Scams, Shams and Spams

• Online-Auctions. While most auctions are legitimate, the individuals selling items might be scammers. The sellers might not deliver the sold goods once they have received payment. Alternatively, the goods may be different from what was promised. In some cases, online auction sites may be fraudulent setups where buyers purchase items that don't exist.
  What to do: Determine whether there are any prior complaints against the site by using this site or other available sites. Wherever possible use a credit card which will allow you to contact the credit card to stop payment if you are scammed. Some auction site also keep ratings on sellers to give an idea on how reliable a seller is. Of course scammers can use new aliases to avoid detection. You can also contact an escrow agent who can hold on to the payment until you receive what you bargain for.

• Pump-and-dump stock scams. Thinly traded small capitalized companies hire promoters to pump up their stock price and get investors to buy the insiders' stock at inflated prices. After buying the stock at inflated prices, the innocent investors find the stock prices plummet.
  What to do: Do your own research. Ask the promoter whether he is getting paid by the company to promote its stock. Ask your broker about the company. Call the stock exchange to see if there are any prior complaints against the company. Also check our Complaint Database for prior complaints.

• Multilevel Marketing/Pyramid Schemes. Individuals are recruited by other individuals to pay a monthly fee to recruit other individuals into a program. There are not usually any goods or services that are to be sold. Individuals are promised money based on the number of individuals they are recruited only to find in the end that the organizer disappears with the monthly fees.
  What to do: Never invest in something which yields a return based on recruiting other individuals.

• Credit Card Cramming. Internet service providers charge a subscriber additional items that never ordered have been charged or crammed onto the credit card.
  What to do: Always review your credit card bills to determine whether there are any line items costs which you did not order and act right away to dispute the bill.

• Online Credit Repair. People are fooled into believing that for a fee any negative information on a credit report can be removed. The fee is paid and the information is not removed since it is illegal to remove information from a credit report.
  What to do: Beware that this service is illegal and can't be done.

• False Money Making Opportunities. There are many promotions on the internet advertising ways to make money quickly for various business opportunities. Once the individual pays the required fee for the secrets behind how to make easy money, he receives worthless pamphlets, brochures and videos.
  What to do: Avoid these opportunities since there are no quick rich schemes that work. Check our Complaint Database or the local Better Business Bureau to determine whether there are any prior complaints against the company for promoting these schemes.

• Sale of Misleading Health Products. Scammers advertise health formulas or products that, among other things, promise to help you lose weight without exercising or pills that help you regain hair loss.
  What to do: There are no magic pills to lose weight or regain hair loss. Ask your local pharmacist or doctor if he has ever heard of the product.