Consumer Information
This information is a guide which deals very broadly with some of the information that consumers should be aware of when trading online. It is not a substitute for legal advice. 

Shopping in cyberspace 

If you're online, the world is your shopping centre. Businesses all over the world are offering their wares online. You may like the convenience of making your selections without having to leave home or the opportunity to shop around for better prices in a world market rather than just your local one. Whatever your reason for using your mouse rather than leaving your house, it's good to be aware of a few things before sending your money or your personal information over the Internet. 

Protect yourself: 

Use the ACCC online shopping checklist before committing to an on-line purchase 
For information about financial services such as investments, insurance and superannuation, go to http://www.watchdog.asic.gov.au 
Find out what law applies, as this may affect your ability to gain redress if problems arise. 
NOIE and Treasury have produced some fact sheets on Internet shopping which provide advice to consumers who want to shop online. The fact sheets can be found at http://www.dcita.gov.au/shoponline 
You may also want to use the ACCC online checklist. This lists a number of questions that you should ask yourself before committing to an online purchase. 

You should also be aware that if you are trading with a business in another country the transaction may be subject to laws other than Australia's. It's a good idea to identify any statements as to applicable law on the web site. If the law which is being applied is not Australia's, you may not have the benefit of a number of rights which exist in Australia's legislation. 

Seals of approval/codes of conduct 

Many web sites display 'seals' or 'badges' of approval indicating that the site has been approved by an independent organisation. Similarly, some web sites display symbols that indicate they are a member of an industry code of conduct. The aim of the seals is usually to help Web users identify trustworthy online businesses. They usually indicate that the site has been assessed against certain criteria developed by the independent organisation. Seals can be a good indicator that you're dealing with a business which cares about providing a good, reliable service. 

Protect yourself: 

Check the business has the right to display the seal of approval. 
Check you know what the seal stands for. 
Consumers shouldn't rely on the mere presence of one of these logos when deciding whether or not they should buy from a web business. Always go to the seal/code of conduct web site and verify that the business is actually a member (usually there will be a link from the businesses web site). 
Perhaps more importantly, check what the seal actually means. Some seals check out web businesses against only one criteria, such as privacy. If you're particularly concerned about refund policies, there's no point relying on a seal which only examines the site's privacy policies. 

Your right to a refund 

The Trade Practices Act gives warranty and refund rights to consumers which businesses are legally obliged to honour. These warranties cannot be excluded from contracts for the sale of goods or services. 

Consumers may be entitled to compensation if goods they purchase do not meet the following tests: 

merchantable quality (ie a basic level of quality that would be reasonable to expect). 
fit for any purpose you made known to the supplier. 
match any description given of the goods (this would include corresponding with a photograph of the good). 
free from defects. 
In the case of services, they should be rendered with due care and skill and be reasonably fit to achieve the purpose specified. 
If the product that you purchase does not meet these standards, you are entitled to compensation – a refund, repair or replacement, depending on what is reasonable in the circumstances. 

Protect yourself: 

Always identify refund and warranty policies on the web site. 
If in doubt, ask the business about its practices. 
Make sure you know if you are dealing with an overseas trader. 
The statutory warranties set out the minimum obligations of sellers when it comes to warranties and refunds, however many businesses have their own policies which go above and beyond these statutory obligations. It is a good idea to search the web site for these policies so you know what your rights will be in the event that something goes wrong. For more information about warranties and refunds, see the ACCC's publication Warranties and Refunds. 
When buying from an overseas web site, you need to be particularly careful about identifying the site's warranty and refund policies, as well as looking for any statements as to what law will apply to your transaction. If the applicable law is that of another country, you may not be covered by any statutory warranties. Even if Australia's law is the appropriate law for your transaction, it is a lot more difficult to receive compensation from an overseas trader than it is from an Australian business. 

Internet auctions 

Internet auctions are popular with people looking for bargains, obscure items and collectibles. They can provide some good opportunities, however it's important to remember when you buy something via an Internet auction, you're not buying from the auction house (eBay, Yahoo etc) but from an individual or company who may or may not be an honest, reputable dealer. 

The auction houses are simply providing a forum to enable individuals to trade with one another. They usually adopt policies of not taking any legal responsibility for any loss you may suffer using their services. 

