The Federal Trade Commission dismantled a work-at-home scam last week that defrauded unsuspecting consumers out of millions of dollars. Two brothers, Eric G. Louie and Calvin G. Louie, misled consumers with false earnings claims for work-at-home schemes involving free government grants, mystery shopping, online surveys, and data entry.

According to an FTC press release, the Louie brothers charged consumers from $47 to $129 to access their “members only” Web sites with their “money-making secrets.” Not surprisingly, these programs either failed to exist or deliver easy money. Almost all the sites these scam artists ran are now disabled, including: Fastcashathome.com, Fastcashathome.homestead.com, Moneymakingsecret.homestead.com, Realcashprograms.com and Dataentrypro.com. One of them, Hometypers.com is still up and running, although the domain name is for sale.

The only people who earned easy money from these sites were, of course, the Louie brothers. The L.A. Times reports Eric Louie owned a $160,000 2004 Lamborghini Gallardo. Brother Calvin had slightly more expensive taste, using his ill-gotten earnings to spring for a 2005 Ferrari F430, which boasts an MSRP of $171,000.

Unfortunately for the two Louies, unless they want to cough up a $4.9 million fine, they’re going to have to surrender their sports cars, some frozen assets and any tax refunds for 2005 and 2006. If you want to prevent other scammers like these two from using your money to buy themselves six-figure Italian sports cars, exercise extreme caution before you even consider doing business with any work-at-home sites.

First off, read our tips for avoiding work-at-home scams, and our recent posts about Online Data Entry Jobs and Consumer Rated Home Based Businesses. Both the FTC and BBB also offer helpful fact sheets on avoiding these increasingly popular scams.

Posted by Jorgen Wouters at 11:55 AM | Permalink | Comments (1)

This is the tenth fact sheet in Consumer Reports WebWatch’s “Look Before You Click” campaign, funded by the New York State Attorney General’s office, to help New York state consumers avoid problems online.

You might be using a laptop computer for home and business purposes. You may even have set up your own wireless network at home with routers, signal boosters and repeaters to reach all the rooms in your home. Did you know using Wi-Fi and home networks creates some unique security and privacy risks? Here’s how to protect yourself from identity thieves, “freebooters” who steal your home wireless network signal, or hackers looking to attack your machine in the relative tranquility of a Wi-Fi hotspot at the airport coffee shop.

Click below to read how and share your feedback.

Remember that Wi-Fi hotspots are public places where people connect to the Internet. Using easily available software, others might be able to see what Web sites you are looking at, see your login information at sites not secured by SSL (chat rooms, for instance), and possibly see the contents of documents on your machine.

What to do? First, follow the same basic rules for computer security you’ve read about in our factsheets and on the Consumer Reports WebWatch site: Use an active anti-virus program (one that continuously installs updates based on the latest threats); install a spyware cleanser to remove badware from your machine; enable your firewall; and download security patch updates from your operating system’s manufacturer.

Use encryption to scramble communications. If you have a choice, use Wi-Fi Protected Access (WPA), which is stronger than Wired Equivalent Privacy (WEP), though you may need to buy newer equipment. If you have access to a virtual private network (VPN), take advantage of its security, though if it’s provided by your employer, you should consider what you will be using it for.

If the Wi-Fi service requires setting up payment for use, make sure you read all terms and conditions, and pay attention to security and privacy information. Finally, you may also want to consider doing your home banking and credit-card bill paying from a more secure, less public place.

The issues, and solutions, are similar when using a home network. Turn off identifier broadcasting on your wireless router, so it won't send a signal to any device in the vicinity announcing its presence. Turn off your wireless network when you know you won't use it. Make all your personal passwords tougher to crack, and reset manufacturer's default passwords.

Posted by Jorgen Wouters at 03:07 PM | Permalink | Comments (0)

This is the ninth fact sheet in Consumer Reports WebWatch’s “Look Before You Click” campaign, funded by the New York State Attorney General’s office, to help New York state consumers avoid problems online.

