy. Because vendors can post pictures and descriptions of the real thing, it's tough to tell what you're looking at until the item is in your hands, says Edgar Dworsky, editor of Consumer World. Consumers can't tell unless the seller is brutally honest — and most aren't, says Dworsky. So-called gray-market items complicate things further. These items are legit and legal, but get to the market through unapproved channels, such as third-party wholesalers and resold store overstock. As a result, manufacturers' warranties don't apply.
Protect Yourself: Do your research by hunting for prices and availability, advises Dworsky. A quick glance at the Cartier web site, for example, should be enough to indicate that Overstock.com isn't one of its authorized retailers. In other words, that $5,080 Cartier Santos Demoiselle men's watch (an 11% discount off the jeweler's $5,700 retail) is covered only by Overstock.com's three-year warranty — not Cartier's unlimited parts warranty. Likewise, a scan of Louis Vuitton handbag prices on eLuxury should serve as a warning on which eBay listings are far too low to be real. (For more tips on spotting fakes, click here.)
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