To many people, taking the plunge, and investing in property for their future is a major leap of faith. Imagine how they must feel, if their investment turns out to be an investment property Scam?

Is there a way out of any Investment Property Scam?

The first thing to realise is that if you do feel you have been conned, you are probably not the only one. It may feel like it, and you may feel alone, stupid, cheated, and angry or embarrassed – some of the common emotions felt at this time.

But, these are the emotions that developers with crooked minds will encourage you to think. They hope that you will feel ’suckered’, and just don’t want to tell anybody. In fact, with a clever scam, there may seem to be nothing to tell anyway, apart from your gut instinct, until you start digging.

But inertia is just what these criminals (and they usually are criminals) want you to think. In these circumstances, you must not hold it all into yourself. You must try and find if other people have been duped into a similar situation. You never know, you may be one of ten, twenty or hundreds of similar souls, and if you can find, and become identified with such groups you will stand a far greater chance of getting retribution, believe me.

I got caught up in such an investment property scam about 18 months ago (I know – gasp – shock – horror – and I sell investment properties!). For some months, I thought I was going crazy, I could not understand why I could not get tenants in at anywhere near the prices I was expecting, or even get tenants at all. This was the first revelation, as I had been promised that the properties would have been fully tenanted on completion. Well, at least, that’s what the brochures said, as well as the sales manager at the presentation I attended. And I had bought a number of these ‘beauties’ each supposedly fully tenanted and making me around £500 each per month rental surplus.

Then I started to investigate the situation more thoroughly, and I soon identified the problem. It’s a down and out highly complex investment property Scam!

So how did I, an experienced property investor, and a reseller of investment properties – get involved in an investment property scam?

I’ll tell you how – perhaps Criminal Intent?

What I have done is to chronicle the events that actually took place with my investments, of which I have since found out there were well over 100 similar incidents.

Before I went into this investment, or even recommended them to others, which consisted of a number of refurbished houses converted into HMO’s for students (Houses of Multiple Occupation) I investigated the company thoroughly. (Note the company and location of these houses is not mentioned in this report for legal reasons). I checked out at least 6 of their property conversions, spoke to their rentals people, and spoke with several existing investors. I took my business partner at the time with me to check out my findings. I was also comforted by the fact that these people were spending (and still are spending) a lot of money in the big national newspapers (Sunday Times, Telegraph, and so forth), and had produced a whole range of glossy brochures backing up their claims.

Some of their larger off-plan developments were also being featured in a two-page spread in one of the UK’s leading property magazines. Not only that, but they had (and still do have) very large exhibition stands at a number of the leading UK Property Shows.

Everything seemed to stack up, so I bought a number of them, and encouraged my friends, close family, and business colleagues to buy some also. I paid my reservation fees, and just settled down to wait for these to be completed, and to start generating some surplus cash every month.

The first event in the chain of things was that the houses were very late in being completed, so we were in danger of losing the student intake for autumn 2005, but the investment still seemed quite good, and anyway we had all exchanged contracts by then. And, of course, we all thought we had at least an 11% equity holding in each property, plus the usual growth of 4-6 % from last year. Also, when asked if we could inspect them prior to completion, we were told – “Sorry, as you have tenants in them, you have to give 48 hours or more notice”. Then when we did try for appointments nobody could find the keys.

Where were my alarm bells I hear you ask –

Obviously on Silent Mode!

But then the dirt really started to rise to the surface…

These houses were all sold under the premise of ‘All contacts for services under one roof for the investor – Use our Services for Sales, Recommended Solicitors, In-house Brokers, mortgages, Tenancy Management from our Own Company’ – you know, a really good packaged deal for the armchair investor.’

Issue 1 was that the houses were not fully tenanted on completion, and in a lot of cases, the tenants seemed to ‘melt away’ after contracts had been signed. So much for the promises made in the developers’ glossies that tenants would be in place before completion, with cross-guarantees so that there would be virtually no void periods, no issues with rent, as if one tenant failed to pay, the cross guarantees meant that the other tenants would be liable.

Also, in some cases, (not with mine luckily) no renovation work had been carried out at all, and the developers then had the cheek to ask for £3,000 per property to fix those that had not been done. Then, major issues with the building work started to surface. Basements would flood, not due to rain, (although this did happen on a number of occasions where the basements had not been ‘tanked’ correctly), but due to faulty plumbing, But if course we had a 12 month warranty contract – Right? Wrong?

