From CNN: Berkeley Premium Pharmaceuticals, marketer of nutritional supplements such as Enzyte, faces a lengthy Federal investigation. If you watch sports on television, you’ve probably seen their “Smiling Bob” ads, which describe how a man’s life was transformed into a satisfying experience.
The US Department of Justice, working with the FBI, the US Postal Service, and other law enforcement authorities, claim that company executives and founders engaged in mail and wire fraud, money laundry and other activities that involved US$100 million in fraudulent credit card charges.
Customers would call or contact the company to obtain a free trial supply of a product. However, the order form required customers to provide a valid credit card number, as the trial offer involved a subscription delivery service.
Authorities claim that, even though the company promised that customers could cancel their subscription before the first shipment, customers were later charged for supplements and other products. Banks became involved as credit card holders disputed the charges. In some case, banks will take the hit on a fraudulent credit card transaction, rather than making the customer pay.
This incident underscores the value of identity security. I often run across offers on the Internet, newspapers, television and radio that seem too good to be true. It’s one thing to give a marketer your e-mail address - usually, the worst that can happen is some additional spam in your e-mailbox.
But when a customer willingly surrenders their credit card information, and receives no value in return, the problem becomes greater. Only the worst offenders get caught, when their volume becomes to great or customers file complaints.
There are still many consumers who don’t trust online shopping in the first place. Incidents like this don’t help.
Tags: crime, e-commerce, government, safety, USA
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