The Internet: World Wide Web of Scams
The internet serves as a great vehicle for investors, large corporations and small business owners. It provides an easy and affordable way to research numerous opportunities and contact millions of probable clients. At the same time, the internet is a reliable tool for hackers and scam artists. Because of this, it is very important to always exercise caution before making an investment you discovered online.
Where Internet Scams Take Place
The internet is an open platform that allows individuals and corporations to communicate with a huge audience. This can be done by expending little time, effort and money. Anyone with an internet connection can reach their target audience by creating a website. From there they can establish a blog, implement a live chatroom, or distribute mass emails promoting their products and services. Pawning this material off as legitimate makes it almost impossible for consumers to distinguish fact from fiction.
Email: Since spam (junk email) is so inexpensive and simple to create, scam artists are increasingly using it as a vehicle to find dream seekers looking to make it big on the internet. Some will use email as a means to falsely spread negative information about another company. Using spam, potential criminals have the ability to distribute messages in bulk to thousands or millions of internet users at the same time.
Social Networking: Whether it's a USENET newsgroup, blog or a web-based bulletin board, these platforms have become known for initiating scams. Bulletin boards usually feature threads that enable visitors to leave comments. These sections often become congested with spam messages baring numerous investment scams. Con artist will typically advertise their own service or elude to reveal inside details regarding popular topics, commercial products or prosperous contracts.
When traveling through the internet, you can never be sure of who you're actually communicating with. The fact that many social networking sites allow people to hide behind aliases, tracking these individuals and putting a stop to their scam is a difficult task. The internet makes it very easy for someone to portray themselves as a shareholder of a large company, a paid promoter or a company insider. A creative person with criminal intent can easily create an illusional interest in small, rarely traded stocks by posting numerous messages under different aliases.
Investment Newsletters: Hundreds to thousands of investment newsletters have surfaced on the internet over the past few years. Many will offer what appears to be unbiased information regarding commercial companies or recommend "the hottest stocks of the week". Though a few newsletters are legitimate and provide valuable information, some of them are motivated by financial scams.
A few newsletters will falsely claim to conduct independent research on all profiled stocks. Others are bold enough to distribute information on or advertise stocks that are completely worthless. If a scam artist is able to succeed, they turn handsome profits while swindling innocent investors out of their hard earned funds.
If you have been victimized by a web-based scam, you can take action by submitting a complaint with the SEC (Security and Exchange Commission): www.sec.gov/complaint.shtml
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