Using the Net to avoid fraud and scams

By Zatni Arbi

JAKARTA (JP): Many years ago a postcard arrived in the mailbox of my tiny apartment in Honolulu. The message read: "Mr. Arbi, we are very excited to inform you that you have won the most sophisticated electronic piano. To receive your prize, please send us US$14.95 for shipping and handling."

Well, I loved playing the piano, so I sent a check for that amount to the address printed on the postcard. After about one month, I finally received an electronic piano. The most interesting thing about it was that the size was much smaller than I had expected. The so-called "most sophisticated electronic piano" was offered at the Aloha Stadium's flea market for less than US$1.50.

That was the first lesson I had in American scams and frauds. Being an Indonesian, it took me quite some time to overcome the disappointment caused by the realization that people were basically the same--whether they were Indonesian or American or European or whatever else. There are people everywhere who do not feel badly cheating other people rather than following nature's law of "hard work before success".

Get rich quick

The situation does not seem to be much different today, especially with news that nouveau riches abound. In its May 15th issue, for example, Business Times reported that 20,000 Australians become millionaires each year thanks to the Internet boom and stock trading.

Another magazine that I read reported that a new kind of counseling is now very much sought in Silicon Valley, as the newly rich don't know what to do with their sudden wealth. There are probably many readers without a lot of money who can tell them what they can do with their cash bonanza?

Incidentally, some time ago a gentleman called me on the phone. He did not say anything about making me rich overnight. He was only telling me about an Internet company based in the U.S. that I might be interested in writing about. That was perfectly fine, because I always enjoy meeting new people and learning about their lives and business activities.

So I listened to him as he told me how the company had a grand plan for Indonesia and the region. After a few moments, I was began to have some interest in what he was saying. Perhaps this was truly a company that would be influential in the future, and I would take pride if I were the first to write about it in my column.

But, as usual, I used the Internet for a little background research. I went to Altavista, and I typed in the name of this company. Boy, what a big surprise! The word "scam" immediately appeared--even on the page's banner.

There was a list of Web sites, some with the word "illegal pyramid scheme" while some others highlighted the word "great business opportunities with minimum efforts".

There were long discussions on message boards, one of which interestingly ended up with just "pooh bah". So the axiom is proved again: "Buyer beware". One is well advised always to ask some basic questions such as: "Is it legal? Is it sustainable?"

What is the bottom line here? Certainly, before you commit your hard earned cash, use the Internet to check the company you're interested in. At the least you will be able to make a more informed assessment of its business. The last thing you'd want would be to see that you've bought just plain air--or the most sophisticated electronic piano!

Internet can help

There is a wealth of information on the Internet that you can use to protect yourself. One of my favorite sites, as I have written in the past, is www.consumerreports.org.

Consumer Report, which is also available in print, has been helping me quite a lot with my decisions, even when I once ventured into mutual funds. Through the monthly magazine, the U.S. Consumer Union provides consumers with information intended to protect them--from alternative medicines to zippers.

Another important Web site for consumers is the U.S. Federal Trade Commission (www.ftc.gov). With all its attorneys and investigators, this government agency is one of the most powerful consumer protectors in the U.S.

You can send complaints to them, and if they see a pattern of deception or fraud occurring, they will take the necessary legal action against the actors. FTC helps people if they have problems with consumer fraud, misleading advertisements, credit card disputes and other consumer protection matters. If you want to know more about MLM (multi-level marketing), you should visit the FTC site.

Still another Web site that I strongly recommend is the Better Business Bureaus (www.bbb.or), which is a private, non-profit organization. Consumers can check with the BBB about the status and legitimacy of businesses before they buy products from them.

BBB will also help settle disputes should you as the consumer ever feel deceived. This organization is also actively involved in promoting ethics in business practices. In general, members of BBB are firms that you can trust. There are also many articles that you can peruse, including "Be an educated consumer: Know the danger signals of scams."

And, I think, that's the first article you should read after this one and after paying tribute to those folks who have brought us the Internet. (zatni@cbn.net.id)