Even after constant phone calls and emails, the management company failed to send us proper records, and they did not keep us informed of maintenance issues, tenants leaving, tenants not paying rent on time – all the sort of standard things one was used to expect from a ‘proper’ management company that charged 10% of the rent as fees.

And the hassle I had moving the management agreements to another company is another story for another day when it can be told.

Ok, so, this just seemed like rogue building work and an outright total lack of proper management by the department handling the tenancies. Not the sort of service to be expected from a firm carrying out so much nationwide marketing, but of course, being of such a high profile firm, you would have thought they would have fixed the issues. Right? Wrong!

So because of all these issues, I had by now started to do some very intensive investigation into this company, and the methods being used to package the sale of these houses.

It then transpired that most of these houses had been bought by the developer some three to four months prior to selling them, for about £90,000 – in the developers words – derelict houses that were totally gutted; 3 bed properties that had basements opened out, and or roof conversions done, so adding as many as 2, 3 or even 4 more bedrooms, and supposedly converted to the highest of standards for HMO purposes, and these were sold to us for around £249,950 up to £325,000 and higher.

Ding Ding Ding – Alarm Bells…
Why were we quite happy to purchase them – because they all came with RICS (Royal Institute of Chartered Surveyors) valuations on the property value and the anticipated rental incomes.

All of which matched the developers claims.

But when we noticed that several investors from other groups were having some of these similar houses repossessed – as they were not getting the rent, and consequently could not afford the mortgage, and the valuations were all coming in at around £80,000 to £100,000 BELOW THE MORTGAGE VALUE!

Our own investigations then uncovered that many of these properties had been valued by the same firm, and for comparison, they had used properties by the same developer on the valuation form.

We have come across instances where the mortgages that were granted they :-

· Were not valid for multiple occupancy homes – so why was a loan granted?

· Would not have been granted had the banks known the properties were already tenanted, and not sold as vacant possession. So why was a mortgage granted?

· Would not have been granted if the valuation rental assessment was not realistic. So loans were granted on incorrect information. If the investor had put the rental figures in, they would have probably been done for mortgage fraud.

· Would not have granted a loan (especially interest only) if the true valuation figure had been known.

· Would not have granted 85% of the assumed value had they known a Gifted Deposit was being paid (along with legal and other fees by the developer). The solicitor was aware, as was the broker, so how come the lender was not informed?

Now, as I like to think of myself as a ’savvy investor’, knowing that gifted deposits, cash backs etc happen and quite often jump start the property market on the move, I had told my solicitor(s) what the side deal was, the broker told me what the deal was, so no problem right?

Wrong… I then find out that neither the solicitor(s) nor the broker had informed the lender.

Somewhere along the lines, something was wrong here.

The question is – Was it the fault of:-

·The Developer?

·The Solicitor?

·The Broker?

·The Investor?

In a society where regulations covering solicitors, brokers, mortgage loans, and valuers seem quite strict, I must say I think something is awry here, where the hapless individual investor can walk into such an unregulated trap!

If you feel you have been involved in such an investment property scam, and would like to see if there are others in the same boat, please visit my blog where you can voice your opinion, and even add your name to a structured list if you want so we can build up a database of like events that could be easily analysed to spot trends, or passed to ‘Watchdog’ for instance.

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International Scams and the new Methodology

So you’ve heard about the Nigeria 419 scam, and about the Russian and Philippine brides-to-be scamming American and European men out of thousands. You’re street smart, and you’re not going to fall for some foolish game. You won’t be sending money off to Africa. You wonder, how can anyone be so foolish, to send thousands of dollars off to Ghana, Nigeria, Russia, the Philippines, Colombia or South Africa, to someone they’ve never even met? All you need is a little common sense, you say. But, is it really that simple to prevent? Does it really take a fool?

There are approximately 2 billion Internet users worldwide. Many have just recently discovered the world wide web. Many are senior citizens, many are honest, hard working and trusting folks who expect the same of others. The truth is, advance fee fraud has come along way since the early days of emails claiming the individual has won big, or has been selected to participate in an amazing business opportunity, with the only catch being the advance fee to release the winnings, the cash, etc. Sure, the public is more educated now about scams. So, why then is the number of victims rising rapidly in almost every country in the world?Wymoo International, an international background check and investigative firm, recently reported on the methodology and fraud schemes employed, and how so many intelligent people worldwide become victims. According to David Wilkerson, Vice President of Wymoo, “criminals have evolved advance fee fraud into endless variations and use sophisticated techniques to conceal their identity. They seek out their victims on dating websites such as Match.com and countless others, where they proceed to establish long and seemingly meaningful relationships via the Internet. They make phone calls to the victim; they send flowers; they send email and instant messages. In other words, they invest significant time in their scam and victim. They may claim to be a doctor or relief worker in Africa. They may claim to be in love and making arrangements to leave the country. Or, they may have been in a terrible accident and need financial support, etc.” In response to whether or not it takes a fool, Wilkerson replied that “victims are from all walks of life, doctors, lawyers, corporate executives, pilots to single mothers. Bottom line is that the criminals are professionals and very convincing.” A scammer may work a plot for up to 6 months or even 1 year before requesting money. And a professional scammer in Africa or E. Europe can earn up to $200,000 USD annually.

