Top Ten Fraud-Prevention Resources!

 

Education is best way to fight scams

 

10 Fraud-Prevention Resources Becoming an entrepreneur can be a risky venture. It's often difficult to know who to trust. Even when you think you've done plenty of background research before entering into a business relationship with another company, you can still fall prey.


Today's scammers know exactly what they're doing. And they do it so smoothly that intelligent, careful entrepreneurs are still becoming victims of their clever ploys.


To help you avoid becoming the next scam victim, check out our list of online resources. Whether you're looking for VC funding or thinking of getting involved in a potential business venture, these 10 websites will help you distinguish between a scam and a legitimate business opportunity.


- Federal Trade Commission--The FTC website is a great place to start. You can use this website to check up on a company's current licensing status.

- You can also check your state attorney general's website for the latest fraud alerts and tips on detecting scams.

- Contact the office directly for any information they have on a specific company. Click here? for an index of attorney general sites by state.

- Better Business Bureau--With a simple search, you can find any public complaints filed against the company in question.

- The Ripoff Report- -People use this site to share personal stories about companies they believe took advantage of them. You can add your own experiences and learn from others.

- Scambusters.org- -This site specializes in internet scams and identity theft. Type in a single word or a combination of words common to the scam you're researching. But keep in mind that Scambusters.org doesn't list scams by company names since they change so frequently.

- Fraud.org--This is home of the National Consumers League's National Fraud Information Center and Internet Fraud Watch programs. Learn about the top 10 telemarketing and internet scams and share your fraud experiences on their online fraud center.

- Advice on Avoiding Tax Scams- -The IRS created this page to help the public recognize and avoid tax schemes. The site lists several common schemes and options for reporting tax scams.

- U.S. Patent and Trademark Office- -According to USPTO, invention promotion scams cost U.S. inventors hundreds of millions of dollars each year. Learn more about patenting your invention and how to protect your ideas. This site also has instructions on how to file a complaint.

- Entrepreneur.com? also offers plenty of scam-blocking advice, including this article?on spotting the tell-tale signs of a scam. For tips on determining if a homebased business opportunity is legitimate, don't miss "Determining if a Biz Opp is a Scam."   Lastly, we've compiled a list of business opportunities on the up-and-up in our Biz Opp zone.

How To Spot A Scam

The top 10 warning signs of a shady franchise or business opportunity

If you're in the market to buy a business, protect yourself by being on the lookout for these 10 warning signs of a franchise or business opportunity scam:

1. The Rented Rolls-Royce Syndrome. The overdressed, jewelry-laden sales representative works hard to impress you with an appearance of success. These people reek of money-and you hope, quite naturally, that it will rub off on you. (Motto: "Don't you want to be like me?") Antidote: Check the financial statements in the Uniform Franchise Offering Circular; they're required to be audited.

2. The Hustle. Giveaway sales pitches: "Territories are going fast!" "Act now or you'll be shut out!" "I'm leaving town on Monday afternoon, so make your decision now." They make you feel that you'd be a worthless, indecisive dreamer not to take immediate action. (Motto: "Wimps need not apply.") Antidote: Take your time, and recognize The Hustle for the crude closing technique that it is.

3. The Cash-Only Transaction. An obvious clue that companies are running their programs on the fly: They want cash so there's no way to trace them and so you can't stop payment if things crash and burn. (Motto: "In God we trust; all others pay cash.") Antidote: Insist on writing a check-made out to the company, not to an individual. Better yet, walk away.

4. The Boast. "Our dealers are pulling in six figures. We're not interested in small thinkers. If you think big, you can join the ranks of the really big money earners in our system. The sky's the limit." And this was in answer to your straightforward question about the names of purchasers in your area. (Motto: "We never met an exaggeration we didn't like.") Antidote: Write your own business plan and make it realistic. Don't try to be a big thinker-just a smart one.

5. The Big-Money Claim. Most state authorities point to exaggerated profit claims as the biggest problem in business opportunity and franchise sales. "Earn $10,000 a month in your spare time" sounds great, doesn't it? (Motto: "We can sling the zeros with the best of 'em.") If it's a franchise, any statement about earnings (regarding others in the system or your potential earnings) must appear in the Uniform Franchise Offering Circular. Antidote: Read the UFOC and find five franchise owners who have attained the earnings claimed.

6. The Couch Potato's Dream. "Make money in your spare time . . . This business can be operated on the phone while you're at the beach . . . Two hours a week earns $10,000 a month." (Motto: "Why not be lazy and rich?") Understand this and understand it now: The only easy money in a deal like this one will be made by the seller. Antidote: Get off the couch, and roll up your sleeves for some honest and rewarding work.

7. Location, Location, Location. Buyers are frequently disappointed by promises of services from third-party location hunters. "We'll place these pistachio dispensers in prime locations in your town." (Motto: "I've got 10 sweet locations that are going to make you rich. ") Turns out all the best locations are taken and the bar owners will not insure the machines against damage by their inebriated patrons. Next thing you know, your dining room table is loaded with pistachio dispensers-and your kids don't even like pistachios. Antidote: Get in the car, and check for available locations.

