According to Howard Beales, Director of the FTC's Bureau of Consumer Protection, in an FTC press release, "Today's Internet is not a lawless environment; in fact, the NetForce partnership demonstrates the importance of enforcement on the Internet beat. We have the biggest impact on deceptive spammers and online scammers when law enforcement agencies band together to root out and prosecute fraud."
One of the scams allegedly involved the installation of a modem dialer on the victims’ computers without their consent or approval. This dialer would disconnect the user from their Internet service, and reconnect to a videotext service which charged the victims $4.99 per minute for access.
Another alleged scam targeted by the FTC was “The College Advantage, Inc.”, also known as “The College Funding Center”, and “C Funding Group, LLC”. In this case, filed in the United States District Court, Eastern District of Texas, Sherman Division, (www.ftc.gov/os/2003/05/collegeadvantagecmp.pdf). It is alleged that this Katy and Plano based scam was directed at those seeking financial assistance for college. For a fee of $895, the group claimed to obtain 100% of the money students needed to attend college. In some cases, high school students and their parents were invited to attend seminars held in or near their schools. The solicitations and seminars were posted on their websites at www.cfcservice.com and www.collegefundinggroup.com. According to the FTC complaint, this company did not get any money for the students, despite their online guarantee that they will locate and secure 100% of college expenses, but instead provided the students with a list of scholarship sources that were available elsewhere for free. (Source: www.ftc.gov/opa/2003/05/swnetforce.htm)
In another Texas case, the FTC filed a suit against Jeffrey Stone Evans, a.k.a. Stone Evans and Mark Wise, of Dallas, for allegedly using spam mail to promote a fraudulent “get rich quick” scheme using chain letters. Evans allegedly emailed spam asking recipients to send a $5 bill to names on a list, asking the recipient to add his name to the bottom of the list, and then forwarding the chain letter to others. Evans claimed that this was legal because the participants were actually ordering reports on how to send bulk email (spam), and advertise for free on the net. In his claim, Evans allegedly stated that participants would make a half-million dollars every four to five months, and “Be an internet millionaire like others within a year !!!” As claimed by other chain letters, Evans allegedly stated that this was legal, that there were no laws restricting this activity, and that it had been discussed on network TV shows. The spam also urged recipients to contact the FTC's Associate Director for Marketing Practices, who he claimed would vouch for the legality of the scheme. The FTC claims that this was indeed an illegal scam. A copy of the FTC complaint can be found at www.ftc.gov/os/2003/05/jeffreystonecmp.pdf.
In a similar Texas case, the FTC filed a complaint against Joel Kent Benson, a.k.a. Kent Benson, of Cleburn, alleging a spam mail chain letter scam almost identical to the Evans case. A copy of the FTC court filing is online at www.ftc.gov/os/2003/05/joelkentcmp.pdf.
Another Internet scam attacked was a “guaranteed, 100% unsecured VISA or MasterCard” with a credit limit of up to $5000 for a one-time fee of $49.95. After clicking on a "Claim your card NOW," icon, and using an online service that deducted the fee from the victims’ checking account, a confirmation stating "Approved! Congratulations! Your membership has been approved" was generated on the web or sent via email. Instead of a credit card, victims received a list of Internet hyperlinks to credit card companies. The same list could have been generated for free using almost any search engine.
Another scam was spammers and websites offering a "100% Legal and Legitimate" work-at-home envelope stuffing. The alleged perpetrators claimed to be affiliated with well-known companies who paid $1 for each envelope stuffed, up to $1500 a week. For their $50 fee, the victims received instructions on marketing what the FTC refers to as “a deceptive credit-repair manual.”
Another alleged scam touted "Instant Internet Empires," promising that buyers could make $115,000 a year, even while they sleep. For a fee of $47.77 the victims received the right to copy an advertising website and then to resell the site to others. The FTC calculated that in order to make that much money each victim would have to sell the website to 2400 others; each of those 2400 would have to sell to another 2400, and repeat the process until a total of 13,829,760,000 sales were made. Other Texas based internet scams allegedly offered investments in oil and gas, the posting of false press releases inflating the value of investments, dating service scams, herbal tea products that claimed to cure cancer and attention deficit disorder, the sale of discounted cigarettes, improper sales of prescription drugs, automobile accessories, credit repair, and medical devices
Caveat Emptor.
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