Practical Ecommerce

Anatomy of an online scam

Have you ever been scammed in a business venture? I’ve become a victim of one. What happened to me is typical, I suspect, of online scams.

1. The Scammers Seem Legitimate

Online scams typically involve products or services that help you save money, time, effort, or raise your business profile in some way. You may be connected to the scammers through LinkedIn, via your industry organization, or as an existing customer.

The Perth, Australia-based woman who scammed me has been a repeat customer of my business since 2009.

In August 2013, I responded to her anonymous callout on SourceBottle.com.au, a free Australian online service that connects journalists with sources, for specialists to contribute a chapter to a book she was compiling.

When she responded, I was delighted to be working with her. She said she would charge me $1,199 to include my chapter and that she would supply 100 books to sell to my customers, to which I agreed.

2. They Live Far Away

It’s hard to do anything about scammers when they’re based in another state or overseas. State laws differ, time zones apply, and you can’t easily visit their physical address.

She’s in Perth and I’m in Melbourne. The distance is about the same as Miami is from Los Angeles. I did not have to travel to Perth. All I had to do was pay and submit my chapter online.

3. They Use Impressive Claims to Support their Scams

In her proposal, she included a website link to her 23 current “experts,” showcasing such famous worldwide names as Dr. John Gray (of Men Are From Mars, Women Are From Venus fame), Dr. Gabrielle Morrissey, and Dr. Ava Cadell, among others.

Since small online retailers benefit enormously from being involved in a project with high-profile figures, it didn’t take me long to agree to take part. Some of that stardust could rub off on me, I thought.

4. They Give You a Short Deadline

A sense of urgency and a fear of missing out are common in most online marketing to encourage purchase. Scammers also use this to stop you from having the time to do your proper homework.

I had less than 14 days to pay the fee, write, edit, and submit my chapter. I had no time to waste for this “golden opportunity.”

5. They Use Unusual Payment Vehicles

Scammers may use payment types (or timeframes) that prevent chargebacks.

She sent me a PayPal invoice to be paid to her personal (free) email address. I noticed I couldn’t pay via credit card (which would allow chargebacks) and she didn’t have a company PayPal account (as most businesses do).

PayPal allows chargebacks up to 45 days after purchase. Since the book wasn’t due to be published until January (I paid the money in August), this went well over PayPal’s deadline.

6. They Send Little Information after Receiving Payment

After scammers get your money, you typically don’t much hear from them again. My phone calls went to her voice mail. She didn’t respond to my emails — to all three of her addresses that she’s been using since 2009 — for three months.

In December she finally emailed, “Random house[sic] have approved all our chapters so congratulations for putting forward such awesome work! … in Jan[sic] the book will be finalized, edited and proofread for your final reviews.”

When I responded that my husband had been worried the book deal was a scam, she didn’t respond.

Last month I sent her an invoice requesting a full refund from the aborted book deal and heard nothing. A legitimate company would have responded very quickly about this.

7. They Can be Undone by Simple Homework

In late January, I called Random House, which confirmed the book wasn’t being printed by any of their publishing houses. If I had asked her to provide publishing details at the start and then checked this myself, I might have avoided this problem.

I also should have contacted the listed co-authors to confirm they were taking part in the book. I have finally done so this week. Of the 23 listed, 11 people (including Dr. John Gray) have confirmed they are not and further, they’re shocked at being misrepresented.

8. Scammers Abuse your Trust Constantly

In her email last week (her first for 2014), she said how she wants to meet me and go through everything that’s been happening.

I said I wasn’t interested, I wanted my money back and that Random House was not publishing the book at all, so the book was a fraud.

She responded it was Xlibris, an imprint of Random House. Thanks to the wonders of instant online search, Wikipedia revealed Random House sold its share in Xlibris in 2009 and it was now a self-publisher, which means you can print anything as long as you pay for it.

She didn’t respond to that.

9. Chalk It Up to Experience

Scammers usually charge low-enough amounts that the police, departments of commerce, business organizations, and debt collectors aren’t interested. And, moreover, you would lose more money taking them to court.

I’ve experienced small comfort in creating awareness about this on social media. But the scales have fallen from my eyes.


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Comments ( 9 )

  1. Anonymous March 26, 2014 Reply

    I was a speaker at their online event with people like Dr John Gray. I bought a chapter of the book because I believed it would help my career. There sounded nothing unusually about being a part of an online program and tuning the content into a book.

