Global e-Commerce Scams

Whenever and wherever there is any perceived opportunity, there will be hucksters, con artists and fast talking promoters who are only concerned about getting you to write a check and have no concern over whether you get any value or benefit from their products or services. Global e-Commerce will monitor an assortment of news sources to locate any scams or schemes that are aimed at the novice e-commerce entrepreneur. If you know of any, we would welcome your contributions. Please send your suggestions to scamnews@offshorepress.com.

Tax Free E-Commerce?

We suspect the most widespread kinds of scams and schemes involving global e-commerce will have something to do with promises of being able to save taxes by doing business offshore. Many businesses are looking forward to a marketing environment where they can avoid the hassle and cost of collecting and remitting sales taxes to hundreds or even thousands of different tax agencies. Merely being an out-of-state or even an out-of-the country vendor is not a guarantee that you will be able to avoid any or all obligations to collect sales taxes. Some jurisdictions will claim that simply having your web files copied onto the computers of their residents will be sufficient to require you to collect sales taxes for them. Other jurisdictions will insist that you collect sales taxes if you have any agents, employees, distribution facilities or even a web server in their state. 

As for income taxes on business profits, this will be a far more contentious and complicated issue than sales taxes. A lot of promoters will tell you that you can set up a web based business in their tax haven jurisdiction and you can accumulate profits tax free as long as you wish. However, doing that is likely to get you into an argument with the tax collector in your country -- particularly in the US. Without advance consultation with a knowledgeable tax professional, you are likely to discover that your tax collector has a wide variety of little known laws and regulations that can trip you up and cause your offshore profits to be taxable. 

Offshore Web Services

If you have a choice between using a web service where you have to pay taxes on your profits and using one that says you can accumulate profits tax free -- which service are you likely to use? After all, whether the web service provider is across town or on the other side of the world, it takes about the same amount of time to transfer data files from your office to your web server. 

The allure of tax free profits can cover up a lot of other deficiencies in the services. We think that much greater "due diligence" is required to evaluate the quality of a foreign based web service than of one in your own country. And don't forget that if you have dispute with the foreign web service, you are likely to have to seek recourse in a foreign court, with different rules. 

Offshore Directories

More and more directories of web sites and businesses are begining to offer enhanced listings for a fee, even though a basic listing is ostensibly free. You can expect that this will also become a common scam for English speaking promoters from other countries. You will be offered an enhanced listing in some Internet directory but you won't have any way to know if the directory generates any significant amount of traffic. Getting a listing in an Internet directory is likely to be of marginal value unless you know that's one a lot of people utilize. 

Bulk e-Mail

Nearly every day, I get at least three or more email (spam) offers to sell me some huge list of email addresses for bulk mailings. Sometimes they claim that these are "opt-in" lists where each listing has requested to be included in the list. However, the bigger the list and the lower the price of the list, the less likely that the list is an opt-in list or that it will be worth the cost of renting it. Unless you get the list from a highly reliable source -- such as the owner of an ezine list of subscribers -- using the list can cause you a lot of grief. Unlike regular U.S. mail, a knowledgeable recipient of spam email can do a lot to retailiate. They can create or acquire a program that will send hundreds of emails to you for each one they get from you. They can complain to your Internet Service Provider in a variety of ways and that could cause you to lose your service. One thing they can do is to block (filer out) all amail coming from your service provider and can tell their friends to do the same. If your service provider has other customers, they are likely to cut off your service instead of letting their other customers have their mail blocked. 

To be continued .....