Types of Online Scams

There are a series of online scams that have been taking place in the recent years. The culprits are becoming more sophisticated as they’re coming up with new schemes. The law enforcement agencies have been trying to keep up with the new schemes. However, given their limited resources, it is a challenging task. Nonetheless, our law firm has been representing clients in state and federal courts who have been victims of online scams.

Online auction scams have become prevalent on the internet. For example, the scammer gets involved in the online auction and purchases the item by overpaying for it via an international money order. Then, the seller who is eager to sell the item to the buyer in good faith, sends the item along with the overpayment. So, at the end, the seller loses the item and the funds.

Online rental and real estate scams involve the same type of practice where the scammer poses as the interested renter or buyer and sends the funds towards the seller or landlord. Then, the scammer reneges on the deal and requests a refund. The seller or landlord returns the funds but later realizes the initial check was counterfeit.

Online dating scams are becoming a typical scheme on the internet especially since online dating is socially acceptable. The dating website constitutes a forum where the users create their profiles and interact with each other. They share pictures and videos with each other. For example, in some cases, the culprit creates a fake profile and initiates the communications with the victim. Then, the culprit informs the victim that he or she will be traveling and may not be available for a short duration. At some point, the culprit informs the victim that he/she is in dire straits and needs immediate financial assistance – e.g., he’s been detained, hospitalized, or cannot pay hotel bills. So, naturally, the victim who has probably established an emotional bond with the culprit, transfers the funds but never hears back.

Online lottery scams are another example of fraudulent or deceitful activities. In that case, the culprit fraudulently claims that the victim has won a prize and must receive the victim’s bank account information. The culprit may ask the victim to pay an upfront fee to obtain the prize. So, once the victim has supplied the requested information, the culprit will take the upfront fee and won’t respond anymore. Nonetheless, the victim may not report the violation to local authorities since participation in a foreign lottery is a legal violation. So, in other words, the victim is left without a solution.

There are other types of scams such as charity scams, government email scams, Nigerian scams (a/k/a “419 scam” which is named after the Nigerian criminal statute), work-at-home scams, and virus protection scams. These scams are considered as fraudulent or deceitful actions which can be prosecuted in the proper jurisdiction. Fraud, misrepresentation, or deceit are examples of the causes of action in which the victim claims he or she was defrauded by the culprit and should be compensated for his or her loss. Please refer to https://www.fbi.gov/scams-and-safety/common-scams-and-crimes for more information.

The elements of fraud, which give rise to the tort action for deceit, are as follows: (a) misrepresentation (e.g., false representation, concealment, nondisclosure); (b) knowledge of falsity or scienter; (c) intent to defraud – i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage. See Lazar v. Superior Court (1996) 12 Cal.4th 631, 638. So, the plaintiff must show that he or she changed position in reliance upon the alleged fraud and was damaged by that change of position. See Civil Code § 1709. For example, evidence that plaintiff quit his job and moved across the country in reliance on defendant’s misrepresentations can be sufficient to demonstrate a detrimental change of position.

In addition, in some cases, the victim is subjected to identity theft when the culprit obtains personal and financial information. For example, if the victim shares his or her confidential information, then the culprit may gain access to the victim’s financial institution and siphon the funds without authorization. Therefore, most jurisdictions have passed laws to address identity theft. In California, Civil Code 1798.93 provides as follows:

(a) A person may bring an action against a claimant to establish that the person is a victim of identity theft in connection with the claimant’s claim against that person. If the claimant has brought an action to recover on its claim against the person, the person may file a cross-complaint to establish that the person is a victim of identity theft in connection with the claimant’s claim.

(b) A person shall establish that he or she is a victim of identity theft by a preponderance of the evidence.

(c) A person who proves that he or she is a victim of identity theft, as defined in Section 530.5 of the Penal Code, as to a particular claim, shall be entitled to a judgment providing all of the following, as appropriate:

(1) A declaration that he or she is not obligated to the claimant on that claim.

(2) A declaration that any security interest or other interest the claimant had purportedly obtained in the victim’s property in connection with that claim is void and unenforceable.

(3) An injunction restraining the claimant from collecting or attempting to collect from the victim on that claim, from enforcing or attempting to enforce any security interest or other interest in the victim’s property in connection with that claim, or from enforcing or executing on any judgment against the victim on that claim.

(4) If the victim has filed a cross-complaint against the claimant, the dismissal of any cause of action in the complaint filed by the claimant based on a claim which arose as a result of the identity theft.

(5) Actual damages, attorney’s fees, and costs, and any equitable relief that the court deems appropriate. In order to recover actual damages or attorney’s fees in an action or cross-complaint filed by a person alleging that he or she is a victim of identity theft, the person shall show that he or she provided written notice to the claimant that a situation of identity theft might exist, including, upon written request of the claimant, a valid copy of the police report or the Department of Motor Vehicles investigative report promptly filed pursuant to Section 530.5 of the Penal Code at least 30 days prior to his or her filing of the action, or within his or her cross-complaint pursuant to this section.

(6) A civil penalty, in addition to any other damages, of up to thirty thousand dollars ($30,000) if the victim establishes by clear and convincing evidence all of the following:

(A) That at least 30 days prior to filing an action or within the cross-complaint pursuant to this section, he or she provided written notice to the claimant at the address designated by the claimant for complaints related to credit reporting issues that a situation of identity theft might exist and explaining the basis for that belief.

(B) That the claimant failed to diligently investigate the victim’s notification of a possible identity theft.

(C) That the claimant continued to pursue its claim against the victim after the claimant was presented with facts that were later held to entitle the victim to a judgment pursuant to this section.

Our internet and technology lawyers have been prosecuting and defending legal actions in state and federal courts and are available to speak with their clients. Our law firm assists clients in matters related to privacy and cybersecurity and the applicable state, federal, and international laws. Please contact our law firm to speak with an internet attorney at your earliest convenience.