Once the bidding is over, the payment for and delivery of your purchase is something to be worked out between you and the seller. If the item doesn't turn up after you've paid for it, or if it isn't what you thought you were buying then the auction house will not refund your money. You need to go back to the seller and negotiate. 

The statutory warranties which exist under the Trade Practices Act do not cover goods bought at auction. The seller's only obligation is to give clear title. 

Protect yourself: 

Verify identity. 
Check the seller's 'form'. 
Use an agent. 
Before you hand your money over, you should verify the seller's identity and contact details and make arrangements in case there's a problem. Many auction houses have feedback forums where you can find out about the previous conduct of a seller who has traded with the auction house before. It is a good idea to use this facility to check out the seller before agreeing to pay any money. 
You can also consider using an escrow agent. An escrow service is an independent third party which holds payment in trust until the buyer receives and accepts the agreed upon item from the seller. 

This service comes at a fee, however it protects buyers because they don't have to pay until the goods have been received and inspected 

Cyberscams 

To legitimate traders, the Internet is a tool through which they can sell their wares to the world. However, to some unscrupulous operators, the Internet offers a different kind of opportunity – it's a medium where they can easily hide their true identity, reach a large audience with minimal expense, create an impressive image through a well designed front page and with a few keystrokes, 'disappear' quickly and without a trace. 

These characteristics make the Internet very attractive to those marketing illegal schemes and scams. These include get rich quick schemes, miracle health products and phoney lotteries. 

Treat any e-mail or Internet invitation to send money away the same as you would any other online purchase – use the ACCC online checklist to help you assess the risks. 

Misleading or deceptive conduct, or conduct which is likely to mislead or deceive is likely to contravene section 52 of the Trade Practices Act. Contact the ACCC if you think that you have been the subject of this sort of conduct. 

Spotting cyberscams 

There are some common general characteristics often taken on by e-mail and Internet scams: 

Promises of instant wealth – incredible returns offered for minimal work. If it sounds too good to be true, it probably is. 
Up front payments – be wary of any scheme where you have to pay an initial fee before you receive full information about the way it operates or to be eligible for further entitlements such as prizes or gifts or start up kits. 
Pay for a secret – a common scam which offers a secret money-making method used by many successful and wealthy business people, but only if you pay a fee first. 
CAPITAL LETTERS – scams often use capital letters to emphasise their more extreme claims eg MAKE A MILLION DOLLARS BY WORKING FROM HOME!!!!!! 
Testimonials – scams often have glowing comments from participants claiming to have made their fortune from participating the scam. Anyone can write these comments and there's usually no way to check their claims. Don't treat these as substantiation of claims made by the scheme. 
Something for nothing – if the site or e-mail promises money or prizes in return for your personal information, it is probably a scam designed to collect your valuable private details for online marketing activities. 
Protect yourself: 

Ask for substantiation of any claims including projected earnings. 
Make sure you get full contact details of anyone you are dealing with. 
Keep records of any communications you have. 
Get legal advice – if you participate in an unlawful scheme you could be breaching the law and subject to penalties under the Trade Practices Act. 
Don't make upfront payments without being certain about what you're getting for your money. 
Ask about how your personal information will be dealt with. 
Report cyberscams to your ACCC office or state Fair Trading Department. 
SPAM 
SPAM is unsolicited or junk e-mail. SPAM is a simple and low cost method many marketers are using to reach large numbers of consumers. SPAM of itself is not illegal in Australia, however SPAM is often used to promote schemes and scams which are illegal (such as those outlined below). You should be particularly suspicious if you can't identify the name of the person or company who has sent you the e-mail. 

Protect yourself: 

Don't give out your e-mail address without checking the privacy policies of the trader. 
Don't provide personal information to surveys or forms unless you are confident your information will be protected. 
Unfortunately there is no electronic equivalent of the 'no junk mail' sticker for your in-box, and some marketers simply take your angry response as confirmation that your e-mail address is accurate and current. 
SPAMers often buy mail lists from people who have harvested addresses from web sites or news groups. Before you send e-mail to a web site, check for the site's privacy policy. 

Look out for sites offering prizes in return for your filling in surveys or forms or providing personal information. It may simply be a ruse to get you to provide your e-mail address and your interests for use by online marketers. 

If you provide this sort of information to a business which 'sells' e-mail addresses to online marketers, you could find a lot of strange and anonymous e-mail clogging up your in-box. 