8. The Disclosure Dance. "Disclosure? Well, we're, uh, exempt from disclosure because we're, uh, not a public corporation. Yeah, that's it." (Motto: "Trust me, kid.") No business-format franchisor, with very rare exception, is exempt from delivering a disclosure document at your first serious sales meeting or at least 10 business days before the sales takes place. Antidote: "Disclosure: Don't let your money leave your pocket without it."

9. The Registration Ruse. You check out the franchisor with state authorities, and they respond, "Who?" (Motto: "Registration? We don't need no stinking registration!") Franchisors are required to register in 15 states; in Florida, Nebraska and Texas, franchisors may file for exemption. Antidote: If you are in a franchise registration state and the company is not registered, find out why. (Some companies are legitimately exempt.)

10. The Thinly Capitalized Franchisor. This franchisor dances lightly around the issue of its available capital. (Motto: "Don't you worry about all that bean-counter hocus-pocus. We don't.") Antidote: Take the UFOC to your accountant and learn what resources the franchisor has to back up its contractual obligations. If its capitalization is too thin or it has a negative net worth, it's not necessarily a scam, but the investment is riskier.

About AlgoZone Fraud Screen (AFS) Service for osCommerce

Credit card fraud is a problem that is faced by almost every online business.

Credit card fraud leads to chargeback and loss of merchandise or intangible goods that you cannot take back. In most cases, chargebacks cost online businesses aggravation and money in chargeback fees. Excessive chargebacks can lead to loss of your merchant account and being unable to open another one.


At AlgoZone we were faced with the problem of numerous fraudulent transactions that caused harm to our business. We have dedicated last two year to develop approaches and system to detect fraudulent orders and protect business without causing inconvenience for our customers. Now we would like to share our experience with other online business affected by fraudulent orders.


Avoid chargebacks by using AlgoZone’s Fraud Screen Service (AFS).

Monitor and detect all orders placed in your online store for credit card fraud or fraudulent payment in other payment systems. This service works by combining IP location metrics and identifying the geographic source of the charge with additional checks for known fraud risk factors such as free emails, use of proxies and other factors. AlgoZone Fraud Screen tools pin down potential fraud and identify associated risk factors, pointing you to the best strategy to verify the flagged transaction and prevent future fraud.


AlgoZone Fraud Screen includes:

-   Fraud risk level calculated
-   Geographical IP address location checking
-   Displaying City and Country location of the customer
-   Distance from IP address to customer’s address
-   ISP provider for the customer
-   Issuing Bank BIN Number country matching
-   Free e-mail, proxy detection
-   Phone number prefix location checking
-   Integrated osCommerce support

You can read How it works for more detailed information about Fraud Screen process.
The osCommerce AlgoZone Fraud Screen module is free of charge and available for download. You can review AFS free of charge without any obligations and get protected from fraud. We provide 100 free queries for you to try AlgoZone Fraud Screen module.

How it works?

1) Your web store Customer places an order and his/her IP address is recorded in addition to the standard information collected by osCommerce.

2) Once you go to admin -> order review (edit) screen to check the order details, AFS queries AlgoZone server database and gets result with Fraud Level and other information regarding this order.

The following information is passed to the AlgoZone servers and is used to calculate Fraud Level: IP address, Customer City, Customer ZIP, Customer Country, first 6 digits of credit card and domain(second part) of customer email address.

All information passed to our server is not customer’s specific and not shared with anyone.

Fraud level is calculated based on following parameters:

-  E-mail Domain E-mail provided at registration matches any of the free e-mail services, such as Hotmail, Yahoo, etc.
NOTE: Most of fraud transactions are

-  Carder E-mail Whether e-mail is in database of known carders (credit card fraudster).
Geographic Source Country of IP address associated with the transaction matches country specified in the billing address.
Anonymous Proxy IP address associated with the order is Anonymous Proxy.
NOTE: Most of fraud transactions are done with Anonymous Proxy. Open Proxy Check of IP Address being an Open Proxy.

-  Spam Check of IP Address being a Spam Source.
High Risk Country IP address or customers country is in high risk country list: Belarus, Colombia, Egypt, Indonesia, Lebanon, Macedonia, Nigeria, Pakistan, Ukraine, Vietnam or Yugoslavia
Distance Approximated distance between the IP address location and billing location.
NOTE: Very long distances are potential risk of fraud

-  BIN Number Match Country of issuing bank matches country of IP address based on BIN number.
NOTE: Works only for credit card payments.

3) You make a decision on the Fraud Level and parameters how to proceed with the order.

4) For additional confirmation, you can request the customer service phone number provided on the back of the card along with the Bank issuer of the card from your customer.

This information can then be verified against the AlgoZone Fraud Screen database to see if it matches the information we have on record for the BIN.

This provides an additional layer of protection by verifying that the user has physical possession of the credit card.

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