What does all this mean? Approach relationships via the Internet with a skeptical eye. Beware of requests for money from persons in another country if you have never met that person. Lastly, even if you think you truly know the person, and you have every reason to trust him or her, get the professional background check. The hardest thing about being in this business, says Wilkerson, is too many clients get the background check after the fact, rather than being skeptical and safe from the beginning.

Play it safe,

A. Hathaway

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No doubt you’ve heard the battle cry of MLM marketers: “Be your own boss and make thousands of dollars a month in just a couple of hours a day!” Everyone wants that, right? Yet, even though some MLM marketing is indeed legitimate, far more of it is simply a scam meant to empty your pockets make someone else rich. Therefore, just as with anything, you need to live by the adage, “Too good to be true.” If, indeed, you take care and something turns out to be legitimate, that’s great. But it’s far better to be cautious upfront and hang onto your money until you know everything there is to know about the particular venture you’re investigating. Then and only then should you invest your hard- earned money if in fact you feel that this is a legitimate business opportunity.
First of all, there are a couple of myths to dispel. Never, and I repeat never, is an opportunity out there that will take no work. Any opportunity out there will take at least some effort to set up, get going and maintain. Don’t expect to “get rich quick,” and do expect to put forth a fair amount of time investment and at least some initial money investment before you see profits.
There are two schools of thought when it comes to MLM. Many speak highly of MLM as a legitimate opportunity, with some qualifiers. For example, Donald Trump was asked what he would do if he had to start all over again today and was looking for something to begin with. His answer unequivocally was MLM. Someone else said that it was a wonderful opportunity to both be your own boss and be mentored at the same time.
Still others see it as nothing more than a scam. One of the major drawbacks is that you probably aren’t going to make a lot of money with an MLM until you have a lot of people in your downline, or underneath you. This takes a lot of time to get to this stage and you may in fact not get there at all. You also have to spend a fair amount of money to stay in the MLM every month. Many have to quit just because they can afford to keep spending the amount they must to stay in the MLM. Most don’t make the amounts of money “testimonials” say can be had.
Simply put, it’s not as easy as it sounds and as so many try, so often, to make it seem. Most people who get into MLMs actually end up more broke than when they started. It is only a few and far between who actually achieve actual wealth in an MLM, even a legitimate one. Most compensation plans pay so little upfront that you won’t make money until you’ve been in for a while.
Whether supportive or not supportive of MLMs, however, everyone agrees (if legitimate) that they simply aren’t for everyone. Simply, no matter what you do, MLM or traditional business opportunity, you need to have passion and a drive for your work that goes beyond simple monetary compensation. If financial gain is your only driving force, then you will doubtless fail, because a passion for what you do is what takes you through tough times. You need to believe in what you’re doing, be a product or service, or you’ll fail in the end.
Do your homework and research any opportunity you come across that looks interesting. Then and only then, after all careful research has been done, should you invest if it’s something that looks like you’d be interested in doing and can actually achieve passion about.