Pyramid / Referral selling, Multi Level Marketing 

These schemes claim to make you rich through the primary activity of recruiting other people into the scheme and rewarding you for introducing those new members. 

Under the Trade Practices Act, it is illegal to promote or participate in pyramid and referral selling schemes. 

These schemes often claim to be legitimate direct selling activities. Direct selling schemes, including multi-level marketing schemes, recruit participants for the purpose of selling products and any rewards come directly from those product sales. 

On the other hand, pyramid selling schemes usually induce people to subscribe by promising that they will receive payments for introducing further participants either directly or through others. Saturation point is generally very quickly reached and later recruits have little chance of recovering their money. 

Sometimes the scheme is run in conjunction with a product or service – for example, an Internet Service Provider may offer to give you discounts on your Internet access for every member you recruit and members that they, in turn, recruit. 

These schemes are common on the Internet. Sometimes you will see them on web sites, but more common is their circulation via e-mail, particularly unsolicited e-mail (SPAM). 

The e-mails often run for a number of pages, introducing the 'opportunity' by talking about huge possible earnings, emphasising the ease with which the money can be made by working from home etc. They often have a number of 'testimonials' –comments from people supposedly made rich by their participation in the scheme. 

They often don't get down to the actual method of making money until right at the end, or require you to telephone or send away for more information where the mechanics of the scheme are outlined. 

Look out for statements like: 

'This is not illegal. It is a legal multilevel marketing program.' 
'Your recruits do the work for you, you just sit back and bank the money.' 
'Join this interactive investment club full of MLMers and other entrepeneurs, just like you.' 
'Become part of the world's fastest growing industry 'Network Marketing'.' 
'Gain financial independence in just three months through our multilevel compensation plan.' 
'You and your friends can enjoy wealth together.' 
Protect yourself: 

Ask for substantiation of projected earnings. 
Get legal advice. 
Don't make upfront payments. 
Don't send cash through the mail. 
Competitions and lotteries 
These schemes claim to be offering you the 'winning ticket' in a lottery or competition, but only if you first pay a fee or send your credit card information. These scams often take the form of lotteries that require the winner to travel overseas or purchase some other substantial goods or services before they can collect their tickets. 

The Trade Practices Act makes it illegal to: 

make claims about prizes of lotteries which are false, misleading and/or deceptive; 
offer gifts or prizes with the intention of not providing them, or of not providing them as offered; 
provide a price for entry in a lottery which is not the full cash price. 
Beware of claims like: 
'You have won a holiday in Vanuatu, simply pay your administration fee of $15 to collect tickets to a tropical paradise!!!' 
'Just send $25 for government taxes and the prize is yours.' 
'Reverse the odds - join our lottery syndicate and share in the winnings from the biggest lotteries in the world - GUARANTEED!!!' 
'Congratulations - YOU HAVE WON - simply provide suitable identification to collect (credit card number from a recognised bank is preferred).' 
Protect yourself: 

Ask for details about how the lottery is administered. 
Ask for evidence that the prize or gift is worth what the claims say or imply. 
Ask about all the steps you need to take and the total payments required before you can claim your prize or gift. 
Don't provide your credit card details. 
Ask where the company running the competition is located. 
Virtual health 'treatments' 
Be wary of unscrupulous marketers who use cyberspace to peddle 'miracle' treatments and cures to vulnerable consumers. Many of the ads, which feature exotic potions and pills, special curative diets, or newly discovered treatments, contain questionable claims about the effectiveness and safety of these products or services. 

Misleading offers could be costly in several ways: consumers could lose their money and increase their health risk, especially if they delay or forgo proper medical treatment. The ACCC advises consumers to consult their doctor, pharmacist, other healthcare professional, or public health organisations before purchasing any product or treatment 

Look out for phrases like 'scientific breakthrough', 'miraculous cure', 'exclusive product', 'secret formula', and 'ancient ingredient' and testimonials from 'famous' medical experts. 

Beware of claims like: 

'Lose 20 kilos in 2 weeks' 
'This groundbreaking scientific breakthrough has provided relief to millions around the world' 
'Our secret formula is based on ancient ingredients which produce amazing instant results'. 
Protect yourself: 

Ask for scientific proof that the product works – testimonials do not amount to scientific proof. 
Before you purchase you should consult your pharmacist, doctor, or other health professional. 
Ask about the seller's medical knowledge/expertise/qualifications. 
Home work schemes 
These schemes offer consumers the opportunity to make large amounts of money quickly and with almost no effort. 

