"Coupon Surf Day" Targets Internet Coupon Fraud
WASHINGTON, DC, June 10, 1999 -- Warning that consumers are being "mugged in their own homes," the Federal Trade Commission recently cruised the Internet and found 51 potentially fraudulent coupon schemes.
The sites got a wake-up call in the form of an e-mail from the FTC warning them of the legal consequences of their actions.
The targeted sites fall into two categories of business opportunities. Some of the sites offer a work-at-home coupon clipping scam, where consumers are told that they can earn substantial amounts of money clipping coupons.
Others advertise a "business opportunity" where consumers are told that they can make money by selling "coupon certificate booklets." The consumers purchase the booklets at a "reduced" price and then supposedly sell them for $20 or $50..
The problem with the coupon certificate booklet schemes is that they often make exaggerated earnings claims. Also, the certificates in the booklets carry significant restrictions on where and when the coupons can be redeemed.
Investigators from the FTC along with industry members of the Coupon Information Center (CIC), a non-profit entity that combats coupon fraud, conducted the "Surf Day" on May 20 and May 21.
The joint effort, FTC officials said, is part of a larger campaign to police fraud on the Internet.
"People are being mugged in their own homes on their computers," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection.
"With the use of the Internet, fraud artists have penetrated the sanctity of our homes. Surf Days let the FTC use the Internet to warn potential scammers who would destroy its marketplace credibility.
While fraud artists might try to take advantage of the Internet to perpetrate a fraud, the Internet also makes them susceptible to very quick and sure detection," Bernstein said. "The bottom line: 'Clean up your act or close down your site.'"
The FTC has conducted Surf Days targeting other types of scams as well, including pyramid schemes, credit repair schemes and other business opportunity schemes.
"The Internet is not going to be a new arena where scam artists can roam free," Bernstein added. Bernstein noted that the effort's objective is to educate businesses using the Internet about the law and deter those who may be violating the law from continuing to do so. The FTC has brought dozens of cases in recent years challenging advertising on the Internet.
"The people who can least afford it are the ones hurt the most by coupon-related scams," said Bud Miller, Operations Manager at the Coupon Information Center.
