Email inboxes are filling up with more offers for
business opportunities than any other kind of unsolicited commercial
email. This a problem, according to the Federal Trade Commission
(FTC), because many of these offers are scams
In response to overwhelming requests from consumers, the FTC
requested email users to forward their unsolicited commercial
email to the agency for an inside look at the bulk email business.
The FTC staff discovered that more often than not, bulk email
offers appeared to be fraudulent scams, and if pursued,
could have ripped-off unsuspecting consumers billions of dollars.
The FTC has identified the following most common 13 scams.
1. Lottery Winner Scam
We received a request to provide our opinion if a company which
claimed to select an individual by their email address as the
winner of a lottery was legitimate. The email stated that
the lottery was sponsored by Bill Gates and Microsoft. The email
didn't provide a company name or web address or contact information
for this lottery company, indicating the probability of a scam.
The return address was a Netscape email address. The amount
was $2,000,000 in this particular case, of course the amount
can vary in different emails. After requesting verification
from Microsoft, we learned that they had not sponsored this
lottery and it was in fact determined to be a scam. Sometime
during this scam you could expect to be asked for your bank
or some other information that could give the scammers access
to your funds. Although this scam is typically very easy to
spot by anyone who knows what to look for, it is often extremely
easy to be drawn into a scam like this hoping that it just might
2. Business opportunities
These business opportunities make it sound simple to create
a business that will bring high income without much work or
cash required. The solicitations speaks of unbelievable earnings
of $150 a day, $1,000 a day, or more, and typically claim that
the business doesn't involve selling, meetings, or personal
contact with others, or that someone else will do all the work.
Many of the business opportunity solicitations claim to offer
a process to make money in an Internet-related business. These
emails are typically short on details but long on promises,
these messages frequently offer a telephone number to call for
more information. In many cases, you will be instructed to leave
your name and telephone number so that a salesperson can call
you back with the sales pitch.
The scam: Many of these business opportunities are illegal
pyramid schemes masquerading as legitimate opportunities to
3. Bulk email
Bulk email solicitations offer to sell you lists of email
addresses, by the millions, to which you can send your own bulk
solicitations. Some offer software that automates the sending of
email messages to thousands or millions of recipients. Others
offer the service of sending bulk email solicitations on your
behalf. Some of these offers say, or imply, that you can make a
lot of money using this marketing method.
The problem: Sending bulk email violates the terms of service
of most Internet service providers. If you use one of the
automated email programs, your ISP may shut you down. In
addition, inserting a false return address into your
solicitations, as some of the automated programs allow you to
do, may land you in legal hot water with the owner of the
address's domain name. Several states have laws regulating the
sending of unsolicited commercial email, which you may
unwittingly violate by sending bulk email. Few legitimate
businesses, if any, engage in bulk email marketing for fear of
offending potential customers.
4. Chain letters
You're asked to send a small amount of money ($5 to $20) to
each of four or five names on a list, replace one of the names
on the list with your own, and then forward the revised message
via bulk email. The letter may claim that the scheme is legal,
that it's been reviewed or approved by the government; or it may
refer to sections of U.S. law that legitimize the scheme. Don't
The scam: Chain letters-traditional or high-tech-are almost
always illegal, and nearly all of the people who participate in
them lose their money. The fact that a "product" such
as a report on how to make money fast, a mailing list, or a
recipe may be changing hands in the transaction does not change
the legality of these schemes.
5. Work-at-home schemes
Envelope-stuffing solicitations promise steady income for
minimal labor-for example, you'll earn $2 each time you fold a
brochure and seal it in an envelope. Craft assembly work schemes
often require an investment of hundreds of dollars in equipment
or supplies, and many hours of your time producing goods for a
company that has promised to buy them.
The scam: You'll pay a small fee to get started in the
envelope-stuffing business. Then, you'll learn that the email
sender never had real employment to offer. Instead, you'll get
instructions on how to send the same envelope-stuffing ad in
your own bulk emailings. If you earn any money, it will be from
others who fall for the scheme you're perpetuating. And after
spending the money and putting in the time on the craft assembly
work, you are likely to find promoters who refuse to pay you,
claiming that your work isn't up to their "quality
6. Health and diet scams
Pills that let you lose weight without exercising or changing
your diet, herbal formulas that liquefy your fat cells so that
they are absorbed by your body, and cures for impotence and hair
loss are among the scams flooding email boxes.