Often they involve working from home using your PC. These schemes sometimes take the form of email processing – the Internet version of envelope stuffing where consumers are paid to send letters or reports to large numbers of other consumers. They can also involve scheme selling — where consumers are given a lot of information about how much money a scheme will make them and asked to buy a booklet or information page which will tell them how to do it. (In many cases, the scam operator's so-called 'information page' simply tells the victims to use the same scam on other consumers). 

Usually they ask you to pay a registration or set up fee before they provide you with the basics to set up the business. 

The most common concerns about these ventures are that they often dramatically overstate the achievable earnings and commonly they are vehicles to sell large numbers of low quality or worthless products to consumers who are then unable to on-sell them. 

The Trade Practices Act makes it illegal to: 

make false, misleading or deceptive claims about business opportunities, including predictions of future earnings; 
offer a price for goods or services which is not the full price that consumers have to pay; 
send invoices for goods or services that have not been authorised. 
Beware of claims like: 
'Earn thousands of dollars a month working at home using your PC.' 
'The next step is to purchase a comprehensive information package for $99.' 
'A few years ago I believe that I really had to work hard to make money…but then I discovered a revolutionary method of making money by being my own boss…' 
Protect yourself: 

Ask for proof that the project earnings are reasonable. 
Don't make upfront payments for starter kits or information packages. 
Get legal advice before you invest. 
Getting online – what to watch for 
There are many places to go to buy the equipment you need to get online and sign up with an Internet Service Provider. This can be a bewildering world to people who haven't owned a PC before or who have never surfed the web. There are a few things to watch for when making these decisions. 

Free PC with Internet access 

There have been a number of recent offers of Free PCs bundled with Internet access. The deals generally offer a PC for a small upfront cost, or no cost. These offers usually involve consumers entering into a contract for Internet access with a pre-determined ISP which they can be locked in to for lengthy periods. The monthly costs of the Internet access are bundled with the repayment for the PC and a credit charge. 

It is important that consumers looking at taking advantage of these offers carefully compare the packages with the cost of purchasing a PC and Internet access independently. Consumers need to be aware of the full extent of the financial obligations they will owe under the contract and need to check that the interest rates which apply. 

Protect yourself: 

Get answers to the following questions before purchasing a computer as a part of a bundled Internet access/credit package: 

How does the price of the package compare to the total price for the separate components (including buying different components from different suppliers)? 
If interest is charged, how does the rate compare to other forms of credit over the term of the contract ('interest free' periods often get made up later)? 
How much of the monthly charge is for Internet access and how much is repayment of the PC? 
How do the features of the PC compare with other PCs? What is the processor? How much storage capacity does it have? How fast is the modem? What software is included? Is a printer or other peripheral included? 
What support services are provided for the PC and the Internet access? 
How much 'unlimited' Internet access will you realistically use? Many Internet service providers offer free trial periods for the first month. 
Are there any limitations on the Internet service – is it available in your local call area, at all times? How reliable is the Internet service provider's connection? 
Are there charges for exiting the Internet contract early? 
Does the contract let the Internet service provider change the access charge during the life of the contract? 
What if you change your mind – is there a 'cooling off' period or can you get a refund? 
What happens if the Internet service provider goes out of business? 
Free Internet Access 
Some ISPs offer Internet access for free. Some of these offers are genuine, but usually rely on you either viewing their advertising or recruiting new members to the ISP as a condition of the 'free' surfing. This can be a great opportunity to introduce you or your family to the Internet, but there are a few pitfalls to look out for. 

Protect yourself 

Make sure any offer that involves signing up new members isn't a pyramid or referral selling scam (see above). 
Find out whether you will have to view certain advertising to take up the free offer and ask about the effect this will have on your browsing activity. 
Check that the company has the infrastructure (bandwidth, server quality and dial in lines) to handle the number of clients it is likely to attract by offering free services. Ask the ISP what rights you will have in the event that the ISPs does not have sufficient lines into their servers you'll have difficulty getting connections. The servers might not be able to quickly process the number of received, causing delays or even resulting in the server crashing. Consumer Information
This information is a guide which deals very broadly with some of the information that consumers should be aware of when trading online. It is not a substitute for legal advice. 