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What is the Securities Investor Protection Corporation (SIPC)?
The Securities Investor Protection Corporation was created by the U.S. Congress in 1970. The primary purpose of the SIPC is to help individuals who have lost money, stocks and other securities stolen by brokers or when their investments are at risk because a brokerage firm fails. Protection is provided sometimes through a request to a federal court to appoint trustees to liquidate the firm and protect its customer’s assets however, in the case of smaller brokerage firms, the SIPC may deal directly with customers. The goal is to quickly and efficiently mitigate the losses to customers that have made investments in firms that are members of the SIPC and that are experiencing bankruptcy or financial difficulty and now are in danger of going out of business. By 2007, the SIPC had made possible the recovery of assets totaling over 15 billion dollars for approximately 625,000 investors. This service estimates that approximately 99% of eligible persons have their funds returned by SIPC. Without the SIPC, investors at bankrupt or financially troubled firms could lose their money and securities forever or at best their assets may be tied up in court for years. So it is very important to know that when you invest, you are investing with a member of the SIPC. No protection is available to consumers who invest in firms that are not members of this protection corporation, and membership is not mandatory.
How can you know if your brokerage/investment firm is a SIPC member?
Investment and brokerage firms that are members of the SIPC will have the language of “Member Securities Investor Protection Corporation” or “Member SIPC” on all signs and advertisements. However, consumers should not rely on that information alone as some firms may not truly be members, or their membership may have lapsed. Confirmation of current memberships of a firm may be made by calling the membership department at 202-371-8300 or you can visit www.sipc.org. Only customers who have invested in institutions that are legitimate members of the SIPC are eligible for assistance and recovery of assets.
In some cases, SIPC members may have affiliated companies or individuals that work contractually for them. The “parent” company membership does not transmit to the affiliate or contracted individual. Those firms must obtain their own membership in the program. It is also not unusual for the affiliates to have have similar names, share the same employees or even operate from the same office space, but even in those cases, membership is not shared nor transferable. Each consumer should receive confirm that their investment services provider is a member as well as carefully review written confirmation of any transaction in your securities account and double check that it is issued by the SIPC member and not an affiliate.
Consumers may also verify membership by reviewing their periodic statements to determine if your brokerage firm is still operating as a member of the SIPC. In some cases membership has lapsed, and consumers need to be aware of those changes to their investment firm’s status, as any claims made on a lapsed member can not be processed.
One scam used by some so-called investment or brokerage service providers may be to fraudulently present themselves as members of the SIPC in an effort to either obtain customers or to obtain customer information, setting the customer up for schemes which may steal their investment or their identity. Quite often this is done through the use of web sites, that use the name of a legitimate brokerage firm that is a member of SIPC but list a different address. In other instances, the frauds may use the name or name and address of a broker registered with the SIPC and then sets up a fictional entity. Sometimes these fraudulent providers even issue a statement directing potential clients to verify the firm’s membership in the SPIC website as proof of the firm’s legitimacy. These scams result not only in the identity theft of the consumer, but of the legitimate member of the SIPC.
According to SIPC President Stephen Harbeck, “SIPC has recently received information from more than a dozen U.S. and non-U.S. victims of this type of fraud. Experience tells us that most investors who lose money never follow up with a regulatory authority. So, we believe that the complaints we are seeing are just the tip of an iceberg. In addition to issuing this warning, we have sent our files to state and federal securities regulators in the hopes of identifying and shutting down these ‘brokerage ID theft rings.”
Connecticut Securities Director and NASAA President Ralph A. Lambiase shares that: “Brokerage identity theft joins a long list of scams that rely on the Internet to stalk millions of potential victims at minimal cost. Identity theft is inherently difficult to detect. For that reason alone, investors should refuse any unsolicited on line contact from anyone seeking personal information or money by simply hitting the delete key. I urge investors to contact their state securities regulator if they suspect they have been defrauded by this scheme.”
The warnings for potential investor’s is two-fold, first be sure that you are using a legitimate member of the Securities Investor Protection Corporation for your investment opportunities. Only by using a member is your investment that much safer. Secondly, be careful especially of on-line investment firms, brokers and other invitations or opportunities. Quite often they are scams, and every effort should be made to not only verify the authenticity of the firm, but of the firms participating in the SIPC program.

