Investment Fraud

Investment fraud - 10 Ways to Reduce Chargebacks & Fraud

2006-03-30T22:15:00.000-08:00

Investment fraud - 10 Ways to Reduce Chargebacks & Fraud

Merchant concern about online credit card fraud and
chargebacks is rising at a significant rate. According to the
2001 Online Fraud Report, conducted by Mindwave Research, it
revealed that, "41% of merchants say the issue of online
credit card fraud is 'very serious' to their business." As e-
commerce continues to flourish the number of instances of
credit card fraud and chargebacks will continue to mount
higher. It should go without saying that the need to take
certain measures to reduce and virtually eliminate
chargebacks and fraud is certainly paramount.

Here are some ways you can greatly reduce the instances of
chargebacks and fraud, even potentially eliminate the risk
altogether:

#10 Interactive Voice Response (IVR) Terminals

IVR Terminals, developed by VoiceStamps
http://www.voicestamps.com, are a relatively new solution
that greatly reduces chargebacks and fraud by collecting a
"voice stamp" or voice authorization and verification from the
customer before the merchant ships the order. The voice
recorded order verification is then automatically e-mailed to
the merchant for filing in the event the customer tries to
dispute the charge on their account.

#9 Collect CVC2 and CVV2 Verification Numbers

This tactic alone can not only reduce instances of chargebacks
by 26%, according to Visa, but also reduce any pass-through
fees that may be charged when a credit card order is
conducted. On the back of MasterCard, most Visa and
Discover credit cards is a 3-digit security code located right
after your credit card number. Requiring customers to give the
3-digit code acts as an additional verification measure.

American Express cards also have a similar security code that
is located on the front of the card right above the cardholder's
account number and is usually 4-digits long. Most online
payment processors support entering the security codes when
processing credit card orders. Check with your payment
gateway provider (i.e. Verisign, Authorize.Net, ECHO Inc., etc)
for details.

#8 Use Address Verification System (AVS)

AVS checks to ensure the address entered on the order form
matches the address to where the cardholder's billing
statements are mailed to. People ordering products and/or
services using a stolen card number will never use the real
cardholder's billing address, so this is your chance to stop the
order before it's too late. AVS only works with orders
conducted in the US. Failure to use AVS when processing
credit card transactions will always result in paying higher
credit card processing fees.

#7 Scrutinize orders from developing foreign countries

A large percentage of fraudulent Internet purchases are made
from Indonesia, Russia, and other eastern block or developing
countries. Accept orders from such countries at your own risk
until a worldwide AVS system is developed.

#6 Let customers know what name will appear on statements

Many merchants who use 3rd Party Processing companies have
run into problems because the company name that appears on
cardholder's monthly statements is usually the name of the
3rd party processing company and not the company name of
the site the cardholder made their purchase from. This isn't
always the case, but in many cases it is. If you use a 3rd
party processor, and even if you don't, make sure the
customer knows what name will appear on their credit card
statement at the end of the month. This will help to reduce
any confusion that might would otherwise occur.

#5 Handle suspicious orders accordingly

If an order seems suspicious the best way to handle the
situation is to either call or e-mail the customer and attempt
to verify that they placed the order. As a rule of thumb, if in
doubt, check things out. It may be a good idea that if a
customer makes an unusually large volume purchase from your
site to follow-up with a verification call. This is where a
system like IVR terminals, previously mentioned above, can
come in very handy.

#4 Watch out for orders using free e-mail addresses

Be wary of accepting orders from people who used a free e-
mail address when ordering (i.e. Hotmail, Yahoo, etc.).
Tracking people who used a free e-mail address is almost
impossible, it's much easier for them to get away then if they
used their Internet Service Provider (ISP) or their own
company web site e-mail address. To check whether an e-
mail address is a freebie or not just take the part of the
address after the "@" symbol, add "www" to the front of it and
see what website it brings up (i.e. joe@yahoo.com =
www.yahoo.com

#3 Signatures on delivery

If your business delivers products use a carrier that requires a
signature on delivery, and allows you to have a copy of the
signature. Retain these for your records.

#2 Request fax copies of ID and credit card

You may want to request your customer to fax a copy of both
sides of their credit card and driver's license. This tactic
usually works best in a B-to-B (business to business) sales
environment. While this is not a defense under Visa or
MasterCard rules, it is yet another way to deter fraud.

#1 Posting a warning message

Taking the time to post a warning message on your order
page to those who may attempt to make a fraudulent order
will greatly deter the number of instances of fraud. Be sure to
mention that IP (Internet Protocol) addresses are being
logged. IP addresses can come in handy when locating people
about fraudulent orders.