Shopping in cyberspace 

If you're online, the world is your shopping centre. Businesses all over the world are offering their wares online. You may like the convenience of making your selections without having to leave home or the opportunity to shop around for better prices in a world market rather than just your local one. Whatever your reason for using your mouse rather than leaving your house, it's good to be aware of a few things before sending your money or your personal information over the Internet. 

Protect yourself: 

Read the Internet shopping factsheets at http://www.dcita.gov.au/shoponline 
Use the ACCC online shopping checklist before committing to an on-line purchase 
For information about financial services such as investments, insurance and superannuation, go to http://www.watchdog.asic.gov.au 
Find out what law applies, as this may affect your ability to gain redress if problems arise. 
NOIE and Treasury have produced some fact sheets on Internet shopping which provide advice to consumers who want to shop online. The fact sheets can be found at http://www.dcita.gov.au/shoponline/. 
You may also want to use the ACCC online checklist. This lists a number of questions that you should ask yourself before committing to an online purchase. 

You should also be aware that if you are trading with a business in another country the transaction may be subject to laws other than Australia's. It's a good idea to identify any statements as to applicable law on the web site. If the law which is being applied is not Australia's, you may not have the benefit of a number of rights which exist in Australia's legislation. 

Seals of approval/codes of conduct 

Many web sites display 'seals' or 'badges' of approval indicating that the site has been approved by an independent organisation. Similarly, some web sites display symbols that indicate they are a member of an industry code of conduct. The aim of the seals is usually to help Web users identify trustworthy online businesses. They usually indicate that the site has been assessed against certain criteria developed by the independent organisation. Seals can be a good indicator that you're dealing with a business which cares about providing a good, reliable service. 

Protect yourself: 

Check the business has the right to display the seal of approval. 
Check you know what the seal stands for. 
Consumers shouldn't rely on the mere presence of one of these logos when deciding whether or not they should buy from a web business. Always go to the seal/code of conduct web site and verify that the business is actually a member (usually there will be a link from the businesses web site). 
Perhaps more importantly, check what the seal actually means. Some seals check out web businesses against only one criteria, such as privacy. If you're particularly concerned about refund policies, there's no point relying on a seal which only examines the site's privacy policies. 

Your right to a refund 

The Trade Practices Act gives warranty and refund rights to consumers which businesses are legally obliged to honour. These warranties cannot be excluded from contracts for the sale of goods or services. 

Consumers may be entitled to compensation if goods they purchase do not meet the following tests: 

merchantable quality (ie a basic level of quality that would be reasonable to expect). 
fit for any purpose you made known to the supplier. 
match any description given of the goods (this would include corresponding with a photograph of the good). 
free from defects. 
In the case of services, they should be rendered with due care and skill and be reasonably fit to achieve the purpose specified. 
If the product that you purchase does not meet these standards, you are entitled to compensation – a refund, repair or replacement, depending on what is reasonable in the circumstances. 

Protect yourself: 

Always identify refund and warranty policies on the web site. 
If in doubt, ask the business about its practices. 
Make sure you know if you are dealing with an overseas trader. 
The statutory warranties set out the minimum obligations of sellers when it comes to warranties and refunds, however many businesses have their own policies which go above and beyond these statutory obligations. It is a good idea to search the web site for these policies so you know what your rights will be in the event that something goes wrong. For more information about warranties and refunds, see the ACCC's publication Warranties and Refunds. 
When buying from an overseas web site, you need to be particularly careful about identifying the site's warranty and refund policies, as well as looking for any statements as to what law will apply to your transaction. If the applicable law is that of another country, you may not be covered by any statutory warranties. Even if Australia's law is the appropriate law for your transaction, it is a lot more difficult to receive compensation from an overseas trader than it is from an Australian business. 

Internet auctions 

Internet auctions are popular with people looking for bargains, obscure items and collectibles. They can provide some good opportunities, however it's important to remember when you buy something via an Internet auction, you're not buying from the auction house (eBay, Yahoo etc) but from an individual or company who may or may not be an honest, reputable dealer. 

The auction houses are simply providing a forum to enable individuals to trade with one another. They usually adopt policies of not taking any legal responsibility for any loss you may suffer using their services. 

