The Internet is fast becoming the new market place for conmen eager to persuade investors to sink their savings into bogus schemes, according to Britain's financial watchdog, the Financial Services Authority (FSA).

Along with the Bank of England, the FSA is issuing a warning on its Website against crooks who have gone online in order to defraud.

As well as hacking into large corporations, cyber-thieves are branching out and targeting domestic Internet users.

Nigel Morris-Cotterill, who advises top companies on how to avoid fraud, says Internet users should not believe everything they read on their screens. He identifies three main sorts of cyber-crime:

• pyramid selling
• confidence tricks like fake auctions
• investor crime, where fraudsters pretend to be someone they are not as a way of getting hold of your hard-earned cash

Mr Morris-Cotterill cites the recent example of the so-called European Union Bank set up in the Caribbean island of Antigua. It persuaded investors to inject money into it - and simply disappeared.

It is estimated that the "EU Bank" ran off with at least £4m ($6.7m).

Super-highwaymen can also get your money by using a fake identity to sell you a product that does not exist. They may then use your credit card details to strip your account.

Multilevel marketing is also prevalent on the Net. One Website offers cheap credit cards in return for recruiting more customers. It is known as pyramid selling and is illegal.

Buyer beware

The criminals are not having it all their own way. The FSA has an enforcement section dedicated to stamping out online fraud.

Martin Hollobone, an FSA investigator, has this advice: "What people need to do is to look at any addresses or telephone numbers that appear on the site and check up whether those are in fact the addresses or phone numbers of the people they appear to be."

The BBC's John Holdsworth reports that with about 100 million Internet account holders worldwide, the cyber conmen will win even if only a tiny minority of users take the bait. Although more anti-fraud measures are coming into force, the criminals may well be ahead of the game.
 

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