Landmark issue invites a look-back over 18 years of scam reporting: Internet Scambusters #500
The soaring scale and cost of Internet crime is hardly a cause for celebration but we can't let our 500th issue pass without at least commemorating an anti-scam campaign that began way back (in Internet terms!) in 1994.
It turns out that many of the scams we identified in those early days are still around. Most are much bigger, while a couple of others have faded -- as we explain below. We'll look at the big picture to see the scam trends.
And now for the main feature...
500 Scam Busting Issues and Counting!
Though we didn't set out to break any records, Scambusters today reaches a remarkable milestone in our unceasing campaign to help beat the scam artists.
This is our 500th issue -- a landmark for what has turned out to be possibly the world's longest-running, continuously "published" consumer newsletter about the online fraud and offline con tricks we know as "scams."
Our story goes back almost 18 years, when entrepreneurs Audri and Jim Lanford co-founded Scambusters.
In those days, the Internet was barely a twinkle in most people's eyes but Audri and Jim had spotted what was about to happen.
"Few businesses were on the Internet back then," Audri recalls. "But, in one week, three colleagues asked our opinions on bids they had gotten to put their businesses on the Net.
"Those bids were insane -- and basically just to put up brochures online. One bid was for double the annual revenue of that company!
"We were also seeing more consumer scams and we knew it was going to get a lot worse.
"We decided we could either do nothing or we could create a public service to help individuals and small businesses protect themselves from Internet scams -- basically our way of contributing to society, our way of giving back. We obviously chose the latter.
"We're proud that our newsletter and website have helped millions of people protect themselves from Internet scams around the world."
What Has Changed?
What is remarkable, looking back over the previous 499 issues, is how little has changed in terms of the main scam categories, while the scale and cost of Internet crime has gone through the roof.
For example, our first ever issue was devoted to domain name scams, which we still encounter today -- although back in '94 the main subject was a registration fee rip-off, with charges of up to $1,000.
These days, the most common domain name scam involves bogus websites with slightly different names to the legitimate sites they duplicate. Victims who mistype the address end up on the phony site where their login details are usually stolen.
(For more on recent domain name scams, see Missing Dot Leads to Domain Name Scams.
In those early days, email spam was also starting to show up in inboxes, along with those intriguing messages from supposed Nigerian civil servants who wanted our help to smuggle millions of dollars out of their country, in return for a cut of their haul.
All you had to do was pay some money upfront to get the cash out of the country. And so what we know today as the advance fee, Nigerian or 419 scam moved online.
(For an explanation of that "419" label, see 8 Cunning New Nigerian Scams Aim to Convince You They're Real.
The big difference about 15 years ago, when those scams really took off, was not just in how easily people were fooled compared with today, but also that the advance payments were usually demanded in the form of money orders or checks.
Today, the crooks' payment system of choice is "electronic cash" using legitimate but untraceable services from the likes of Western Union and MoneyGram.
Another common scam back in the 90s, which was heavily featured in early Scambusters issues and which is still with us today, was the phone scam in which victims were tricked into dialing premium-line numbers.
With the subsequent growth in cell phone usage, phone scams these days are more likely to try to trick you into signing up for a recurring charge for services like jokes or ringtones that you don't want.
(See The 10 Most Common Cell Phone Scams and How to Avoid Them for a list of common phone scams.)
By the turn of the millennium, viruses and auction-bidding frauds were grabbing the scam headlines.
At that time, the Federal Trade Commission launched what it called "Operation Top Ten Dot Cons," which resulted in more than 250 law enforcement actions against scammers.
Online auctions, phone bill "cramming," travel and get-rich-quick investment frauds featured in that list along with the early examples of phishing -- collection of credit card details and other personal information for identity theft, which we first wrote about in Issue #47.
Despite the FTC's valiant efforts, those scams are still with us. In fact, almost every scam we've written about since Issue #1 in November 1994 is still around!
One trick that does seem to have faded in the intervening years is overcharging for Internet access, with disreputable Internet Service Providers (ISPs) trapping subscribers into long-term contracts and then charging a penalty for early cancellation.
Internet fraud was beginning to make its mark by that time too, with 83% of online merchants saying this was a big worry for them, according to a 2000 survey.
In fact, the National Consumers League, which launched its Internet Fraud Watch two years after Scambusters began, noted that incidence of online fraud tripled between that year and 1997.
"It's like a giant yard sale in cyberspace," the IFW's director was reported as saying. "Consumers purchase a variety of items that are advertised online, but they don't always get what they bargained for."
You bet. Sadly, in the intervening 15 years, nothing has changed -- except the sheer scale of the crime.
Back in the 90s, the average loss per online scam ran to a couple hundred dollars. In 2011, according to the latest annual report from IC3 -- the Internet Crime Complaint Center -- that figure now tops $4,000.
The total cost of those scams was more than $450 million but, as many victims never report their losses or, for one reason or another they don't arrive on the IC3 books, the true annual cost in the US alone is likely in the billions of dollars.
Ten years earlier, in 2001, the "official" figure was just $6 million!
It has been a dramatic journey from there to here, but perhaps the most notable change in that time has been the surge in identity theft, which, as we know, wrecks lives as well as savings.
That is why, many years ago, we launched our Identity Theft Information Center.
Most recently, we have witnessed an alarming rise in theft of personal information through large-scale hacking by organized criminal gangs, the scale of which we could barely have imagined back in 1994, when we turned out Scambusters issue #1.
Says Audri: "We're proud that, despite the costs of research, writers, editors and admin, we have been able to maintain Scambusters as a free service, thanks to subscribers and followers supporting our advertisers and our other sites."
So, thank you. We have appreciated your continued support and look forward to the next 500 issues!
We have no illusions about driving the scammers out of business, but we believe more strongly than ever that, as much as it is abused, the Internet is also an important force for good -- and the more we use it that way, and share information of the sort we publish in every Scambusters issue, the fewer successful scams there will be! We thank you for being a loyal subscriber.
Time to close today, but we'll be back next week with another issue. See you then!