Once the bidding is over, the payment for and delivery of your purchase is something to be worked out between you and the seller. If the item doesn't turn up after you've paid for it, or if it isn't what you thought you were buying then the auction house will not refund your money. You need to go back to the seller and negotiate. 

The statutory warranties which exist under the Trade Practices Act do not cover goods bought at auction. The seller's only obligation is to give clear title. 

Protect yourself: 

Verify identity. 
Check the seller's 'form'. 
Use an agent. 
Before you hand your money over, you should verify the seller's identity and contact details and make arrangements in case there's a problem. Many auction houses have feedback forums where you can find out about the previous conduct of a seller who has traded with the auction house before. It is a good idea to use this facility to check out the seller before agreeing to pay any money. 
You can also consider using an escrow agent. An escrow service is an independent third party which holds payment in trust until the buyer receives and accepts the agreed upon item from the seller. 

This service comes at a fee, however it protects buyers because they don't have to pay until the goods have been received and inspected 

Cyberscams 

To legitimate traders, the Internet is a tool through which they can sell their wares to the world. However, to some unscrupulous operators, the Internet offers a different kind of opportunity – it's a medium where they can easily hide their true identity, reach a large audience with minimal expense, create an impressive image through a well designed front page and with a few keystrokes, 'disappear' quickly and without a trace. 

These characteristics make the Internet very attractive to those marketing illegal schemes and scams. These include get rich quick schemes, miracle health products and phoney lotteries. 

Treat any e-mail or Internet invitation to send money away the same as you would any other online purchase – use the ACCC online checklist to help you assess the risks. 

Misleading or deceptive conduct, or conduct which is likely to mislead or deceive is likely to contravene section 52 of the Trade Practices Act. Contact the ACCC if you think that you have been the subject of this sort of conduct. 

Spotting cyberscams 

There are some common general characteristics often taken on by e-mail and Internet scams: 

Promises of instant wealth – incredible returns offered for minimal work. If it sounds too good to be true, it probably is. 
Up front payments – be wary of any scheme where you have to pay an initial fee before you receive full information about the way it operates or to be eligible for further entitlements such as prizes or gifts or start up kits. 
Pay for a secret – a common scam which offers a secret money-making method used by many successful and wealthy business people, but only if you pay a fee first. 
CAPITAL LETTERS – scams often use capital letters to emphasise their more extreme claims eg MAKE A MILLION DOLLARS BY WORKING FROM HOME!!!!!! 
Testimonials – scams often have glowing comments from participants claiming to have made their fortune from participating the scam. Anyone can write these comments and there's usually no way to check their claims. Don't treat these as substantiation of claims made by the scheme. 
Something for nothing – if the site or e-mail promises money or prizes in return for your personal information, it is probably a scam designed to collect your valuable private details for online marketing activities. 
Protect yourself: 

Ask for substantiation of any claims including projected earnings. 
Make sure you get full contact details of anyone you are dealing with. 
Keep records of any communications you have. 
Get legal advice – if you participate in an unlawful scheme you could be breaching the law and subject to penalties under the Trade Practices Act. 
Don't make upfront payments without being certain about what you're getting for your money. 
Ask about how your personal information will be dealt with. 
Report cyberscams to your ACCC office or state Fair Trading Department. 
SPAM 
SPAM is unsolicited or junk e-mail. SPAM is a simple and low cost method many marketers are using to reach large numbers of consumers. SPAM of itself is not illegal in Australia, however SPAM is often used to promote schemes and scams which are illegal (such as those outlined below). You should be particularly suspicious if you can't identify the name of the person or company who has sent you the e-mail. 

Protect yourself: 

Don't give out your e-mail address without checking the privacy policies of the trader. 
Don't provide personal information to surveys or forms unless you are confident your information will be protected. 
Unfortunately there is no electronic equivalent of the 'no junk mail' sticker for your in-box, and some marketers simply take your angry response as confirmation that your e-mail address is accurate and current. 
SPAMers often buy mail lists from people who have harvested addresses from web sites or news groups. Before you send e-mail to a web site, check for the site's privacy policy. 

Look out for sites offering prizes in return for your filling in surveys or forms or providing personal information. It may simply be a ruse to get you to provide your e-mail address and your interests for use by online marketers. 

If you provide this sort of information to a business which 'sells' e-mail addresses to online marketers, you could find a lot of strange and anonymous e-mail clogging up your in-box. 

