Wednesday, August 12, 1998 Published at 12:01 GMT 13:01 UK
Business: Your Money
Internet scams rob investors of $100m
Gambling schemes targeted by US regulators
Consumers have lost $100m (£61m) to bogus investment schemes on the internet, according to US financial authorities, prompting a crackdown on net fraud.
The US Federal Trade Commission (FTC) and Securities Exchange Commission (SEC) along with 20 state authorities have highlighted more than 60 fraudulent entertainment industry-related investment offers.
The cases relate to scams involving film and television production, gambling and theme restaurants, but funds had largely gone into promoters' pockets rather than into proposed investments.
The FTC's consumer protection bureau director Jodie Bernstein said: "Showbiz has an enormous amount of appeal. Consumers who have bought into these schemes ended up losing tens of thousands of dollars."
Examples include the Children's Cable Network, My Pet TV, a film called Operation Desert Gold, an "Elvis Immortal" merchandise package and a gambling operation called Casino Cruises.
High returns offered
The FTC said World Interactive Corp offered investors the likelihood of turning $10,000 into $157,000 in a year with an investment in an online gambling casino.
It said the internet was increasingly being used by fraudsters as a medium for recruiting investors, not least because of the ease of presenting scams on glossy webpages.
"These 'investment opportunities' are peddled as bright, new initiatives. But they're actually the same old story. They are touted with fabulous earnings claims, promoted with deceptions and virtually all the investors end up losing their money."
Check with local regulators
The UK's Financial Services Authority issued similar warnings earlier this year, saying deals that look to good to be true usually are.
Investment authorities on both side of the Atlantic say would-be investors should always check with their national regulator to see if the investment is registered and whether those behind the scheme have a record of previous complaints.
The FSA warns UK investors to check out local and European Union-based investment offers with its Central Register which can be contacted on 0171 929 3652
It emphasises that net users should be aware that websites with addresses including '.uk' are not necessarily located in the UK and that those losing money to operators outside the jurisdiction of UK courts would have little if any legal redress.
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