The scam: These gimmicks don't work. The fact is that
successful weight loss requires a reduction in calories and an
increase in physical activity. Beware of case histories from
"cured" consumers claiming amazing results;
testimonials from "famous" medical experts you've
never heard of; claims that the product is available from only
one source or for a limited time; and ads that use phrases like
"scientific breakthrough," "miraculous
cure," "exclusive product," "secret
formula," and "ancient ingredient."
7. Effortless income
The trendiest get-rich-quick schemes offer unlimited profits
exchanging money on world currency markets; newsletters
describing a variety of easy-money opportunities; the perfect
sales letter; and the secret to making $4,000 in one day.
The scam: If these systems worked, wouldn't everyone be using
them? The thought of easy money may be appealing, but success
generally requires hard work.
8. Free goods
Some email messages offer valuable goods-for example,
computers, other electronic items, and long-distance phone
cards-for free. You're asked to pay a fee to join a club, then
told that to earn the offered goods, you have to bring in a
certain number of participants. You're paying for the right to
earn income by recruiting other participants, but your payoff is
in goods, not money.
The scam: Most of these messages are covering up pyramid
schemes, operations that inevitably collapse. Almost all of the
payoff goes to the promoters and little or none to consumers who
pay to participate.
9. Investment opportunities
Investment schemes promise outrageously high rates of return
with no risk. One version seeks investors to help form an
offshore bank. Others are vague about the nature of the
investment, stressing the rates of return. Many are Ponzi
schemes, in which early investors are paid off with money
contributed by later investors. This makes the early investors
believe that the system actually works, and encourages them to
invest even more.
Promoters of fraudulent investments often operate a
particular scam for a short time, quickly spend the money they
take in, then close down before they can be detected. Often,
they reopen under another name, selling another investment scam.
In their sales pitch, they'll say that they have high-level
financial connections; that they're privy to inside information;
that they'll guarantee the investment; or that they'll buy back
the investment after a certain time. To close the deal, they
often serve up phony statistics, misrepresent the significance
of a current event, or stress the unique quality of their
offering-anything to deter you from verifying their story.
The scam: Ponzi schemes eventually collapse because there
isn't enough money coming in to continue simulating earnings.
Other schemes are a good investment for the promoters, but no
10. Cable descrambler kits
For a small sum of money, you can buy a kit to assemble a
cable descrambler that supposedly allows you to receive cable
television transmissions without paying any subscription fee.
The scam: The device that you build probably won't work. Most
of the cable TV systems in the U.S. use technology that these
devices can't crack. What's more, even if it worked, stealing
service from a cable television company is illegal.
11. Guaranteed loans or credit, on easy terms
Some email messages offer home-equity loans that don't
require equity in your home, as well as solicitations for
guaranteed, unsecured credit cards, regardless of your credit
history. Usually, these are said to be offered by offshore
banks. Sometimes they are combined with pyramid schemes, which
offer you an opportunity to make money by attracting new
participants to the scheme.
The scams: The home equity loans turn out to be useless lists
of lenders who will turn you down if you don't meet their
qualifications. The promised credit cards never come through,
and the pyramid money-making schemes always collapse.
12. Credit repair
Credit repair scams offer to erase accurate negative
information from your credit file so you can qualify for a
credit card, auto loan, home mortgage, or a job.
The scam: The scam artists who promote these services can't
deliver. Only time, a deliberate effort, and a personal debt
repayment plan will improve your credit. The companies that
advertise credit repair services appeal to consumers with poor
credit histories. Not only can't they provide you with a clean
credit record, but they also may be encouraging you to violate
federal law. If you follow their advice by lying on a loan or
credit application, misrepresenting your Social Security number,
or getting an Employer Identification Number from the Internal
Revenue Service under false pretenses, you will be committing
13. Vacation prize promotions
Electronic certificates congratulating you on
"winning" a fabulous vacation for a very attractive
price are among the scams arriving in your email. Some say you
have been "specially selected" for this opportunity.
The scam: Most unsolicited commercial email goes to thousands
or millions of recipients at a time. Often, the cruise ship
you're booked on may look more like a tug boat. The hotel
accommodations likely are shabby, and you may be required to pay
more for an upgrade. Scheduling the vacation at the time you
want it also may require an additional fee.