These days, the life cycle of a computer is short, and people are often looking to upgrade, buy, sell or recycle. Many people believe that when they dispose of their old computer, the files they've erased from their hard drive are gone forever. That’s wrong! For your personal security and safety, you need to make sure you “complete delete” before your computer or hard drive leaves your possession.

Click below to read how and share your feedback.

This means recycled machines as well. Just as identity thieves hunt garbage dumps and trash cans for information they use to steal your identity, so do they look for any opportunity to mine unused or junked computers for data. You should buy a paper shredder to dispose of all those credit card offers you get in the mail, and you should treat the data that may be left behind on your computer in the same manner.

Here’s an example why: Consumer Reports recently bought a handful of hard drives on eBay and tried to recover old files by running simple and inexpensive software that anyone can obtain and use. Here's what the magazine’s testers found: a Microsoft Word tax document that included annual salary information; Quicken files filled with income and expense data; a MySpace account name and password; e-mail from Outlook Express; love letters; photographs; and lists of favorite Web sites. (Don’t worry -- they later erased all that personal data.) Most of those drives were described by their sellers as either reformatted or wiped clean.

Unfortunately, no recent version of either Microsoft Windows or Mac OS X offers a fast and convenient way to securely erase individual files or an entire hard drive. To securely erase your hard drive in Windows, Microsoft recommends using third-party software.

To securely erase selected files from a Windows computer, use Eraser, which is free. It can wipe out temporary files as well as those moved to the Recycle Bin, and can also erase an entire drive.

You should also consider setting personal passwords for any computer you use at home. In these modern times, when thieves break into homes, they are as likely to steal your laptop or component hard drive as they are to steal jewelry. Remember: Passwords should be as hard to guess as possible. They should have numbers, uppercase letters, and lowercase letters mixed together.

Posted by Jorgen Wouters at 04:12 PM | Permalink | Comments (0)

This is the eighth consumer fact sheet in the Consumer Reports WebWatch “Look Before You Click” campaign, supported by a grant from the New York State Attorney General’s office, to help educate New York consumers about Internet fraud.

Social networking Web sites such as MySpace and Facebook, where millions of minors post personal interests and contact information, are fertile hunting ground for child predators. Recently MySpace, the largest social networking site, owned by media giant News Corp., revealed that thousands of known predators were registered with the service. Several state attorneys general demanded names, citing many cases in which predators had exploited minors contacted through MySpace. The company turned over more than 7,000 names and closed those accounts.

Many of the leading social networking sites have taken steps to reduce this risk, but the danger still exists. In U.S. households surveyed by Consumer Reports, 13 percent of minors registered on MySpace were younger than the minimum age of 14, and 3 percent were under 10. And those were just the ones that parents knew about. Here are six tips for parents to help protect children from risky situations online.

Click below to read our tips and share your feedback.

1. Supervise and discuss. There is no substitute for parental involvement, though the effectiveness of discussion depends on your child’s age and maturity. Some experts say children most vulnerable to online predators share characteristics with troubled children offline: Loneliness, isolation, lack of supervision and parental involvement.

2. Keep the family computer in an open area, where Internet behavior can be observed.

3. Keep track of your child's screen names and accounts, using parental controls supplied by the Internet service provider. Avoid provocative or controversial names.

4. Monitor the child's online posts, and use software that blocks inappropriate sites.

5. If you are helping your child build a Web site, make sure you are aware of privacy provisions when registering a domain name (for instance, purchasing a domain name such as www.mydaughtercindyswebsite.com). Don’t make your home address and phone number accessible to the general public.

6. Discuss privacy with your children. Help them understand that photographs and video they make public online, will remain public and searchable for a long time.

For more information on privacy and protecting your children online, bookmark Consumer Reports WebWatch.

Posted by Jorgen Wouters at 12:02 PM | Permalink | Comments (0)

This is the seventh consumer fact sheet in the Consumer Reports WebWatch “Look Before You Click” campaign, supported by a grant from the New York State Attorney General’s office, to help educate New York consumers about Internet fraud.

