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Net Law Roundup #13

by Jeremy Malcolm, Internet lawyer

A decade ago, the Internet was described by science fiction writer Bruce Sterling as "a true, modern, functional anarchy". Since then, we have discovered that, although the anarchy of the Internet may give us more freedom than we have in the real world, it also gives us less protection against the antisocial elements of our online society. This has been one of the motivators behind increased regulation of the Internet that many national governments, including Australia's, have undertaken in the last few years.

As a result, although you can still easily get caught by online scams, there are things you can do to protect yourself, and some places to turn when things go wrong. Classic examples of on-line scams include:

  • the "advance fee" or "Nigerian" fraud, in which you are invited to allow millions of dollars to be deposited to your bank account - only to be asked to pay various fees to the scammers before the money will supposedly be transferred;
  • auctions that never deliver or deliver sub-standard goods, and unreputable on-line casinos, that offer grossly unfair odds or no odds of winning at all;
  • work-at-home schemes, that either require you to buy an expensive selling kit that never pays off, or are multi-level marketing (pyramid) schemes, in which the products you distribute can only be sold to other distributors;
  • unlicensed share or investment offers that promise huge returns that they never deliver;
  • offers of miracle health cures that may be illegal or dangerous, or that falsely claim to enlarge certain parts of the anatomy!

In Australia, you can report on-line financial scams such as share offers and investment schemes to the Australian Securities and Investments Commission (ASIC), and other scams to your local Department of Consumer Protection or equivalent body.You can also protect yourself by only dealing with well-recognised and licensed vendors, auction houses and casinos.

Before dealing on-line with a company that you haven't heard from, ask around in a newsgroup or discussion forum to see what other people's experiences with the company have been. Also, pay for on-line transactions using a credit card with a low credit limit. If you are cheated, you may be able to get the credit card company to reverse the transaction.

Please Note: The information contained in this article is general in nature and cannot be regarded as anything more than general comment. Readers of this article should not act on the basis of this comment without consulting one of iLaw’s legal practitioners who will consider their particular circumstances