    I invested the money and have heard nothing back, even though I have emailed several times.

    Unfortunately when I realised it wasn’t happening, paypal will not refund the money as its past the 45 days.

    I would hate to be Dr John Gray, Gabrielle Morrissey, and Dr. Ava Cadell, among other because their name is being used to leverage money off people which isn’t right.

    Maybe if we all rally together we can make her refund all our money.

  2. Elizabeth Ball March 27, 2014 Reply

    I hope so, Anonymous! I still cannot believe she could be so stupid as to commit such fraud against such high-profile figures.

  3. Anon March 27, 2014 Reply

    I was a part of the program and the book deal was offered to me but I couldn’t afford it at the time and now I’m glad I couldn’t or else I would be in the same boat…

    There was no reason for me to think I was being scammed, as far as I knew, all those big names were part of the video program but am starting to wonder how much they were actually involved…

    I asked questions about my access to the video program as my account seemed to disappear so I couldn’t access it and never got any response from the admin team nor the organisers. My webinar was an hour long instead of 2 hours and I didn’t seem to get any questions from an audience I was told was there… Nor a link to the recording afterwards etc…

    It’s such a shame… I feel for those who got scammed and hope justice prevails.

  4. Dr Kat Smith March 27, 2014 Reply

    Great advice. Thanks for enlightening us so that we can make educated decisions.

  5. Chuck and Jo-Ann Bird March 27, 2014 Reply

    We were also speakers with her online event. We purchased a chapter in the book as well for the same reason as Anonymous. We have repeatedly contacted them with no response. She seems to be in the media quite often, thus you would think she would not want something like this affecting her reputation. Let’s rally together and definitely get our money back!!

  6. Elizabeth Ball March 27, 2014 Reply

    Scammers often use excuses to make you feel guilty. One of her excuses is that she has been ill with cervical cancer. Well my mother, who had one-quarter of of her bowel removed due to cancer in November,and has been undergoing chemotherapy for the last four months, has still been able to pick up a phone as well as email me so there’s no excuse for cheating people. This particular woman has also started two new businesses in the same time…

  7. Richard Keeves April 11, 2014 Reply

    Hi Elizabeth,
    thanks for sharing your story about being scammed. I was saddened to read it.

    I live in Perth, and I was scammed more than 25 years ago in Perth by a really good (actually really bad) con man from Sydney. He ripped a lot of people off – and the ABC TV “Investigators” program wanted to do a story on it. I declined to go on TV to admit my stupidity – mainly because there was little to gain, and partly in truth, because I would have had to publicly admit to being conned easily because I was naive and foolishly trusting – and yes, foolishly greedy.

    It takes guts to admit it publicly like you have. Congratulations on that.

    Now, as I said, I live in Perth. I’d love to know the name of the person who conned you. Please feel free to contact me privately if you wish.

    I don’t think you fell for this because you were foolish, naive, stupid or greedy. And you did not fall for it because it was a bad business idea. You were scammed because the seller obviously set out to lie and deceive you. There are laws against that, and you probably have some legal avenues open to you. PayPal would probably not like to think it was beng used in that way, so I would not give up on taking it further with PayPal. There are many nice humans working for PayPal in Australia. I know some of them, so maybe I can pass details on to you.

    What I have learnt about con-men over the years is that they rely on people like you and me just giving up on the problem. We think it’s better to just put it behind us and move on. We don’t want to put more time and energy into pursuing it – and we generally don’t want to put good money after bad to spend on lawyers, etc. Us NOT following things up and not exposing them publicly is what allows them to do again.

    Anyway, thanks again for sharing your story.
    If you need a friend in Perth, just let me know. Most of us here are good guys.

    All the best moving forward

    Cheers
    Richard Keeves
    @RichardKeeves
    (Past President of the WA Internet Association 2004-2008, 2012-2014)

  8. Elizabeth Ball April 11, 2014 Reply

    Thank you so much Richard for your comments, I will contact you.

  9. Elizabeth Ball July 17, 2014 Reply

    Update: I hired a debt collection agency which called her and sent letters of demand which she ignored, but as soon as she was hit with a court order, she has magically reimbursed the solicitor representing me in this scam case with the full amount. The nice chaps at http://www.profcoll.com.au are very efficient.

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