The Internet is rife with schemes that start with an e-mail and end up emptying your bank account...
by Lynn Brenner

Online fraud is a thriving business.  The target customer?  You.  Sure, you can spot e-mail offers that are too good to be true ("Earn $50,000 to $80,000 a year stuffing envelopes at home!"), but even as your finger hits the delete button, you may wonder wistfully, Can I really be sure it's a scam?

Trust me:  You can be sure.  The worldwide cost of online fraud is estimated at more than $100 million a year.  Reported losses alone topped $22 million in the last two years, says the National Consumers League (NCL).  Here's what you need to know about Internet rackets and why smart people fall for them.

CONS FEED OUR FANTASIES

Con artists don't just play on greed.  They make you feel like you're getting the luck and recognition you deserve.  The stranger who offers you millions of dollars to help him smuggle a fortune out of Hong Kong is singling you out to star in a real-life drama, even if his script is inadvertently hilarious:  "I am Mr. Wang Qin, credit officer of the Hang Seng Bank.  I have a concealed business suggestion for you...A Head of State abandoned a Diplomatic Trunk Box in our warehouse prior to his sudden death...containing about $36.5 million.  Let us partnership together."

Other frauds aren't as easy to recognize -- or laugh at.  One e-mail ring preys on people who are in desperate financial need, promising them guaranteed credit for a fee.  "To the victims, it seems like a helping hand.  In reality, it's a hand reaching into their pocket for their last dime," say Susan Grant, director of the NCL's Internet Fraud Watch.

Sadly, this scam attracts people too inexperienced with credit to see through it.  "A legitimate lender will never charge a fee to guarantee a loan or a credit card," says Deborah Platt Majoras, chairman of the Federal Trade Commission.

DON'T FILL IN THE BLANKS

A "phishing" scheme uses phony e-mails and Web sites to get personal financial information.  The e-mail claims to be from your bank, credit-card issuer or a big-name retailer.  It asks you to "confirm" your data by clicking on a link to a Web site (it looks just like the real thing), where you fill in all the facts identity thieves need.  Sometimes they dangle tempting bait:  A recent phishing operation offered Harry Potter fans an advance electronic copy of J.K. Rowling's upcoming book.  Rowling, who has never licensed electronic versions of her books, blew the whistle on the crooks.  As many as 150 million such e-mails are believed to be sent out every day.

YOU'LL PAY AND PAY AND...

The basic con is very simple:  You're persuaded to pay for something you never get.  Eventually, you wise up -- or run out of money.  If you respond to a notice that you've won a foreign lottery, for example, you will later learn there's an advance tax on the prize.  If you answer an e-mail inviting you to run a very legitimate-sounding insurance-billing service for medical professionals from your home, you'll gradually discover there are fees fro training materials and computer equipment.

The granddaddy of e-mail scams is the "Nigerian" letter.  Here is the typical yarn:  A civil servant or banker in a foreign country has discovered an unclaimed multimillion-dollar bank account.  He urgently needs your help to get this money out of his country.  You'll get a 15% to 40% share.

All you need to provide is your bank-account number, address, phone and fax numbers.  You get back "legal documents" confirming imminent transfer of the money.  Your "friend" reports that everything is going perfectly.  Then there's a last-minute hitch -- a tax, fee or bribe that must be paid before the money can be transferred to you.  You pay it.  And it's the first of many fees, each one described as the last.  Law-enforcement agencies say the more the victim pays, the more fervently he or she believes in the scam.  These thieves get you to empty your bank account for them.

THE COUNTERFEIT CHECK

In a recent con, the criminal starts by sending you a check or money order.  Let's say you post a résumé or an item for sale online.  He says he wants to hire you or buy what you're selling.  He offers to send you a check from somebody who owes him money -- a check for more than your wages or asking price.  You are instructed to deposit the check and wire the excess to the scammer or someone else.

Your bank must make deposited funds available to you within five days.  But his check is a skillful forgery that may not bounce for three weeks, explains Susan Grant.  When it does, your bank subtracts the amount of that check from your account.  The average loss for this scam is $5201.

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THE BASIC PRECAUTIONS
Your best defense is to follow a few simple rules:

Never agree to a transaction that requires you to wire a money order or send cash or a check overnight.  Paying by credit card is safest, since you have a better chance of reimbursement, says Ken Dreifach, chief of the Internet Bureau in the office of New York Attorney General Eliot Spitzer.  "People assume it's safer to pay by check, but nothing could be further from the truth."

Beware of a P.O. box return address.  "We've seen scams in which New York mailboxes turn out to be registered by someone in Seattle on behalf of someone in Australia," says Dreifach.

Don't be cajoled or bullied into a hasty decision.  No legitimate merchant requires immediate purchase or refuses to send you additional information.  Hang up immediately on anyone who turns sarcastic if you hesitate or express skepticism.  ("Well, I can see you don't need this
$1 million.  Pardon me for wasting your time!")

Never accept a lottery prize that requires a payment, handling fee or purchase.  A few dollars may seem like so little to gain a huge prize...but the prize isn't really there.

Visit www.parade.com and click on "WebLinks" to learn more about Internet scams.