Year after year, more people shop online. Whether you live somewhere rural or just don’t like going to the mall, online shopping satisfies our need for convenience in modern life. Shopping online is generally safe, and if you’re using the Web site of a famous retail chain with stores in the offline world, there’s really not much to worry about. However, you can encounter some risks along the way. Here are five tips to help keep you safe.

Click below to read our tips and share your feedback.

1. Use a credit card. They offer better protection than other options when shopping online. Even better, some issuers let you generate virtual account numbers valid for a single purchase with a fixed dollar limit. Use those and you won't have to give online retailers your permanent card number.

2. Don't assume a certified site is safe. Although it's vital to have a secure connection when sending personal information online (indicated by "https" before the Web address and the appearance of a padlock or other icon on your browser), it's no guarantee the Web site is reputable. Certification symbols from the Better Business Bureau, TRUSTe, and other organizations provide some reassurance, but they can be faked. There is no substitute for reading the fine print and researching a site by talking to friends and checking online reviews before turning over credit-card or other information. You can consult Consumer Reports WebWatch’s list of sites whose publishers have taken a pledge to abide by customer service and trustworthiness guidelines.

3. Use 'disposable' e-mail addresses if you don’t want to be spammed. The more online retailers you will visit, the more marketing e-mails you’ll receive, so consider using disposable addresses for different purposes. For example, use "smithshopping08" for buying online. If that address starts getting spam, abandon or change it. Many ISPs provide extra "associate" e-mail addresses that you can change at will. For convenience, configure your e-mail program to check all your addresses simultaneously. Or set up disposable accounts at a free e-mail service such as Google or Yahoo. A caution: Guard the primary e-mail address you got from your ISP, because you can't change that one without abandoning your entire account.

4. Type carefully. Tricksters sometimes create lookalike sites that use common mistypings of popular URLs.

5. Review your accounts regularly. Don’t throw away your credit-card and bank statements as soon as you receive them – make sure you review them. Report suspicious charges or withdrawals immediately.

For more information, and to keep up to date on ways to shop online safely, bookmark Consumer Reports WebWatch.

Posted by Jorgen Wouters at 11:54 AM | Permalink | Comments (2)

This is the sixth consumer fact sheet in the Consumer Reports WebWatch “Look Before You Click” campaign, supported by a grant from the New York State Attorney General’s office, to help educate New York consumers about Internet fraud. This is also the third information sheet in our series on auction fraud. Now that you’ve completed an auction, we’ll focus on what happens after you’ve successfully bid on an item and won.

Click below to read our tips and share your feedback.

Before you pay any money:
• Contact the seller with any special concerns you have, i.e., verifying authenticity of a valuable piece of art, jewelry, stamp, coin, or collector’s memorabilia.

• Consider using an escrow service if your auction prize is pricey. One solid option is www.escrow.com.

• Consider the terms of the auction one more time for anything you may have missed, such as a disclaimer that the seller accepts only cash, checks or Western Union. That could be a warning sign that the transaction may not turn out the way you want it. If you want to back out of the auction, it may be easier now than at any time later. Check each individual auction site’s policies on bid retraction.

• Consider an online payment service such as PayPal. They have their pluses and minuses, but most were created with auctions in mind and provide some provisions for fraud protection. Consider setting up a credit card account you plan to use solely for auctions. Some banks offer credit cards designed for Internet use. Compare and contrast at www.bankrate.com

• Check the seller’s shipping policy or proposed charges stated on the auction page. Make a note of them. You may want to make sure they match up with what you are actually charged.

When you pay:
• Don’t use a debit card. Most debit cards offer less fraud protection than credit cards.

• Be wary of any strange behavior on the seller’s part, such as sending a personal e-mail asking that the transaction be fulfilled in cash, or offering a discount if you pay in cash.

