With the growth of the internet, almost every business is initiating its first contact with clients online. The web has opened an avenue where everybody can be a seller and anybody can be a buyer. Even for businesses with a physical location, most customers today prefer to have their first interaction online before deciding to walk to the store.
While the internet has come with a lot of opportunities, it has also paved ways for fraudsters to deep their ugly hands into your financial pockets. Today, most of the biggest and harrowing frauds are happening online. A study by Gartner Research shows that at least 70% of frauds have a web origin.
To help you stay on the lookout, we have compiled a list of the top five common and popular frauds to avoid in 2016 and beyond.
Imagine receiving an email from a “reputable” energy drinks company offering to pay you a whopping $400 per week to have their advertising bumper stickers on your car. The email appears to be very formal and company agents are even willing to communicate with you through the phone.
Within a few days of interaction, you receive the first check with instructions to deduct your $400, and wire transfer the remaining amount to the graphic artist who will be installing the wraps on your car. Won’t you be smiling all the way to the bank, ready to cash in your check and enjoy the fruits of no labor?
I bet you would; that is what the victims of these fraudsters have been doing. You will deposit the check as required and even wire transfer the “extra” money to the purported graphic artist. A few days later you receive a call from the bank asking you to pay the bounced check fees for the check you cashed in was counterfeit, and therefore can’t be processed.
To top it all, the money that you wire-transferred to the graphic artist is gone, never to be traced. You have joined the long list of unsuspecting individuals who have fallen into the hands of fraudsters while trying to supplement their income.
Some of the brand names mostly used by these scammers include the full throttle and Rockstar Energy drinks.
The Craigslist overpayment scam
If you have been selling things on Craigslist, you will agree with me that this platform is the home to most informal business negotiations on the internet. While most people have been able to strike amazing deals on the site, there are those who have fallen into the hands of fraudsters.
The fraud begins when the buyer sends you a check that is much more than the price of the product you sold to them. Once you receive the check, they will contact you claiming to have made a mistake and ask you to wire the extra money back to them.
Like a good soldier of Christ, you will wire the overpaid amount as requested only to be contacted by the bank that your check didn’t go through because it was counterfeit. At this point, the buyer is untraceable and the bank is on your shoulders demanding that you pay the bounced check fees.
Recurring Billing Scam
Some product makers convince buyers to hand over their credit card to purchase their product, then put in the fine print that they will continue to be charged and auto shipped new product every month. It can take several months before you realize you are still being charged.
Often times the product is not worth buying once, much less twice and so on. One such example is the Bedroom Guardian Scam. They are a bed bug company headed by someone living in Hong Kong, marketed online by someone who has admitted to inverting his company and legally moving it overseas to avoid paying US taxes, and have multiple negative remarks with the Better Business Bureau.
Bedroom Guardian continues to charge you for a tiny amount of product until you call their Phillipines based call center and cancel, which can take hours. Some people have gone months before being able to cancel and it continues to be a potential threat to your monthly income and credit rating.
The Online Escrow Service Scam
As a buyer on craigslist, you contact a seller regarding an expensive item such as a car or a boat that is selling at a considerable price. You negotiate with the seller and settle on a price that is very favorable to you. For the protection of both of you, the seller requests you open an escrow account with a specific provider.
You have never heard of this provider but as the seller puts it, they are the best in the market right now. With the excitement of getting the best deal ever, you open the escrow account with the seller’s suggested provider and deposit the funds.
Once the funds hit the account, the provider ceases to exist and the seller disappears. You have fallen into the trap of fraudulent seller with fake escrow services. To avoid this scam, always ensure that you use a well-known escrow services provider.
Weight-loss products scams
With most of us struggling with weight loss issues, the scammers are taking advantage and selling us fake products with a promise that we will see the results in a few days. Some of these scammers have gone a little bit far by introducing poisonous products that have ended killing consumers.
For instance, a diet pill known as DNP, which is said to increase the body’s speed to burn off fat, have been found to be highly toxic when ingested in large amounts. The pill contains Dinitrophenol, a lethal substance used as a pesticide. Most of these fake weight-loss products are sold online by unlicensed dealers.
In the recent past, weight-loss products from companies such as HCG Diet direct, LeanSpa, Sensa products, and L’occitane have been identified as fake and banned by the Federal Trade Commission. While the crackdown is still on, there are still other fake products selling online. To avoid these scams, always ensure that you do proper research on a product before purchase.
The premium bottled water scam
Forget about big items such as cars and boats, if you are not careful, you might find yourself spending $50 or more on a bottle of water. While water is a legally saleable commodity, there is no reason to inflate its value and sell it at ridiculous prices.
What these companies do to get you on the hook is to present the water in a poetic language with lies that water is not just water. Some of these bottled water company will even tell you that their water structure has been altered and hence has the capabilities to help you maintain good health, youth, and vigor.
If you happen to stumble on one of these online bottled premium water companies, always remember that water is just water and you do not have to pay a fortune for it.
With the increasing rate of fraud in 2016, it is time to be on the lookout for the above frauds and many others.