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Many investors prefer to stick to big capitalization companies for their stocks investment. Oldies but goodies like Microsoft and Apple continue to remain stable despite market upheavals. On the other hand, smaller companies are quickly gaining notice in the stock markets. Crocs, a company that was a nobody a few years ago, has suddenly become a must-have for adults and children in the last few years, and the company’s share prices have risen noticeably.
Investment experts say that over the last 80 years, small cap stocks have gained an average of 13% a year versus the 10% gain of big cap stocks. This means that if you invested in small caps, over a ten year period you would have gained 230% as opposed to a 170% gain on big caps stocks investment.
Still, many remain wary of the small cap stocks investment because of the risk factor. The more adventurous investors take the small caps plunge, but only after carefully researching the companies and analyzing their trends.
Big cap stocks are those from the bigger and steadier companies, whose sales, although steady will not bring in as much profit as the small cap stocks. For many big cap companies, the expression; too big to fail is an attribute that is often true. Although these companies have their difficulties, many of them recover. The risk in stocks investment in these companies failing, therefore, is less.
Small cap companies generally give a higher rate of return on your stocks investment, primarily because fewer stocks are traded. With small companies, a few millions of additional sales may make the value of the stocks investment shoot up quickly. But then again, those same stocks can just as quickly decline on the same day, especially if someone unloads a huge chunk and there is not enough corresponding demand for the stocks.
There is also a higher amount of fraud involved, and if the stock hype is a fraud, the value can very quickly decline when those hyping up the stocks unload their holdings.
Investment experts say that the way to choose between big caps and small caps is to observe the market trend. There are times when the big caps rule, and there are times when the small caps take center stage. One way of finding out which one is the current market flavor is by looking at stock indices. These are charts that show the trend of stocks investment for both big cap and small cap stocks.
For big cap stocks investment, the Dow Jones Industrial Average (DJII) the Nasdaq Composite index, and the S&P 500 provide information on the performance of big cap funds. The Russell 2000 and the S&P 600 both keep tabs on small caps stocks. Taking the time to study the trend on these indices, and the performance of the stocks that you are eying, will pay off by providing you with historical information on how the stock has performed in the past and which direction it is heading to at the moment.
Ultimately, the decision whether to go big cap or small cap will lie with you. If the money you are intending to use for your stocks investment is your retirement fund, your lifetime savings, or your children’s trust fund, investing in the big caps would be wiser. You don’t want to risk losing that amount overnight on some small company whose stocks were too volatile for you to get out quickly.
On the other hand, if you have some disposable income with no intended use for it and you have the time to track the progress of your stocks investment, then you can go for the small caps, but only after careful research and analysis.
It makes more sense to have a varied mix of big caps and small caps stocks in your portfolio, so that when the big caps are not making any major changes your small caps stocks investment can give you earnings. Whatever you do, don’t go into any stocks investment without being armed with enough information about the company you’re buying into.

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Investing in income property can be a great way to increase your capital. But for many people, investing in real estate, especially commercial and industrial real estate is just out of reach from the financial point of view. But what if you could join forces with other small investors and large investments in commercial real estate in the group? With Real Estate Investment Trust, you can do it!
REIT means Real Estate Investment Trust, and is sometimes referred to as “real estate holdings.” Real estate investment trust is a companie that owns and manages a portfolio of real estate and mortgages. Anyone can buy shares of the REIT. Real estate investment trust offers the benefits of real estate without the headaches or expense of the landlord. Said another way the investor has the benefits of real estate ownership with no management role in the toilets and tenants.
Real Estate Investment Trust of certain types offers great benefits of liquidity and diversity. In contrast to the actual ownership of real estate, these measures can be quickly and easily sold. And because you invest in a portfolio of real estate, rather than one building, it comes with less financial risk.
Real Estate Investment Trust was created in the sixties when Congress decided that small investors should also be able to invest in large-scale, income-generating properties. It was found to be the best way to make it a model of investment in other sectors – the purchase of shares.
The company must distribute at least ninety percent of their taxable income to shareholders each year as a Real Estate Investment Trust. Most Real Estate Investment Trust pays out one hundred percent of their taxable income in dividend distributions. To maintain its status as a pass-through entity, Real Estate Investment Trust dividends are paid to shareholders annually.
From 1880 to the 1930’s, a similar provision in place, which allows investors to avoid double taxation – paying taxes as private and business – were convinced, because they do not pay income tax if the income is distributed to beneficiaries. It was abolished in the nineteen thirties, when the passive investments are taxed at the corporate level, as well as part of the profit tax. Real estate investment trust supporters were not able to change the law to overturn the decision within thirty years. Due to high demand for real estate funds, President Eisenhower signed the nineteen sixty Real Estate Investment Trust as a REIT tax pass-through entities.
The company must comply with all other requirements to qualify as a real estate investment trust and to win passage of a person. They should:
1. Be structured as corporation, business trust, or similar association
2. Be managed by a board of directors or trustees
3. Offer fully transferable stock shares
4. Have at least one hundred shareholders
5. Pay dividends of at least ninety percent of the REIT’s taxable income
6. Have no more than fifty percent of its shares held by five or fewer individuals during the last half of each taxable year
7. Hold at least seventy five percent of total investment assets in real estate
8. Have no more than twenty percent of its assets consist of stocks in taxable real estate investment trust subsidiaries
9. Derive at least seventy five percent of gross income from rents or mortgage interest
At least ninety five percent of a real estate investment trust gross income must come from financial investments (in other words, it must pass the ninety five-percent income test). These include rents, dividends, interest and capital gains. In addition, at least seventy five percent of its income must come from certain real estate sources (the seventy five percent income test), including rents from real property, gains from the sale or other disposition of real property, and income and gain derived from foreclosure of property.
This article was written by Robert Shumake, CEO of Inheritance Capital Group, LLC and founder of http://reitbuyer.com/ an online service for people who wish to invest in real estate without the headaches and liability exposure that go with being a landlord. Visit Robert’s website to learn more about Real Estate Investment Trust.