• Take note of any e-mail contact from strangers that makes a reference to your purchase and offers, for instance, to beat the price if you deal with them directly.

After you pay:
• Examine the merchandise carefully and make sure it’s what you paid for. Look for factory seals if buying a new item. Return any merchandise with broken seals.

• Leave accurate feedback. This is important guidance for other buyers. If leaving negative feedback, be brief and factual; avoid personal insults or inflammatory language. Some sellers have attempted to sue buyers whose feedback exceeded factual accounts of transactions.

Posted by Jorgen Wouters at 10:52 AM | Permalink | Comments (0)

Next month, we'll be distributing this, our fifth consumer fact sheet in our "Look Before You Click" initiative, supported by a grant from the New York State Attorney General's office.

Now that you’ve read our tips to consider before you bid in an online auction, we’ll talk about the basic types of auction fraud, the number one Internet complaint among New York state consumers. Though online auctions can be a good source of bargains, and a great venue for unusual goods and specialized items for collectors, they also provide a number of opportunities for con artists.

Click below to read our tips and share your feedback.

The basic types of auction fraud are:

· Misrepresentation of merchandise. You win an auction for a hockey stick autographed by all 22 players on the 1998 New York Rangers. You pay the seller, the stick arrives, but Mark Messier’s signature is missing. (The situation can, of course, get far worse. We’ll talk about that later.)

· Failure to ship merchandise. You pay the seller but the stick never arrives, and the seller ignores your attempts to make contact, or claims the stick must have got lost in the mail.

· Failure of merchandise to actually exist. You participate in an auction for five brand new laptops from a seller in Romania. You pay the seller and things progress from there as in the item above. Chances are those laptops didn’t exist in the first place. Hopefully, if you’ve read our fact sheet number five, you’ll know enough not to let this happen to you.

· Shipping substandard or counterfeit merchandise. You’re the high bidder in a $150 auction for a Gucci bag. You pay the seller but when the bag arrives, it’s a genuine knockoff, made of synthetic leather. Perhaps it’s monogrammed “Gewchi of Lagos, Nigeria” for good measure. And, of course, the seller ignores your e-mails.

· Bid rigging. The seller collaborates with others (called shills) who participate in the auction solely to drive up the price of the item up for bid. The scam is also called shill bidding.

· Soliciting. During the course of the auction, the seller (or someone else) writes to you and says they have more of the item you’re looking for but at a cheaper price if you bypass the auction and communicate directly. A variation: You lose the auction, but afterwards, the seller (or someone else) writes to you to tell you he’s got more of the item you want, but you can get it for a set price by dealing direct.

· Invoking mysterious fine print. You buy a rare stamp, pay the seller, and when you receive it, you discover it’s a worthless forgery (actually, in stamp collecting, some forgeries are worth more than the real stamps, but we’ll leave that topic for another time). When you complain, the seller points out the auction page, where at the bottom is written, “Seller makes no guarantee of object’s authenticity. Sold as-is. No refunds. Consider before bidding.” There is some debate over whether this is actually fraud, but a number of sellers use elusive language to make legally shaky disclaimers.

Taking some basic precautions, as we outlined in tip sheet number three, should help you avoid some of these kinds of pitfalls. For more on what to do after the auction, see our fact sheet number six.

Posted by Jorgen Wouters at 12:41 PM | Permalink | Comments (3)

Next month we'll be distributing this, our fourth consumer fact sheet in our "Look Before You Click" initiative that's supported by grants from the New York State Attorney General's office. It's about work-at-home scams, and provides tips for consumers to avoid getting taken in these tough economic times.

Click below to read our tips and share your feedback.

If you’ve ever been tempted by an offer in your e-mail box to work from home and make hundreds, even thousands of dollars a day, first remind yourself of that old saying, “if something sounds too good to be true, it is.” Then be aware that according to some sources, work-at-home scams make more than $400 billion a year – for criminals.

