Top Five Online Scams Reviewed by LegalZoom

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Every day internet users are getting better at spotting online scams. Most of us know not to send money to the representative of the Minister of Agriculture for Nodambizia, which has plagued e-mail boxes as the "Nigerian 419 letter." But, what if you received an e-mail from AOL requesting updates to your account information? Or, what if you bid on a new product only to have your money taken and the auctioneer never to be heard from again?

Thousands of con artists are hunting for victims online. Can you recognize online fraud when you see it? Check out the five scams below that are currently circulating the Internet and see if you've come across one in your Web surfing experience:

1. Phishing Scams

Phishing scammers will send you an e-mail from a company you've probably used in the past, such as eBay, AOL, PayPal or Earthlink. The e-mail address will even look legitimate - such as accounts@ebay.com. The e-mail will warn you of possible identity theft to your account to lure you to a legitimate-looking Web site where you'll be asked to enter personal information. The e-mail sometimes threatens that if you don't update your information, your account will be terminated. If you go as far as to click the link to the fake Web site, you are asked for such information as your name, address, phone number, date of birth, Social Security Number and bank or credit card number. By supplying this information, the phisher can use your credit card, or worse, use your social security number and start opening other credit card accounts.

Beware of e-mail headers, which can be forged easily, and avoid filling out forms in e-mail messages. Reputable companies do not contact their customers through e-mail to update their files or to verify their account.

2. Auction Fraud

Internet auctions have become the shopping wave of the future, but with every wave comes some rocky waters. Online auction fraud accounts for three-quarters of all complaints registered with the FBI's Internet Crime Complaint Center. What happens with auction fraud is the bidder places a bid for an online bargain, sends the money, and either never gets the product promised, or the product received does not match the product that was purchased. For example, one scammer recently accepted bids for Louis Vuitton bags that she never owned, and then searched the Internet looking for cheap knockoffs that cost less than the winning bid. The scam artist collected about $18,000 from bidders before she was caught.

The only protection from auction fraud is to be smart - would someone really sell an authentic Louis Vuitton bag worth $200 for $20?

3. Congratulations! You've won something free!

Some e-mail messages offer valuable items for free, such as an Xbox, IPod or computer. All you need to do is visit a Web site and provide your debit or credit card to cover "shipping and handling" costs. Or, you may be asked to pay a fee to join a club, and then to earn the offered goods, invite a certain number of participants to also join.

What usually happens is the item never arrives, but unknown charges begin to show up on your bank account. The only thing you get is the hassle of disputing charges on your account for the money lost. The point is nothing in life is free, so why would an Xbox be any different?

4. Postal Forwarding/Reshipping Scam

Remember the "work-at-home" envelope-stuffing scam that promised steady income for minimal labor, and a minimal fee to get started? Well, the loss from that scam is small compared to this clever postal forwarding/reshipping scam. This scam lures job seekers with an online ad looking for a "correspondence manager" promising big bucks for little or no work. An offshore corporation without a U.S. address or bank account needs someone to have goods sent to their address and reship them overseas. You may also be asked to accept wire transfers into your bank account, and then transfer the money to your new boss's account. Your reward is a percentage of the goods or amount transferred.

What you are never told is that the products are purchased online using stolen credit cards and shipped to your address. You then reship them to the scammers who, in turn, fence them overseas. So, in reality, you are transferring stolen funds from one account to another. This dangerous situation usually ends with your bank account being cleaned out, or worse, a warrant for your arrest.

5. Guaranteed loans or credit on easy terms

Some e-mail messages offer home-equity loans that don't require equity in your home. Other solicitations promise guaranteed, unsecured credit cards, regardless of your credit history. Usually, these are said to be offered by offshore banks. And to make the bait sweeter, they are sometimes combined with pyramid schemes that offer you an opportunity to make money by attracting new participants to the scheme.

This home equity loan scam turns out to be a useless list of lenders who will turn you down if you don't meet their qualifications. The promised credit cards never come through, and the pyramid money-making schemes always collapse.

Scams Are All Around Us

There are many scams floating around the Internet and into your e-mail inbox - medical miracles, cable descrambler kits, high profit investment plans, low price vacations, you name it. The important thing when surfing the Internet is to be smart - if an e-mail or advertisement claims to be too good to be true, it probably is. To report an Internet scam, contact the FBI's InternetFraudComplaint Center at www.ifccfbi.gov