Pyramid / Referral selling, Multi Level Marketing 

These schemes claim to make you rich through the primary activity of recruiting other people into the scheme and rewarding you for introducing those new members. 

Under the Trade Practices Act, it is illegal to promote or participate in pyramid and referral selling schemes. 

These schemes often claim to be legitimate direct selling activities. Direct selling schemes, including multi-level marketing schemes, recruit participants for the purpose of selling products and any rewards come directly from those product sales. 

On the other hand, pyramid selling schemes usually induce people to subscribe by promising that they will receive payments for introducing further participants either directly or through others. Saturation point is generally very quickly reached and later recruits have little chance of recovering their money. 

Sometimes the scheme is run in conjunction with a product or service – for example, an Internet Service Provider may offer to give you discounts on your Internet access for every member you recruit and members that they, in turn, recruit. 

These schemes are common on the Internet. Sometimes you will see them on web sites, but more common is their circulation via e-mail, particularly unsolicited e-mail (SPAM). 

The e-mails often run for a number of pages, introducing the 'opportunity' by talking about huge possible earnings, emphasising the ease with which the money can be made by working from home etc. They often have a number of 'testimonials' –comments from people supposedly made rich by their participation in the scheme. 

They often don't get down to the actual method of making money until right at the end, or require you to telephone or send away for more information where the mechanics of the scheme are outlined. 

Look out for statements like: 

'This is not illegal. It is a legal multilevel marketing program.' 
'Your recruits do the work for you, you just sit back and bank the money.' 
'Join this interactive investment club full of MLMers and other entrepeneurs, just like you.' 
'Become part of the world's fastest growing industry 'Network Marketing'.' 
'Gain financial independence in just three months through our multilevel compensation plan.' 
'You and your friends can enjoy wealth together.' 
Protect yourself: 

Ask for substantiation of projected earnings. 
Get legal advice. 
Don't make upfront payments. 
Don't send cash through the mail. 
Competitions and lotteries 
These schemes claim to be offering you the 'winning ticket' in a lottery or competition, but only if you first pay a fee or send your credit card information. These scams often take the form of lotteries that require the winner to travel overseas or purchase some other substantial goods or services before they can collect their tickets. 

The Trade Practices Act makes it illegal to: 

make claims about prizes of lotteries which are false, misleading and/or deceptive; 
offer gifts or prizes with the intention of not providing them, or of not providing them as offered; 
provide a price for entry in a lottery which is not the full cash price. 
Beware of claims like: 
'You have won a holiday in Vanuatu, simply pay your administration fee of $15 to collect tickets to a tropical paradise!!!' 
'Just send $25 for government taxes and the prize is yours.' 
'Reverse the odds - join our lottery syndicate and share in the winnings from the biggest lotteries in the world - GUARANTEED!!!' 
'Congratulations - YOU HAVE WON - simply provide suitable identification to collect (credit card number from a recognised bank is preferred).' 
Protect yourself: 

Ask for details about how the lottery is administered. 
Ask for evidence that the prize or gift is worth what the claims say or imply. 
Ask about all the steps you need to take and the total payments required before you can claim your prize or gift. 
Don't provide your credit card details. 
Ask where the company running the competition is located. 
Virtual health 'treatments' 
Be wary of unscrupulous marketers who use cyberspace to peddle 'miracle' treatments and cures to vulnerable consumers. Many of the ads, which feature exotic potions and pills, special curative diets, or newly discovered treatments, contain questionable claims about the effectiveness and safety of these products or services. 

Misleading offers could be costly in several ways: consumers could lose their money and increase their health risk, especially if they delay or forgo proper medical treatment. The ACCC advises consumers to consult their doctor, pharmacist, other healthcare professional, or public health organisations before purchasing any product or treatment 

Look out for phrases like 'scientific breakthrough', 'miraculous cure', 'exclusive product', 'secret formula', and 'ancient ingredient' and testimonials from 'famous' medical experts. 

Beware of claims like: 

'Lose 20 kilos in 2 weeks' 
'This groundbreaking scientific breakthrough has provided relief to millions around the world' 
'Our secret formula is based on ancient ingredients which produce amazing instant results'. 
Protect yourself: 

Ask for scientific proof that the product works – testimonials do not amount to scientific proof. 
Before you purchase you should consult your pharmacist, doctor, or other health professional. 
Ask about the seller's medical knowledge/expertise/qualifications. 
Home work schemes 
These schemes offer consumers the opportunity to make large amounts of money quickly and with almost no effort. 

