The Australian Competition and Consumer Commission's crackdown on internet scams continues, as websites that are 'Too Good to be True' are targeted as part of the International Internet Sweep.
During the next three days the ACCC leads consumer protection agencies from 24 countries who will scour the internet to uncover shonky websites which mislead consumers.
The ACCC is scrutinising websites which make claims which are 'Too Good to be True', such as get rich quick schemes, work at home schemes, and 'free' offers. The lure of quick, easy money and opportunities to work from home entice consumers into such schemes. Common pitfalls include start up fees, added costs, and grossly exaggerated earning potential, often resulting in thousands of dollars lost after being poured into internet scams.
"The ACCC received an increasing number of complaints and inquiries about internet scams throughout the year of 2003. The internet is prime territory for scammers around the globe who seek to take advantage of international boundaries to avoid detection", ACCC Chairman, Mr Graeme Samuel, said today. "Scammers are increasingly using the internet to try and make a fast dollar and take advantage of vulnerable consumers".
The International Internet Sweep is an example of worldwide consumer protection agencies working to together to combat cyberscams. ICPEN* is a network of consumer protection authorities of 31 countries. Its main objective is to take action to prevent and redress deceptive marketing practices with an international component. The network fosters cooperative efforts by member authorities to tackle consumer problems connected with cross-border transactions in both goods and services. Exchange of information between authorities also plays a key role in effective investigations and court action where necessary.
"Cross border cooperation is essential to combat these types of scams. Enforcement agencies are increasingly working together to combat internet fraud, where scammers exploit the international nature of the internet".
Successful ACCC action targeting internet scams includes court action against Crowded Planet and Purple Plates.
Purple Harmony Plates Pty Ltd claimed its product could produce numerous results, from protecting against electromagnetic radiation, to strengthening the immune system, and lowering body stress and fatigue levels. The Federal Court found that these claims could not be reasonably demonstrated and after the company failed to publish a corrective statement on its website, imposed $30 000 worth of fines against Purple Plates and its company directors. The trader was then subsequently imprisoned for failing to comply with the conditions.
In the case of Crowded Planet, David Zero Population Growth Hughes was allegedly supplying contraceptive pills over the Internet without a prescription, a practice which is illegal in Australia. He also allegedly made comments on his website which indicated that he had ACCC approval to do so. The court found that Mr Hughes had supplied the contraceptives in Australia in breach of the TPA and ordered that this supply only be allowed under certain conditions. The court also ordered that Mr Hughes be restrained from selling to people in the USA. The ACCC alleges the conditions have not been complied with and that Mr Hughes is in contempt of court. A hearing is scheduled for April 2004.
Remember, if it looks to good to be true, it probably is. Here are some tips to avoid getting caught:
- avoid promises of instant wealth, 'free' gifts, incredible discounts and bargains;
- read all the terms and conditions and fine print;
- be very wary of testimonials claiming astounding results;
- ask around, get professional advice; and
- research the business: do an internet search on the name of the product/company, verify any contact and company details.
*International Consumer Protection and Enforcement Network (previously IMSN)