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With today’s internet super highway technology, online trading and ecommerce are becoming more and more important. Whether you are new to ecommerce or a seasoned website owner, knowning how to protect your online investment is more important than every. We would like to share some important tips for merchants who do business online.  In today’s ecommerce world, knowing how to protect yourself is extremely important. Everyday, there are online companies who become credit card fraud victims. But hopefully, after reading our article, readers can have good understanding on how credit card fraud happens and how to combat credit card fraud and protect your online business and your reputation!

Credit card fraud happens whenever someone obtains a victim’s credit card account number and uses it to make unauthorized purchases. It can be a dishonest restaurant clerk making an extra imprint of your card, a thief who picks up a receipt you discard, someone pretending to be a telemarketer taking your order, the list goes on endless. It is absolutely critical to protect yourself and your identity.

If you are a customer, the consumer laws are usually on your side to protect you, if you report the discrepancy and file the credit card fraud dispute with your credit card company on a timely manner. However if you are a merchant, the penalty could be severe, because not only the chance of you winning a fraud dispute is slim, but also the merchandise is lost forever. Moreover, you will be black listed by major credit card companies, which will have negative impact on your future credit card processing rate, and many other fees. You may even end up being declined for online merchant services completely.

Let us begin with taking order process. When a customer purchases online, she/he will go through the checkout process, filling out the credit card info, and finally hit the submit button at the end. However when you receive an order, how do you know if a credit card being given is legitimate?

This is where your online merchant gateway service company, such as Authorize.net, etc becomes very important. Today, all online merchant gateway service providers can detect a credit card’s identity by verifying the billing address of the credit card. In reality, the system will check the street numbers and the zip codes with the credit card company’s record and make sure the information will match. So, you must learn to correctly co figurate the setting in your online payment gateway utility section. Services providers are different, so if you are new to this, call your service provider over the phone and have them to walk you through.

Please note there are times when your online merchant gateway service provider cannot successfully verify a card’s billing address. The cards are actually good, but it could be due to a computer glitch or other unknown reasons that your systems just cannot verify. When this happens, you need to contact your merchant services provider and ask who the card’s issuing bank is and their telephone number. Your service provider can usually tell who the card’s issuing bank is based on the first 6 digits of the credit card numbers that you will tell them over the phone. Then contact the card issuing bank directly and speak with a representative over the phone to verify the card’s billing address. We sometimes have to go through this way to approve a card.

When dealing with foreign customers, sometimes your payment gateway services provider may not have the capability to verify a foreign address. In such case, we recommend that you email the foreign customers and ask for the following documents:

1. front and back image copies of the credit card used2. ID, such as passport or driver’s license.

Be sure to send the request email politely, explaining the reason for additional info…”to protect customer’s interest”.

At Kejeweler.com, we receive foreign orders from time to time.  And we always ask for these two documents. Our experience tells us that foreign buyers with “true good faith” always provide the requested documents without hesitation. And then there are those, when you send the request, you never hear back from them again.  Finally, when a transaction is large (this is subjective, say for example, any order over $3,000 or whatever amount you decide) we usually require wire transfer.We hope this tip will help out everyone who may be new to online processing and security issues.

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According to new figures released by the BBC, internet credit and debit card fraud in the UK is a much bigger problem than it was previously thought. This makes it essential for small businesses with ecommerce websites to ensure that they are offering their customers a secure online payment method. Failure to do this could reduce online sales or even damage your reputation as a business.

The Rise of Internet Crime

Data obtained from the banking industry indicates that card losses from internet, phone and mail order crime amounted to a massive £290.5m in 2007. However, the BBC statistics showed that this amount could amount to as much as £500m if failed attempts at internet crime were also taken into account. These statistics add weight to the Tories’ argument that the government should appoint a minister to deal specifically with internet crime. However, government ministers have already stated that they have invested a significant £29m towards the fighting of online crime and they have also vowed to work with the banking industry in order to encourage online retailers to adopt more anti-fraud devices.

