Welcome to the State of California - Department of Corporations' website

Right Column

Education & Outreach — Internet Scams & Hoaxes

The Department of Corporations wants to help you recognize Internet hoaxes and scams!

Scams

Scams are becoming more common on the Internet. Criminals are constantly devising new ways to separate you from your money. The Department of Corporations has provided below some basic ways to identify a scam and some tips to prevent you from being caught in one.

Recognizing Online Scams and Fraud

Things to watch out for:

  • Requests for financial information - There are only a few real reasons anyone could need your credit card number, the main one being that you are making an online purchase. If so, ensure it is a reputable merchant and that the information is being encrypted. Some sites claim to need credit card numbers as proof of age. A credit card number is not proof of age, and credit card theft on the Internet using these tactics is skyrocketing. Do not give your number out if you don't know exactly who you are giving it to and have a means of recourse if something goes wrong.
  • Big Promises - Claims such as "Make money in your spare time," "Earn thousands per week!" or "guaranteed income" are almost always sure signs of a scam. Excellent opportunities sell themselves, they don't need to be sold to you through big time pressure and promises of riches.
  • High Pressure Tactics - Don't let yourself be forced into a deal you are not sure of. Statements like "sign up now or the price will increase." A legitimate deal probably isn't going to move as fast as your money. Don't let yourself be pressured, stop, think things through before making a decision. It's no different than dealing with door to door salespeople.
  • Prizes - Promises of prizes and money almost always come with catches, or are blatant lies. Watch in particular for "prizes" where you have to pay something up front to claim it (that includes postage fees).
  • The word "FREE - "When you see the word Free, you should expect a catch, if not outright lying. Always view this word warily, especially when it shows up in Spam and on un-reputable web sites. Some sites will offer you access to content for "free" if you provide a credit card number as proof of age. As stated above, a credit card number is not proof of age and what the number could be used for once you give it up is probably NOT worth the risk.
  • Having to send money before receiving a product - This is particularly the case with Online Auctions. Take extreme caution when participating in Internet Auctions, and be sure to use an escrow service. Auctions comprise the most commonly reported method of Internet fraud. For an excellent brief on other methods of fraud and signs to look for, visit the Federal Trade Commission's consumer protection pages.
  • Remember the old saying, "if it sounds to good to be true, it probably is."
Scam List
Hoaxes

What is an Internet Hoax?

Internet hoaxes and chain letters are e-mail messages written with one purpose; to be forwarded to everyone you know, by YOU! The messages they contain are usually untrue. A few of the sympathy messages do describe a real situation but that situation was usually resolved years ago so the message probably has not been valid for many years. Hoax messages try to get you to pass them on to everyone you know using several different methods of social engineering.

Chain letters are lumped in with the hoax messages because they have the same purpose as the hoax messages but use a slightly different method of coercing you into passing them on to everyone you know. Chain letters, like their printed ancestors, generally offer luck or money if you send them on. They play on your fear of bad luck and the realization that it is almost trivial for you to send them on. The chain letters that deal in money play on people's greed and are illegal no matter what they say in the letter.

Virus hoaxes are more than mere annoyances, as they may lead some users to routinely ignore all virus warning messages, leaving them vulnerable to a genuine, destructive virus. The next time you receive an urgent virus warning message via email, be sure to check a list of known virus hoaxes. Remember: Never open an email attachment unless you know what it is--even if it's from someone you know and trust. Also, remember that virus writers can use known hoaxes to their advantage. For example, the AOL4FREE virus began as a hoax virus warning but then somebody distributed a destructive Trojan attached to the original hoax virus warning.

Hoax List

Federal Trade Commission BIZOPPS Program

Business Opportunity e-Card (english) (español)
This :30 animation features a princess considering various bizopps and a helpful frog who lets her know they're "RRRRRRRR-ipoffs." Consumers can forward the message to friends and family to spread the word that "Easy money is a fairy tale." (Make sure your speakers are on for the full effect.) Banners and buttons advertising the e-card are attached.

Teaser Site (english) (español)
Who wouldn't be interested in Sundae Station ice cream vending machines -- "a proven system guaranteed to generate $10,000 - $25,000 - even $50,000 a month for motivated entrepreneurs"? But when consumers click for more info, they learn Sundae Station is not their recipe for the Sweet Life. It's a fake, posted by the FTC to warn consumers to think twice before sinking their money into what might be a rip-off

BIZOPPS Web page (english) (español)
The FTC has compiled their bizopps materials onto one page. Find brochures with tips for consumers on spotting some of the most common bizopp rip-offs -- pyramid schemes, envelope stuffing, work-at-home scams, medical billing, vending, etc.

If you feel you have been a victim of a scam or fraud contact us.

Make sure you add any details that may be important to documenting the problem and stopping it from happening again.