Technology is changing faster than the law can keep up, and the internet hasn’t made catching criminals any easier. Federal law defines computer fraud as “the use of a computer to create a dishonest misrepresentation of fact as an attempt to [cause] loss.” And for the most part, scammers who carry out their schemes on a computer or smartphone can be held legally accountable for the damage they cause. But there are still a few legal loopholes that fraudsters can jump through to scam unsuspecting users.

1. Anyone can sell an online subscription…

…even if they have nothing to sell. While phishing and identity theft are illegal, crafty fraudsters have figured out how to accomplish something similar without stepping over the boundaries of law.

Here’s how the scam works: someone sends you an email or text message offering a subscription service. The email or text explains that by signing up on a website, you can receive an item: daily dating tips, ringtones, or wallpaper for your phone.  But the moment you sign up, the subscription service begins charging your phone account. The user may end up dealing with exorbitant fees, like $10 per ringtone; or recurring fees, like having to pay twice a week, and will often never receive the item they were promised.

2. Anyone can bill you for your domain name…

…even if it doesn’t belong to them. Scammers often take advantage of lax internet laws to charge domain owners for things they don’t need.  In a typical scam, a “company” sends an internet domain owner a “renewal” bill. The bill is actually a disguised solicitation inviting the user to transfer domain registration to the company – which then charges the user for the transfer, for the registration, and for submitting the domain address to search engines.

If the “company” is inside the U.S., their invoice must say that they’re solicitors or they can’t bill you – and the invoice often does say that, in very, very small print that’s easy to overlook. But if the scammers are outside the U.S., it’s even easier for them to pull off the job: they’re not legally obligated to describe themselves as solicitors, even if they’re soliciting an American citizen. Often, people don’t even know they’re being scammed.

3. Anyone can set up an online store…

…even if their goods aren’t real. E-commerce stores pop up all the time, and it’s almost impossible to keep track of which are legitimate — or how to we should be defining “legitimate.” For example, although a high-end handbag manufacturer might not be happy about the cheap knockoffs appearing on a rival’s site, many consumers don’t mind having a cheaper option. And technically, many knockoff retailers are operating legally.

But sometimes ecommerce stores toe the legal line a bit more maliciously. There have been many cases in which scammers have set up an online pharmacy, complete with full contact information and qualifications listed on their website.  The drugs will be cheaper than those found at your local Walgreens, off-brand, or misbranded, and some won’t require a prescription, even the same drug normally does. If a customer receives the product they paid for, though, and the FDA can’t prove that the drug is misbranded, then the retailer is still operating legally.



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Roxanna "Evan" Ramzipoor

Roxanna "Evan" Ramzipoor is a content marketing manager at Sift Science. Her debut novel The Ventriloquists will be released in 2019.