Undercover Investigation

The BBC figures were obtained after BBC News underwent an undercover operation into credit card fraud, which revealed just how simple it was to gain access to stolen credit and debit card details online. During the undercover investigation, two BBC journalists posed as computer hackers in order to infiltrate a website that sold thousands of credit card details that were stolen online from small retail businesses. The journalists obtained the details of these stolen cards and when they were used, they traced the transactions to a number of UK addresses. It is thought that the BBC has now passed this information on to the police.

Getting Away with It

Andrew McClelland, a spokesperson for the Interactive Media in Retail Group (IMRG), which is an organisation that represents online retailers, said that these statistics showed that despite the online marketplace making a significant contribution to the UK economy, it was still too easy to commit fraud and other crimes on the internet. He said: “If you’re committing a crime online then there is a high probability that you’ll get away with it and even if you are caught a fairly high probability again that the punishment won’t be that severe.”

Fraud Prevention and Protection

Until the government decide to do more to combat the ever-increasing problem of internet fraud, one of the only ways to help prevent it is through responsible retailing. Therefore, in order to better protect their customers from credit and debit card fraud on the internet, small businesses should ensure that their ecommerce websites are as safe and secure as possible.

Source:

BBC

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Internet Fraud is on the rise with scammers not only sending out proliferations of scam emails for lottery scams, the 419 or ‘Nigerian’ scams, multi media piracy, investment and securities scams, chain letters and pyramid scheme scams, and unlawfully selling prescriptions online there is a rising trend in general internet fraud for the online trader.

If you are the owner of an E-Commerce website you must be particularly vigilant these days in the arena of the world wide web to protect your business from online fraud. As an online trader myself I have witnessed first hand the regular and increasing attempts to defraud our jewellery business through online ordering. Many of these fraudsters are identified before they can actually place an order through our website’s ecommerce systems, occasionally an order slips through and gets approved by our online ordering systems so in this case how do you identify that it’s a suspicious transaction?The key identifying tags of ‘online fraud’…

Typically a conman will first send you a ‘feeler’ email with a simple subject matter saying they are interested in purchasing your products and ask if you accept certain types of credit cards and whether you ship internationally. There will usually be no mention of a specific product that they are interested in. They will also nominate a country where they want the order delivered to. If they mention Lagos, Nigeria or South Africa then delete the email immediately and block the sender and take no further action. The majority of these types of scams will originate from Nigeria using stolen credit cards. However don’t be fooled by the legitimacy of a country’s location we have received these types of scam emails from the UK, Ireland, USA and parts of Asia.

If you are unsure as to whether the email is a scam you can check the IP Address of the sender in the email header for a match in the Internet Registries to verify which country the email is originating from. To access an email header and locate the IP Address of a sender, right mouse click on the title of the spam email in your inbox and select ‘options’. The authentic IP Address is usually the one listed at the bottom of the email header, in most cases all of the information provided at the top of the email header is false and is used to conceal the real identity of the sender. When you have located the IP Address enter it into the following Registries of Assigned Internet addresses to search for a match:-APNIC (Asia Pacific network) www.apnic.net/whois RIPE (European) www.ripe.net ARIN (American Registry) www.arin.net LACNIC (South America & Caribbean) www.lacnic.net

If there is a discrepancy between the location of the Internet Service Provider and the customer’s stated country of origin in their email you can be pretty certain it is an email scam.

Another indication that you are being contacted by an email fraudster is that they will order several of the same product and colour and have little regard for the cost of freight. They will often select the most expensive International Courier methods of freight delivery.

If the email sender is presenting themselves as an established business with a website address then you can check their website URL for legitimate contact details. If it is a scam often the website will be ‘under construction’ or have a page holder in place. You can check this business out further by typing their business name into the Google search engine and see what results turn up. If this is a scam often other businesses will have been targeted too and they will sometimes publicly report the scam artist online and their details.

If you are still unsure as to whether you are dealing with a fraudulent email scam then proceed by sending a polite email asking for more details, specifically the products the customer is interested in, their address and contact details for delivery. You will then be able to quickly ascertain from the email responses whether the order is genuine. In most cases the sender will give a vague response or typically order several of the same item (usually a high ticket priced item) and select an expensive freight method.