Often they involve working from home using your PC. These schemes sometimes take the form of email processing – the Internet version of envelope stuffing where consumers are paid to send letters or reports to large numbers of other consumers. They can also involve scheme selling — where consumers are given a lot of information about how much money a scheme will make them and asked to buy a booklet or information page which will tell them how to do it. (In many cases, the scam operator's so-called 'information page' simply tells the victims to use the same scam on other consumers). 

Usually they ask you to pay a registration or set up fee before they provide you with the basics to set up the business. 

The most common concerns about these ventures are that they often dramatically overstate the achievable earnings and commonly they are vehicles to sell large numbers of low quality or worthless products to consumers who are then unable to on-sell them. 

The Trade Practices Act makes it illegal to: 

make false, misleading or deceptive claims about business opportunities, including predictions of future earnings; 
offer a price for goods or services which is not the full price that consumers have to pay; 
send invoices for goods or services that have not been authorised. 
Beware of claims like: 
'Earn thousands of dollars a month working at home using your PC.' 
'The next step is to purchase a comprehensive information package for $99.' 
'A few years ago I believe that I really had to work hard to make money…but then I discovered a revolutionary method of making money by being my own boss…' 
Protect yourself: 

Ask for proof that the project earnings are reasonable. 
Don't make upfront payments for starter kits or information packages. 
Get legal advice before you invest. 
Getting online – what to watch for 
There are many places to go to buy the equipment you need to get online and sign up with an Internet Service Provider. This can be a bewildering world to people who haven't owned a PC before or who have never surfed the web. There are a few things to watch for when making these decisions. 

Free PC with Internet access 

There have been a number of recent offers of Free PCs bundled with Internet access. The deals generally offer a PC for a small upfront cost, or no cost. These offers usually involve consumers entering into a contract for Internet access with a pre-determined ISP which they can be locked in to for lengthy periods. The monthly costs of the Internet access are bundled with the repayment for the PC and a credit charge. 

It is important that consumers looking at taking advantage of these offers carefully compare the packages with the cost of purchasing a PC and Internet access independently. Consumers need to be aware of the full extent of the financial obligations they will owe under the contract and need to check that the interest rates which apply. 

Protect yourself: 

Get answers to the following questions before purchasing a computer as a part of a bundled Internet access/credit package: 

How does the price of the package compare to the total price for the separate components (including buying different components from different suppliers)? 
If interest is charged, how does the rate compare to other forms of credit over the term of the contract ('interest free' periods often get made up later)? 
How much of the monthly charge is for Internet access and how much is repayment of the PC? 
How do the features of the PC compare with other PCs? What is the processor? How much storage capacity does it have? How fast is the modem? What software is included? Is a printer or other peripheral included? 
What support services are provided for the PC and the Internet access? 
How much 'unlimited' Internet access will you realistically use? Many Internet service providers offer free trial periods for the first month. 
Are there any limitations on the Internet service – is it available in your local call area, at all times? How reliable is the Internet service provider's connection? 
Are there charges for exiting the Internet contract early? 
Does the contract let the Internet service provider change the access charge during the life of the contract? 
What if you change your mind – is there a 'cooling off' period or can you get a refund? 
What happens if the Internet service provider goes out of business? 
Free Internet Access 
Some ISPs offer Internet access for free. Some of these offers are genuine, but usually rely on you either viewing their advertising or recruiting new members to the ISP as a condition of the 'free' surfing. This can be a great opportunity to introduce you or your family to the Internet, but there are a few pitfalls to look out for. 

Protect yourself 

Make sure any offer that involves signing up new members isn't a pyramid or referral selling scam (see above). 
Find out whether you will have to view certain advertising to take up the free offer and ask about the effect this will have on your browsing activity. 
Check that the company has the infrastructure (bandwidth, server quality and dial in lines) to handle the number of clients it is likely to attract by offering free services. Ask the ISP what rights you will have in the event that the ISPs does not have sufficient lines into their servers you'll have difficulty getting connections. The servers might not be able to quickly process the number of received, causing delays or even resulting in the server crashing. 

Information source: http://www.accc.gov.au