Sure, it’s easy to be tempted, when gas prices are high, the economy is sluggish at best, and ever-crowded roads make commuting a daily hardship. But know that criminals are counting on the combined appeal of convenience (who wouldn’t like to spend more time at home with the family?) and the lure of big money (most come-ons feature pictures of big houses, nice cars, tropical landscapes and pools).

As with many other cons, the Internet has made it easy for more and more criminals to reach more and more people. So, to make it perfectly clear: Ignore and delete any unsolicited e-mail you get promising or offering you work from home. Legitimate employers don’t work this way.

You also may get solicited online in other ways besides direct e-mail – pop-up ads, for instance, or paid search results. Often, work-at-home scams ask you to send money to buy a book, software, computer equipment, a listing of Web sites that will pay you to take surveys, supplies for making crafts to sell, and other offers. What you get in return for your money most often doesn’t measure up:

• Books prove to be poorly produced or even photocopied, with information easily obtainable from free sources such as libraries or discount and used book stores.

• Software of poor quality that, in some cases, may contain programs harmful to your computer (badware).

• Lists of Web sites that are no longer functional, or that turn out to be lists of other Web sites.

• Poor-quality supplies that the so-called “buyer” will reject for a variety of reasons.

Victims of these types of scams have reported losing as much as $70,000. Once the scammers “hook” you, they may try all kinds of tactics to get more money from you.

You Might Get in Trouble!
Some work-at-home “opportunities” encourage you to engage in illegal activity. Often these involve forwarding stolen merchandise to others, or depositing bogus checks in your bank account. People have been arrested for engaging in these activities, even though the scammers made an effort to make the activity sound harmless or common.

Other schemes seek to encourage you to recruit other people to give each other amounts of money (“gifting”). No matter what you are told, “gifting” is not legal, unique or even new – examples in the U.S. date back to 19th Century New England. “Gifting” is a variation on the pyramid scheme, illegal in the United States and several other countries. What distinguishes pyramid schemes from other forms of community marketing – and makes them illegal – is that no product is involved. If someone tries to involve you in a multi-level marketing scheme in which there’s no tangible product being sold, don’t get involved.

Job-Seeking Makes You Vulnerable
Criminals know that job seekers are often vulnerable, and for that reason, even some classified print advertisements in newspapers and other venues can turn out to be fraudulent. In general, you should be concerned if:

• The job offered focuses on selling and recruiting but doesn’t involve an actual product of value.

• The job interview process requires some sort of advance fee. Real employers don’t charge advance fees.

• Real employers generally require experience and clearly spell out the terms of employment – they don’t blindly recruit people with spam e-mails.

• Real employers have real-world attributes you can check – reputation, business records such as operating licenses; other employees you can talk to.

Many legitimate employers these days recognize the need for flexible schedules and telecommuting opportunities for employees. If you want to work at home, your best opportunity may be the mainstream job market. Keep records of your job search, and report criminals by contacting your state’s consumer affairs agency or attorney general’s office.

If you believe you received fraudulent products through the mail, or you have been asked to participate in a scheme to re-package and re-mail products, contact the U.S. Postal Inspection Service. For more information on pyramid schemes and multi-level marketing, go to the U.S. Federal Trade Commission. For more advice on how to avoid these scams, and what to do if you've been victimized, visit the Better Business Bureau.

Posted by Jorgen Wouters at 02:29 PM | Permalink | Comments (2)

You've probably heard about this. What steps does your favorite retailer take to protect your credit card information?

How about your favorite online retailer? On the sites where you shop, do you keep a credit card or two "on file," to make the checkout procedure easier? If you do, make sure it's not your primary credit card or, heaven forbid, a debit card to your checking account.

Count me among the recently hacked, by the way.

I don't shop at T.J. Maxx (though my mother used to shop at the English version, which is T.K. instead of T.J), but someone cloned my credit card and used it to buy stuff at a Duane Reade in New York City a couple of weeks ago.

The credit card security department was alerted when the thief tried to make two charges at the same store, one right after the other. I've been red-flagged and declined myself when trying to do that at a grocery store (forgot the milk and eggs).