As the holder of a merchant account you are liable for accepting payments made with stolen or falsified credit cards. Suspicious orders will generally exhibit some of the identifying factors listed above, multiple products of the same type ordered and expensive methods of freight selected. However be wary as these types of scam artists are becoming more sophisticated in their approaches and a fraudulent order that has made it through your online ordering systems and has been approved may only be identifiable by the method of freight they have selected as ‘Express Courier International Freight’.

The fraudster may test with a small order first to see if the credit card payment has been approved and if you have not detected the order as fraudulent, they will then send through another order within a short time frame usually within a week so they can get the most benefit out of the stolen credit card before it is detected or reported stolen by the owner.

I have also encountered cases where the fraudster has set up an email account in the name of a legitimate customer (identity theft) with contactable phone numbers and address details and then adjusted the delivery address details via email contact using a valid email address prior to the order being sent out. Prevention measures to counteract online fraud…

So what can you do if you receive a ‘suspicious order’ that has successfully been processed through your website including credit card approval:-

• Firstly check with your bank to see if the credit card has been reported missing or stolen.

• If you still believe the transaction to be fraudulent then have the transaction reversed and the money credited back to the credit card involved. You have the right to refuse any payments that you feel are suspicious.

• Inform the customer that you suspect the transaction is fraudulent and refuse to accept the order. You can request that if they are still interested in the purchasing the goods that they pay by an alternative method such as money order, bank transfer or Paypal.

• Do not send any goods out to the customer. If you have sent goods out and they have not yet reached the customer then have the delivery stopped and the parcel returned to you. At least this way you will recover some of the costs of the order to your business.

• Disable any customer accounts or member logins in your website database have been identified as fraudulent.

Make sure that you educate your staff involved in processing orders as to the telltale or possible signs of a fraudulent online order and be vigilant in detecting online fraud in emails and approved online orders. Credit card fraud can become a costly expense for your internet based business so be wary.

© Rosemary Donald, Rank1 Website Marketing 11th August 2007

www.rank1websitemarketing.com

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If you’re using Google Adsense to generate an ongoing income stream from your online web presence then maybe you should listen up. If you don’t understand just what Adsense is all about and what it can mean for you it will cost you money. Adsense click fraud is serious and before you land yourself in deep water you might want to read this.
Many website owners have had their Google Adsense accounts terminated even though they have done nothing wrong. This is a painful experience for some, considering the money site owners are generating from Adsense, so if you want to avoid making the same mistakes pay attention.
Click fraud is the act of clicking on ads for the purpose of costing the advertiser money. A bit like paying out cash for false leads. Some site owners are asking friends, family and even complete strangers to generate ongoing revenue by clicking repeatedly on their ad placements.
How do you prevent being involved in this fraud?
The majority of web hosts are offering access logs. Once this is offered to you, hand it over to Google as well. This allows them to look for any suspicious activity on your site. By doing this you are saying you want to help them in any way you can in solving the problem of click fraud. It’s a bit like walking into a police station and offering your set of prints just to prove you’ve no intention of committing a crime.
Click monitoring software can also help and if you don’t have this in place already it could be worth the investment. In reality most of this software is free to download so there is nothing to stop you putting this in place straight away.
Study your server logs and watch for any activity that seems suspicious. Report anything that you may find odd, big or small.
You might also want to consider disabling ads for your own IP address and local geographic area. This will prevent accidents and will not make Google mistake another user as you. You can do this through a ht access file. This will avoid Google mistaking your site management activity as clicking on your own ads and stop you being kicked out because of it.
Keep your Adsense off on pop ups and pop unders. Your ads should not be displayed on content sites that promote illegal activity or tampering of the legal rights of other people or business. Included in this are content considered adult, including gambling and gaming sites. If you think that you may be breaking this rule, immediately remove your content or Adsense from these web page.
If you do make a mistake, be truthful and hold your hands up to Google. Tell them about any times when you might have clicked on your own as, whether accidentally or intentionally. Honesty is the best policy as they say.
Do not tell your family or friends about Adsense on your website. Chances are they may start clicking on them to help you make money without you knowing it and land you in deep water. They may not realise it but they’l be doing more harm to you than good so keep it under wraps.
Most pay per click networks have different measures in hand to protect website owners against click frauds. Search engines can track more than 50 data points, IP address, browser’s information, user’s session info and pattern recognition and have “systems” available that detect fraud. To add to this, they have specialized teams dedicated to monitoring how things are going and helping advertisers prevent click fraud.
If in doubt, Google offers suggestion on how to avoid click fraud. Read it and pay attention. If you don’t you’ll possibly pay the price.

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