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NEW YORK (AP) - The growing popularity of doing business on the Internet is
causing a "substantial increase" in fraud schemes affecting the public, the
city's consumer affairs watchdog says.
"Internet fraud runs the gamut from work-at-home scams to bogus travel and
vacation schemes, to securities fraud and investment scams ... for many
consumers the Internet can be a virtual nightmare when it comes to fraud,"
Consumer Affairs Commissioner Jane Hoffman said Sunday in a statement
detailing a host of rip-offs tabulated by her agency.
The statement was timed to the release of a brochure, "Web of Lies,"
designed to help consumers avoid being cyberscammed.
According to the National Consumer League, the average loss from Internet
fraud rose from $310 per person in 1999 to $427 in 2000. The total losses
last year ran to $3.3 million as Internet commerce reached $220 billion.
Web auctions, among the five most common Internet scams, accounted for 64
percent of all fraud, mainly in the form of goods not delivered as promised,
inflated prices and fake bids designed to raise sale prices, Hoffman said.
The other four were travel and vacation scams with hidden costs, theft of
identity such as ID numbers, bank account data or passwords, fast-paced
"pump and dump" investment schemes and pyramid schemes that use mass
e-mailings to promise windfall profits.
Hoffman said consumers should be wary of investment postings circulated in
chat rooms, avoid any business that lacks a physical address and a phone
number and should never give out a Social Security number on a Web site.
"Always use common sense," she said. "If you have a gut feeling that
something is not legitimate, you are probably right."
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