Taking measures to deter and eliminate fraud and chargebacks
from occurring are a necessity in order to operate a successful
online business. Each day companies dedicated to risk
management are developing solutions to provide merchants,
like yourself, with extra protection because of the financial
burdens chargebacks and fraud can bestow if ignored.

by Jim Conley II at articlesfactory.com

How to Spot a Scam a Mile Off

2006-03-27T02:32:00.000-08:00

How to Spot a Scam a Mile Off

Received the following forwarded email from a subscriber
this morning:

"I am an Executive Director with the Nigerian National
Petroleum Corporation (NNPC) and a member of the
Contract Advisory Committee (CAC). I am seeking your
assistance to enable me transfer the sum of
$26,500,000 (Twenty Six Million, Five hundred Thousand
United States Dollars) into your private/company
account."

Carole told me she has received "3 or 4 of these in the last
week, I think from different people. I deleted the others. It makes
me nervous. Sounds like a dangerous scam. "

That's exactly what it is, of course. Maybe you're reading this
thinking "I can't believe people are still falling for the Nigeria
scam after all this time". On the other hand, maybe you're
reading this thinking, "Wow, I might have responded to that. How
am I supposed to know what's a scam and what's real?

The reality is that there are hundreds of thousands of people
coming online, for the first time, each year. Many of these
people have simply not been exposed to scams like the ones
that are constantly touted on the Internet before. Many of these
people come online to try and find a way to make money with their
computers and/or they're looking for ideas for making money
from home.

The fact that they may not recognize scams off the bat doesn't
mean they're naive or stupid, it just means that they haven't been
in an environment where this sort of stuff came their way before
now. And don't the scammers know it.

Like vultures circling overhead, they await their prey. They know
they have only a narrow window of opportunity because it doesn't
take newbies long to catch on so they have to be quick about it. And
how do they do that? They hang out where newbies hang out so
they can get them while they're still young and fresh and vulnerable.
They're nothing but predators looking to pick off the easiest game.
Wouldn't want to have to engage in any real work, after all.
In this article we look at several main scams and how to recognize
them.

=> Nigerian Advance Fee Scheme

The gist of this worldwide scheme is that small to medium-size
businesses receive a letter from someone who purports to be
an official of the Nigerian government or major utility or similar
who needs to transfer some huge amount of money out of the
country. The money typically is an overpayment by the government
on a procurement contract. The object of the exercise is to get
you to provide your bank account details (for the purpose of
wire transferring the money of course). Surprise surprise, there's
a transfer all right but not INTO your account!

=> The FTC "Dirty Dozen"

These are the top 12 scams that have been identified by the
(U.S.) Federal Trade Commission as the most likely to arrive
via email:

1. Business Opportunities - often pyramid schemes (see below)
thinly disguised as legitimate opportunities to earn money.
What to look for: high returns with little or no effort or cash outlay
required.

2. Bulk Email - offers of lists of thousands of email addresses
all of whom, of course, are just dying to receive your marketing
message.
What to look for: "Bulk Email Works! 10,000 addresses for $9.99."

3. Chain Letters - send $5 to the next name on the list then
cross the bottom name off the list, replace it with your own, then
forward the letter to 500 of your nearest and dearest.
What to look for: A jail cell. This is a pyramid scheme and is
illegal. The letter goes to great pains to say that it is not illegal.

4. Envelope Stuffing - think you're going to be paid for stuffing
envelopes? Think again. You get a kit that you can turn around
to recruit others to an envelope stuffing scam of your very own!
Watch out for craft assembly work as well. You'll probably find
all of your hard work is not up to their exacting "quality standards"
and therefore you won't get paid for your work.

5. Health and Diet Scams - magic pills that eradicate the need
to eat fewer calories than you expend in order to lose weight.
They don't work.

6. Effortless Income - no such thing. As the FTC says, if they
worked, everyone would be doing it.

7. Free Goods - you're told you'll get a free computer. You have
to pay a fee to join a club and then told you have to recruit other
members. You get paid in computers. They're nothing but pyramid
schemes.

8. Investment Opportunities - look for outrageously high rates
of return with no risk.

9. Cable Descrambler Kits - they probably won't work and even
if they do, you're stealing a service from a cable company and
committing a crime.

10. Guaranteed Loans or Credit - pay a fee and you're
given a list of lenders, all of whom turn you down. Credit cards
never arrive.

11. Credit Repair - no matter how bad your credit, pay these
people and they'll fix it. They generally just advise you how to lie
on future credit applications - how to commit fraud in other words.

12. Vacation Prize Promotions - your accommodations will be so
bad you'll want to pay for an upgrade. You'll probably have to pay
to schedule a vacation at the time you want as well.

=> Pyramid Schemes

Make money by recruiting members into the program without giving
anything of equal value in exchange for membership fees. Contrast
MLM (multi-level marketing schemes). These are not pyramid
schemes because they involve the sale of products and services
in return for membership.

=> Medical Billing

Prepackaged businesses requiring an investment of $2,000 to
$8,000. Few people who purchase one of these "businesses"
are able to find clients, start a business and generate revenues.
Competition in this area is fierce and concentrated around a
few big, well-entrenched firms.

