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Tough Money: Technology

'Surfing' for a New Job? Need to Use Caution

The Internet is teeming with employment opportunities, but not all of them are legitimate.

March 24, 1997|NANCY RIVERA BROOKS | TIMES STAFF WRITER

"Work at Home!!! New, Internet Company looking for consultants. No experience needed. No computer required. Income $2,000-$5,000. Minimal investment required."

If that job opportunity sounds good, then we've got some desert real estate that might interest you.

Just as the Internet has opened up exciting new vistas of worldwide communication, so has it expanded the chances for fraud. That job pitch came from an actual advertisement for Internet consultants, and it raises all the warning flags of a too-good-to-be-true proposition.

The Internet is teeming with job openings that are only a modem away, but not all of them are legitimate, consumer advocates warn.

"The World Wide Web is an ocean of knowledge with a few sharks in it," said C. Steven Baker, director of the Federal Trade Commission's Chicago regional office, which houses the agency's Internet fraud detection operations.

A recent report on efforts to combat consumer fraud by the FTC noted that the last decade has seen a shift to entrepreneurship by many Americans.

"Fraud promoters target these consumers with false claims of lucrative franchise and business opportunities or stable employment, promising that their services will provide consumers sustained income. They have captured millions of dollars from consumers through these craftily marketed promises," the report said.

"Scam operators have seized upon computers and the Internet as new vehicles to promote and operate deceptive businesses. Scams now operate from home pages, as fraud promoters communicate across cyberspace, luring consumers into a variety of fraudulent business opportunities."

Internet job scams come in a variety of mutations.

There are the work-at-home scams, where victims are asked to send money to participate in such tempting opportunities as an envelope-stuffing business, an Internet-consulting operation or medical-billing software operations.

There are job-placement scams with help-wanted advertising that can be virtually indistinguishable from legitimate job-search agencies. The con artists charge processing fees and finder's fees upfront, but rarely deliver promised jobs with government agencies, travel companies such as cruise lines, Fortune 500 corporations or overseas employers. Frequently consumers get little more than a job application that they could have obtained themselves, Baker said.

Perhaps most damaging are the franchise or business opportunities that require sometimes significant initial investments but provide worthless business plans, or nothing at all.

The government has been actively pursuing Internet fraud for less than two years, and its first major crackdown came last March when nine firms--two in Southern California--were charged with making false claims on the Net. Most settled the charges and agreed to stop the alleged fraud or face fines of up to $10,000 per violation.

DCM Publishing Group in Mission Viejo was among the companies charged with operating a work-at-home scam on the Internet. Company ads urged consumers to send $9.95 for a book that would supposedly show them how to set up at-home publishing businesses that would earn $4,000 or more each month. The company was unable to substantiate the earnings claims, the FTC said.

Consumers surfing the Net for jobs should exercise the same sort of caution they would with any printed advertisement, Baker said. Frequently, earnings claims are "pulled out of thin air," he said.

Any operation that requires money upfront should cause consumers to be suspicious, Baker said. Consumers need to demand disclosure documents before investing in business opportunities and should investigate all claims thoroughly. Report any fraud immediately, Baker urged.

Consumers can use the Internet to obtain information on potential fraud, he said.

The nonprofit National Fraud Information Center has set up an Internet Fraud Watch at http://www.fraud.org that posts fraud reports and gives consumers a way to complain online. It can also be reached at (800) 876-7060.

The FTC also has a Web site at http://www.ftc.gov with fraud information, tips on avoiding scams and advice on how to report fraud. The Council of Better Business Bureaus has a Web site at http://www.bbb.org and is launching a venture called BBBOnline that will award a seal of approval to companies that agree to follow certain business practices.

Consumer World (http://www.consumerworld.org) is another helpful Web site with links to many sources of consumer information, Baker said.

Ultimately, skepticism is the consumer's best weapon against fraud, he said.

"When people get ahold of you and tell you you're going to make a lot of money, you want to believe," Baker said. "If someone called and said, 'This is Joe Smith from Precious Metals and you have a terminal illness,' you would be suspicious and you'd get a second opinion. But if he said, 'You've won $25,000 and I'm going to have someone go by your house tomorrow with a check,' you'd say, 'All right!' People want to believe."

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