March 6, 2003
Bill Aims To Stop 'Dot Cons'
By Sue Major Holmes
The Associated Press
The e-mail pleads: "PLEEEASE READ! It was on the news!" It goes on to tell the reader that Microsoft founder Bill Gates is paying people who forward the e-mail to friends because he's running a test of an e-mail tracking system.
He's not. And he's not sharing his fortune.
It's a hoax that's been circulating for years, says James R. Golder, who handles Internet consumer complaints and "dot cons" for the Federal Trade Commission's Southwest Region in Dallas.
Internet-related fraud complaints made up 47 percent of all complaints to the FTC's national Consumer Sentinel last year, Golder said.
New Mexico ranked 20th in the rate of complaints.
No one's sure how much Internet scams cost consumers each year. A 2001 study of 10,000 complaints said those cost Americans $18 million.
A New Mexico measure referred to the state Senate Public Affairs Committee would ban unsolicited e-mails or faxes without an e-mail address or toll-free number a person could contact to tell the sender to stop. Such e-mails also would have to be designated as advertising.
"I'm a prisoner of cyberspace," said the bill's sponsor, Sen. Dede Feldman, who's tired of solicitations to her personal e-mail and the fax used for her small business.
South Carolina and Arizona are considering a bill to crack down on unwanted e-mails. Twenty-five states have passed similar legislation.
Feldman gets 20 to 25 unsolicited e-mails a day, "everything from herbal Viagra to breast enlargement to scams involving royal families in central Africa," she said.
Small businesses find themselves wasting time "just deleting these messages and dealing with these messages they never wanted in the first place," said Feldman, D-Albuquerque.
Her proposal could have helped the Baptist Foundation in Albuquerque after spammers hijacked its server, the central point on a computer system where e-mail messages go in and out.
The nonprofit foundation began having difficulty with its server running out of memory last July. It took months to discover it was being used by spammers to send masses of e-mail, said Jessica Dotson, who heads the foundation's information services.
At one point, the server locked up with 90,000 e-mails waiting for delivery.
"I would clear it out and it would lock up with a similar number the next day," Dotson said.
Eventually, the foundation spent $10,000 on a new server spammers couldn't control, she said.
But there was a higher cost. Because it had been known to send spam, the foundation's e-mail address was blacklisted by such large Internet providers as AOL, preventing the foundation from e-mailing board members or answering queries from potential donors with AOL e-mail addresses. The problem lasted through December, Dotson said.
The New Mexico attorney general's office has a 6-inch-thick file of complaints about unsolicited e-mails and faxes many of them scams just looking for a victim.
"It just doesn't stop," said Sam Thompson, spokeswoman for Attorney General Patricia Madrid.
Take the infamous Nigerian scam.
"What's the likelihood a complete stranger is going to offer you 20 percent of $40 million?" asks Thompson. "Put in that context, people say, ╣Oh yeah.╣ ╣╣
The scam, which has circulated for years as letters, faxes and telephone calls and more recently in cyberspace, solicits help from an overseas partner to channel millions in "trapped funds" through a U.S. bank account. For allowing the sender to use the targeted person's bank account, the scam promises 20 percent of the proceeds.
Instead, victims find their accounts cleaned out.
In the latest version, people selling items online end up with a counterfeit cashier's check a variation that cost an Espanola man more than $4,000, Thompson said.
Someone purporting to be from Africa responds to the online sale, offering to pay with a cashier's check on a U.S. bank. He later calls back to say he sent too much and asks the seller refund the difference.
The seller usually has sent the refund by the time the bank discovers the check is a very good counterfeit, Thompson said.
"That's what the scam is, to get the cash," she said.
Golder and Thompson give the same, oft-repeated advice: If it sounds too good to be true, it probably is.
The FTC receives 70,000 to 80,000 forwarded spam e-mails a day up from 4,000 in 1995. It uses them to track where volumes of spam come from and to detect deceptive practices, Golder said.
Feldman's measure, which would amend New Mexico's Unfair Practices Act, would allow an individual who sues to recover attorney's fees making it easier to sue because attorneys could take a case on a contingency basis.
"Without attorney's fees, it's hard to find a victim who can afford to take action," Thompson said.
It's more than people not wanting to be bothered by unsolicited mail.
"Obviously, from a law enforcement perspective, we are concerned that people don't fall for these scams," Thompson said. "When you have a large volume of things that come in, these scams can hide."
Traditional consumer frauds work-at-home scams, pyramid schemes, chain letters have migrated to the Internet. In addition, Golder said, technology has spawned new scams, including charging for services never ordered, harvesting e-mail addresses to sell and Internet auctions.
"It's a lot cheaper to set up an Internet business than a brick-and-mortar business. . . . They can set up as fast as you can track them down," Golder said.