=> Your In Box

Finally, go to your in-box now. You'll find no end of scams sitting
right there. Here's one that just arrived in mine ...

"Subject: How to make $1,000,000 in 20 weeks selling to
Newcomers on the Net"

Like all the rest, it gets the one-finger salute - index finger
to the delete key. Works beautifully every time.

Where to go for more information on internet scams:

FTC Website
http://www.ftc.gov/ftc/consumer.htm

Scambusters
http://www.scambusters.org

Netscams
http://www.netscams.com/frameset.html

by Elena Fawkner at articlesfactory.com

Tips to avoid Invesment Fraud

2006-03-20T22:15:00.000-08:00

Tips to avoid Invesment Fraud

Download and print a hard copy of any on-line solicitation that you are considering. Make sure you catch the Internet address (URL) and note the date and time that you saw the offer. Save this in case you need it later.

Don't assume that people on-line are who they claim they are. The investment that sounds so good may be a figment of their imagination, or they may be paid to promote it.

Ask the on-line promoter whether – and how much – they've been paid to tout the opportunity.

Ask the on-line promoter where the company is incorporated. Call that state's secretary of state and ask if the company is incorporated with them and has a current annual report on file. Also, check the SEC's EDGAR database.

Don't believe everything you read on-line. Take the time to investigate a possible investment opportunity before you hand over your hard-earned money.

Check with your state securities regulator or the SEC and ask if they have received any complaints about the company, its managers, or the promoter.

Ask for other sources of information at your local public library. For example, there are resources that provide information about the company, such as a payment analysis, credit report, lawsuits, liens, or judgments.

Before you invest, always obtain written financial information, such as a prospectus, annual report, offering circular, and financial statements. Compare the written information to what you've read on-line and watch out if you're told that no information is available.

Don't assume that your access provider or on-line service has approved or even screened the investment. Anyone can set up a web site or advertise on-line, often without any check of its legitimacy or truthfulness.

Check with a trusted financial advisor, your broker, or attorney about any investment you learn about on-line.

source: http://www.sec.gov/investor/pubs/cyberfraud/investigate.htm

Invesment fraud - Avoid Home Business Scams

2006-03-20T21:45:00.000-08:00

Invesment fraud - Avoid Home Business Scams
The email inboxes of net-savvy parents are often flooded with
home business scams.

We're prime targets. We know our way around a computer
keyboard, and we love to spend time with our kids, so we're
marked for every home-business opportunity in the book.

And it's true: a lot of us would love nothing more than
to make money and stay at home. That's why even though we
know we can smell a rat a mile away, we're sometimes
tempted...even by those less-than-reputable (and
less-than-ethical) companies that rely on SPAM to
get the word out.

Here are a few tips to avoiding the scams and finding
the right home-based business opportunity for you.

IF IT SOUNDS TOO GOOD TO BE TRUE...
It probably is. If you find an opportunity for which you
can make a lot of money without spending any time working,
move on to the next opportunity.

VAGUE HEADLINES
"Tammy made $4,000 in her first month. So can you."
First of all, who is Tammy? Testimonials that are difficult
to verify may not be legitimate. If the ad only gives
first names and photographs of people holding scads of
cash, be careful. If Tammy is a legitimate home-working
entrepreneur, it's possible that she made that $4,000 in
her first month...and significantly less after that time period.

Also be wary of companies that offer to sell you lists of
companies that are looking for homeworkers. A friend of
mine once shelled out $95 for such a list, which turned
out to be a listing straight from her yellow pages. When
she contacted these businesses, she discovered that they
were neither looking for home-workers nor did they agree
to be listed in such a book.

THE OVERHYPED
Be leery if there is a strict time limit for investing
in a business opportunity. Scammers know that the faster
you act, the less you think (and research). And if this
is a fly-by-night company, these time limits provide a
better opportunity to take the money and run.

Also, don't get too excited about deep discounts on starting
costs. More costs may come later. And keep in mind that, in
many states, the government does not regulate business
opportunities with investments of less than $500. Some of
the worst scams may fall into this category.

RESEARCH
Use your knowledge of the internet to avoid being scammed.
Check for listings with the National Fraud Information
Center (http://www.fraud.org/) as well as the Better
Business Bureau (http://www.bbb.org)

You can also conduct a search for the business opportunities
on Google Groups (http://www.groups.google.com) Here
you'll find an archive of newsgroup postings. If someone has
been scammed, chances are they'll want to warn others.

IF YOU DECIDE TO SIGN...
Get everything in writing, including business expenses--
from fees to equipment to supplies. Will the company refund
any of your initial investment if you change your mind?
Keep detailed records.

Some online opportunities are lucrative and legitimate,
and--armed with a few online resources--it's never been
easier to sort the good from the bad.

When it comes to working from home, "when there's a will,
there's a way." Now it's up to you to find the way that
best suits you and your lifestyle.

source: Susie Michelle Cortright at articlesfactory.com