Protect Yourself from Scams – Nov/Dec 2006

Reprinted with permission from Sculptural Pursuit

Most artists who have web sites will tell you it’s a valuable tool. A well-designed web site showcases your work and allows galleries, collectors, and museums to reach you. That same ease of contact, however, gives con artists the opportunity to take advantage of the unwary. Even if you don’t have a shopping cart on your web site or process credit cards in your business, you can still be ripped off. By staying alert to the pitfalls of doing business in the cyber world, you can keep from becoming another statistic.

One of the many common scams begins with an email from a stranger praising your work and wanting to buy several pieces. The email address may be from a free service like Hotmail and the sender doesn’t provide a phone or mailing address, although he may claim that he’s buying the art for his palace in Dubai or villa in France. He wants the work quickly and is eager for you to respond with a price.

Flattered and excited, you respond, but realizing it’s an unusual transaction, you tell the potential collector that you’ll only ship the work once you receive certified funds or a verifiable credit card. He’ll agree, telling you that a cashier’s check in US funds is on the way. Sure enough, you open your mailbox one day and there it is – an envelope with a postmark from London, containing a cashier’s check for a sizable amount, one much greater than the price you negotiated. A warning bell begins to ring. The check is drawn on an American bank, even though the purchaser is in a foreign country. The warning bell gets louder. When you email the collector to ask for an explanation, he responds with shipping instructions to an American address and instructs you to send a cashier’s check with the art or wire the extra funds so that his “agent” can ship the work abroad.

You look up the number for the bank, not trusting the number on the check, and then call. The sympathetic person on the other end of the phone tells you that the check is a forgery, they’ve been hit by this scam that originated in Nigeria, and that you should tear the check up and forget it. The authorities aren’t interested because this happens all the time and unless you actually shipped the goods, no crime has been committed. You swallow your disappointment and move on — until the next time.

In a variation on the same theme, a “collector” emails you more than one credit card number to pay for his sizable purchase, expecting you to split the transaction among several cards. He gives you all of the pertinent information – name, card number, expiration, three-digit security code, and billing address. You realize that a smart person wouldn’t send such personal information in an unsecured email, but you process the cards, receive an authorization code for each of them, and the money appears in your bank account. A little surprised and excited that this time the sale is real, you package the pieces and ship them off, usually to a name and address different from the billing name and address.

Months later, your account is hit with a charge-back for the full amount of the transaction, the credit card processor assesses a charge-back fee, and you have to pay higher processing costs on all of your credit card transactions. How did this happen? An authorization only means that an account with that number and enough available credit exists. That’s it. If the card is later reported stolen or the charge is disputed, it’s you, the merchant, who ends up holding the empty bag.

How do you prevent this scenario? You can invest in fraud protection for your shopping cart or you can spend lots of time verifying ISPs for emails you receive, but as the technology evolves, so do the crooks. It doesn’t have to be that complicated.

Use common sense. Do strangers usually buy multiple pieces from you sight unseen? Do they usually want them immediately? Those are both common red flags. When you’re making an on-line purchase, don’t you want to know something about the merchant with whom you’re doing business? So do most collectors who are contemplating spending thousands of dollars on art work.

Stay aware. Be cautious of free email addresses and untraceable phone numbers. Anybody can set up an email account in any name with Yahoo or Hotmail, and the advent of internet telephony companies like Skype and NetZero makes it possible for thieves anywhere in the world to obtain US phone numbers. Also exercise care when the billing address and shipping address are different, or if someone claiming to be living somewhere else in the world gives you a US address. Many of these schemes originate in Nigeria, Romania, Russia, Indonesia and other countries.

Build a relationship with the potential collector. Gather as much information as you can. Make phone contact, send a snail mail letter and ask for a response. Request a faxed copy of the credit card(s) with a signature. Take time with the transaction. Most thieves want to avoid personal contact, many times because their poor English is another red flag, but mostly because they want to strike fast and move on to the next target. Someone who is interested in your work is usually also interested in you as an artist and will take the time to develop a relationship.

Keep records of all interactions with strangers who express an interest in your work.

Trust your gut. If your instincts tell you that a transaction is suspicious, it probably is. It’s okay to say no to a potential client if you feel the risk is too great.

Stay informed. Read your credit card processing agreement to find out what your liability is in the case of fraudulent charges. Keep abreast of the latest scams – they spring up like weeds in a field after a rain. Visit scambusters for updates, tips, and information.

If you follow all of these steps and still fall prey, file a complaint with the FBI’s Internet Crime Center..

Copyright 2006. Originally published in the July 2006 Issue of Creative Wisdom, a free online E-zine. Republished with permission of Hammer & Pen Productions. No further republication or redistribution is permitted without the consent of Hammer & Pen Productions.