The Dark Side of Internet Marketing: Five Common Scams
When it works properly, Internet marketing is an invaluable resource for both businesses looking to reach new customers and entrepreneurs looking to create a viable revenue stream for themselves. That's the good side of Internet marketing -- the side that identifies emerging customer needs and links them to quality products and services sold by reputable vendors through innovative marketing campaigns and strategies.
And then there's the dark side.
The dark side is out to make a quick buck, and doesn't care what kind of damage is caused in the process. Usually, the quickest and most lucrative way to make a buck is to exploit trust, ignorance or a combination of both. That's the central theme of the five strategies examined below. Some of these have been around for over a decade now, and you might be surprised that they're still going strong. But as the man once said, "There's a sucker born every minute." And right along with that sucker comes an "ethically challenged" individual who just can't wait to take advantage of them.
Read up on these shady Internet marketing practices so that you don't walk into one, or even worse, don't funnel your customers into one.
1) Rebilling Scams
The basic concept of rebilling is to get the customer to hand over their credit card number in the belief that they're paying for a one-time transaction. Unbeknownst to them, they're actually agreeing to an ongoing monthly "subscription" to whatever product or service is being offered. To add insult to injury, the product in question is usually of shoddy quality and does not do what it promises to.
You can find rebilling scams in a variety of different product categories, but they are by far the most rampant in health, fitness and weight loss supplements. These products are by and large not properly regulated by the FDA, so marketers can get away with making grandiose claims backed by very sketchy science. They're also helped in this area by public figures such as Dr. Oz, who have proven to be willing to tout "natural remedies" and "miracle fat burners" that don't actually have solid science backing their claims of efficacy.
Some of the worst offenders offer a "free sample" or "free trial" of a product, but require that you provide a credit card to cover a nominal shipping charge. Buried in the fine print is language authorizing a monthly charge to your card for more of the product, unless you cancel the subscription within a very short window of time. Of course, if you aren't aware that you've subscribed to anything, you aren't likely to cancel the subscription until the deadline has passed and you've been billed for the first month!
2) Pyramid Schemes
Pyramid schemes have been around for about a century. You would think humanity would have wised up by now, but the pyramid scheme is still going as strong as ever. These days, it has mutated into what is known as the multi-level marketing (MLM) scheme online.
From the perspective of the scammer, the MLM scheme is simple. Set up some sort of product, usually propped up by the same sort of grandiose claims used to sell rebilling products, then recruit people to sell it. Charge them a fee and take percentages of their sales for the privilege of selling your product. The people beneath you then have to make money by recruiting their own downstream affiliates. Eventually, you hit a point where you have a bunch of people in the lower tiers paying fees, but not actually able to sell the product.
It's much more complicated from the perspective of the low-level soldiers who are being played by the scammers at the top. The compensation system is often extremely complex in an attempt to disguise the fact that it is a pyramid scheme, and these companies also heavily employ the same techniques that cults use to brainwash their followers.
3) Website Hosting Contract Scams
These scams prey on people who are not familiar with getting a web site set up, most frequently small business owners who are attempting to set up their own site with no prior experience. The scammer usually offers to build a site for the client at a suspiciously low price, or possibly even for free. This is conditional on the site owner signing a web hosting contract with the developer for a fixed period, usually one to several years.
What the inexperienced business owner does not know is that the scammer is going to register the domain name and procure web hosting at a fraction of what they charge their client -- a process that the client could have easily accomplished on their own. Unfortunately, this is usually legal, if dishonest and exploitative.
4) Black Hat SEO
A black hat search engine optimization technique is one that offers a shortcut to higher page rankings by doing something that the search engine prohibits or bans from its listed sites. Not only can this backfire and get a site penalized or even blacklisted by a search engine, many of the techniques that "black hat" providers use are badly outdated and will either do nothing to help the site or even hurt it in the rankings.
Most of these companies don't come right out and label themselves as "black hats" or illicit service providers, but they can usually be identified by their overblown promises (such as guarantees of immediate first-page rankings) or by cold calling via unsolicited emails and private messages on forums. They also like to offer an "SEO platform" that they charge a recurring monthly fee for; nine times out of ten what they're offering does absolutely nothing to help.
Parasiteware attacks the affiliate links or cookies of the site it is installed on, covertly overwriting them with the affiliate numbers of the software's creator so that they receive all the commissions. Parasiteware is often snuck onto sites in the form of a plugin or widget, usually in the form of things like toolbars and coupon generators. It can also be installed by an end user, and will change any compatible affiliate links that the user follows.
Unlike the other scams listed here, parasiteware is often out in the open and provided by major companies on an entirely legal basis. Ebates is widely considered to have been a form of parasiteware that worked from the customer's end, using BHOs (browser helper objects) to redirect customers away from the original affiliate link on a site to one provided by Ebates. While Ebates has changed some aspects of their business model over time to move away from hijacking affiliate links, there are still many other service providers that operate on a similar basis.
The dark side of Internet marking can be tempting, but it usually promises much more than it can deliver, and can end up crippling a business in the long run. It also drags the name of Internet marketing as a whole through the mud, causing customers to look at legitimate service providers in the same way they look at scammers and con artists.
- Globalie Blog team