**Online
Scams:****Potholes on the Information Highway**March
  1996There are approximately 15
  million Internet users in the United States. That number is increasing each
  month, according to industry sources. The largest commercial online services
  have an estimated five million subscribers nationwide. All are considered
  potential targets from the scam artists' point of view.The latest "hazards"
  on the information highway are scams broadcast over computer networks and
  electronic bulletin board services. The scams aren't new, just the medium.
  Some con artists who used telemarketing, infomercials, newspapers, magazines,
  and the mail to attract consumers are turning to the Internet and the online
  services of cyberspace to promote their scams.The Internet and the
  many commercial online services provide a valuable new information source for
  consumers. However, cyberspace has another side: fraudulent sellers use these
  computer services to promote bogus stock offerings, credit repair services,
  and exotic or high-tech investment opportunities. Promotions for ineffective
  weight-loss and health-related products and programs also appear online. The
  bottom line is: treat all ads with skepticism. Never make an investment or
  major purchase decision based on information from one source -- whether it's
  print, broadcast, or online.Advertising
  on Online ServicesMost questionable online advertising is either
  classified advertising or "disguised advertising."Classified
  AdvertisingNo matter where
  you find classified ads online, you are likely to find some false and
  misleading claims. For example, many classified ads promote quick and easy
  weight-loss products and programs. It is unlikely that any of them can deliver
  what they promise.Another hot area in the classifieds is "business
  opportunities." Traditional "work-at-home" schemes, such as
  making handcrafts or stuffing envelopes, have been replaced by offers to "use
  your home PC to make money fast in your spare time." Other ads encourage
  consumers to invest in communications technologies, such as "900"
  number telephone services, with promises of high returns and low-risk. The
  investment attraction of "900" number pay-per-call services is the
  potentially high profit to be made -- 20 percent or more -- from the $3-to-$5
  a minute fees charged to callers by the 900 service provider. The marketers
  promises on these investments are likely to be false."Disguised
  Advertising""Disguised
  advertising," may be difficult to recognize. Bulletin boards and chat
  forums may include areas where comments about the quality or performance of
  products or services may be ads in disguise.The Internet and the
  commercial online services provide bulletin boards where interested parties
  can exchange information in general topic areas. In some cases, individuals
  contributing to the bulletin board have financial ties to companies or
  businesses that sell products or services related to the bulletin board
  subject area. This may not be obvious to the online user. What may appear to
  be an open discussion could be a sales pitch in disguise. Because the
  identities or affiliations of online bulletin board operators and participants
  may not be known, it could be difficult to detect disguised advertising.Some
  commercial online services also provide live discussion groups called "chat
  rooms" or "chat forums." Service subscribers can "drop by"
  for an online conversation by typing in their comments. These forums provide
  the chance to discuss a variety of subjects, including products and services.
  Some marketers have used these chat forums to promote their products without
  disclosing their interests.Tip-offs
  to FraudRead online ads and "conversations" with a
  healthy dose of skepticism. The same signals that tip you off to potential
  frauds in print and on television are apparent in cyberspace. Here are some
  warning signs of questionable online advertising:Overstated claims of product effectiveness. Use of hype titles and
    frequent use of the word "hot" to describe an investment
    opportunity can indicate a scam.
  Exaggerated claims of potential earnings or profit.
  Claims of "inside" information.
  " Pump and Dump" promotions of cheap stocks promising high
    returns.
  Promotions for exotic investments such as ostrich farming, gold mining,
    or wireless cable TV.When you make any decisions about investments or products, be careful.
  Check a variety of sources and references before you buy.For
  More InformationIf you have a question
  or complaint about an online ad or promotion, contact your commercial service
  provider. You also may file a complaint with your local consumer protection
  office, state Attorney General, or the Federal Trade Commission. Write to:
   Consumer Response CenterFederal
    Trade CommissionWashington, DC 20580 Or, contact: 
  National Advertising Division of the Council of Better
    Business Bureaus,  845 Third Avenue New York, NY 10022If
  you have questions about whether an investment sales person is licensed or an
  offered security is registered, contact the  Office of Consumer AffairsSecurities and Exchange Commission(202)
  942-7040The National Fraud Information
    Center maintains a toll-free Consumer Assistance Service,
  1-800-876-7060, to provide information about telephone or mail solicitations
  and online scams. They also tell consumers how and where to report fraud and
  how to file complaints.The Federal Trade Commission publishes free
  brochures that explain fraudulent sales practices and how you can avoid them.
  For a complete list of publications, write for a copy of Best Sellers at:
   Consumer Response CenterFederal
    Trade CommissionWashington, DC 20580 (202) 326-2222 TDD
  (202) 326-2502