Posted by Beau Brendler at 11:30 AM | Permalink | Comments (0)

Our e-mailbox continues to overflow with questions about work-at-home sites, and here’s another we’d like to share. Recently, a reader wrote asking us if the site Consumer Rated Home Based Businesses is associated with Consumer Reports, and whether it’s legitimate.

As we told him, “Consumer Rated Home Based Businesses” is not affiliated in any way with Consumer Reports. In fact, our legal department has contacted them several times, since Consumers Union, the non-profit publisher of Consumer Reports magazine and ConsumerReports.org, owns the trademark, “Consumer Reports Online,” which they display at the bottom of their homepage.

Although the site does carry a disclaimer midway down the homepage in the left-hand column (“We are not affiliated with Consumer Reports a consumers union company”), it’s indistinct and not anywhere near their misappropriated Consumer Reports trademark. And as the e-mail from our reader demonstrates, it fails to serve its purpose.

Apart from trying to fool unsuspecting consumers, there are all sorts of clues—some obvious, some less so—that should help you recognize this site for what it is: yet another questionable work-at-home site.

As we’ve pointed out before, the first thing that should set alarm bells ringing is the look and feel of the site. Like so many other shady sites, this one features stretched and blurry images, a kaleidoscope of incongruous fonts, and badly misaligned graphics—a real "Web site from a box" feel.

Secondly, we couldn’t help notice that in addition to borrowing the Consumer Reports name, they’ve also copied WebWatch’s guidelines for credible sites, which they pasted into the right-hand column underneath this headline: “Five Things Websites you do business with should have!”

Problem is, this site violates our first guideline (although they list it second), i.e., the need to disclose a physical address. The only contact information they offer is an e-mail address.

Thirdly, the site bills itself as “Your Trusted Source for Online Ratings,” and states its mission thusly: “We Research & Rate Online Internet Home Business Companies to help Protect the consumer! We want to Help Consumers to protect themselves from online scams.”

We decided to see just what kind of sites “Consumer Rated Home Based Businesses” rates and recommends by exploring the navigation bar at the top of the homepage, which offers several categories, including: Data Entry Jobs, Internet Home Business, Typing Jobs, Work from Home, Free Paid Surveys.

Each of these pages, (expect for the Free Paid Survey page, which displays nothing but flashing banner ads—another red flag) displays the following ratings key: Consumer Ratings Scale: Scores of 100% - 97.5% are highly recommended. Scores of 97.5% - 95% are recommended. Scores of 94.9% - 92% are average. Scores of 91.9% - below are not recommended. Consumer Reports Online (CRO) Ratings Scale: Each site that satisfies the following categories earns a gold star: Quality of Program, Support of Program, Return Policy, Privacy Policy/Contact Information and Value of Program.

With such a lofty bar (anything scoring below 92% fails), combined with quasi-WebWatch attributes, one might assume sites featured on these pages must be top-notch, right? Wrong. Although every recommended work-at-home site on each page gets a “CRO 5 Star Rating” and almost all boasted scores of 100% (two sites scored only 98.9%), the sites themselves hardly inspire confidence, and all look suspiciously similar.

In fact, one of the top rated data-entry sites is Laura Kauth’s Online-Data-Entry Jobs, a site we recently warned readers to avoid. While it’s unclear how these ratings are assigned, we can guarantee you Online-Data-Entry Jobs doesn’t deserve a gold star for contact information, since there is none beyond an e-mail address.

We could also go on about the fact this site inexplicably includes ratings of music and movie download sites; that the link to the “Overview page” is non-existent; that there’s no explanation of the ratings methodology; and the fact the site uses a .org domain. But by now, you should get the point. If you come across this “Consumer Reports Online” while surfing the Web, take their own advice about “Five Things Websites you do business with should have!” and keep scrolling.

Posted by Jorgen Wouters at 02:50 PM | Permalink | Comments (0)