Beware of Internet Risks

The Internet is changing the way we save, borrow and invest. The vast amount of financial information on the Internet can be troublesome. Finding the right information, making sure it is accurate and from a trustworthy source is critical.

Reliability of Financial "Advice"

The "open" nature of the Internet makes it easy for con artists to promote their "get rich quick" ideas. Be especially wary of investment chat rooms and bulletin boards. A tip might be a promoter's attempt to push up a stock price, just to unload their shares.

Rules to remember:

• When something sounds too good to be true, it may not be true.
• Be wary of unfamiliar companies offering investments.
• Be wary of hype. You may not know who is saying what and why.
• Check out sources of information that seem suspicious.

The Privacy of Personal Information

The technology used throughout the "Internet process" also gives rise to concerns over the privacy and use of personal information you may disclose when visiting different web sites.

Many Web sites ask for personal information, such as age, name, e-mail address and more. In some cases, that information is sold to others so they can direct promotional efforts toward you over the Internet or through the mail. In some cases, those additional promotions may be of use. You may get special offers for products and services you are interested in. But in some cases, it may just result in further junk e-mail.

One way to understand how different Web sites treat this type of information is to look for a posted privacy policy. Most companies with major a Internet presence have policies that describe how they may or may not use any personal information they may obtain.

The issue of personal privacy on the Internet will probably become more visible as more people use this communication tool. Congress is considering legislation that would regulate financial sites. Probably, the most important thing you can do is to be aware of the policies of the sites you visit most often.

The Security of Internet Transactions

Most of the publicized Internet hacking has caused problems for the Web site companies. The hackers have tried to overload the system, not perform illegal transactions. Most sites that offer purchasing capabilities with a credit card use a password protected system with encryption and high-level security. Since Congress enacted a maximum loss of $50 in the event of unauthorized credit card use, using a credit card has become safer than writing a check.

Conclusion

The Internet is a new communication device that can present some additional risks. But, as with most things, common sense will provide a relatively high level of safety. Here are a few pointers:

• Don't believe everything you see on the Internet, especially if it is coming from unknown sources.
• Never give out your passwords or any PINs.
• Beware of things that sound too good.
• Most importantly, do business with those individuals and companies you can trust.

Seller Beware—New Counterfeit Check-Writing Scheme

Just when you thought you’ve heard about all of the latest Internet scams, here is another one involving a phony cashier’s or corporate check used to pay for merchandise. The checks are “accidentally” made out for a substantially larger amount of money than the purchase price. The victim is instructed to deposit the check and return the overage amount via wire transfer to a foreign country.

The reason why this works is because banks may release funds from a cashier’s check before the check actually clears. When the victim believes that the check has actually cleared, he or she would then wire the overage amount money as instructed. The check is fake and will never actually clear. The victim is then out of the overage money that he or she has wired to the scammer.

Another variation of this scheme has occurred with Internet purchases such as automobiles that are listed in various Internet classified ads. A potential buyer, who is the scammer, would contact the seller about purchasing the automobile and arranging to have it shipped to a foreign country. The buyer would send a check for several thousand dollars over the actual cost of the vehicle, with the idea that the overage money is to be used to pay the supposed shipping charges. The seller is instructed to wire the excess money back to the buyer. Once the money is wired, the buyer comes up with an excuse for canceling the purchase and attempts to have the rest of the money returned.

In the end, the seller does not lose the vehicle, but the seller is held responsible by his or her bank for depositing a counterfeit check, not to mention the “overage” funds that he or she wired to the buyer and any other money sent back during the scam.