{"id":28417,"date":"2025-04-29T10:27:44","date_gmt":"2025-04-29T18:27:44","guid":{"rendered":"https:\/\/www.spokeo.com\/compass\/?p=28417"},"modified":"2025-04-29T10:27:48","modified_gmt":"2025-04-29T18:27:48","slug":"is-scamming-illegal","status":"publish","type":"post","link":"https:\/\/www.spokeo.com\/compass\/is-scamming-illegal\/","title":{"rendered":"Is Scamming Illegal?\u00a0 What You Should Know About Online Scams"},"content":{"rendered":"\n

*This article is not legal advice and is intended for informational purposes only.<\/em><\/p>\n\n\n\n

Spammers, scammers, and snake-oil peddlers are at an all-time high thanks to the internet.  Scamming tactics are ever-changing and are becoming increasingly creative, making them hard for the average person to keep up with (and protect themselves from!). Getting scammed sucks, and you\u2019re often left without much reprieve.  Because the internet still feels very much like the wild wild West when it comes to scams, it\u2019s fair to wonder \u201cIs scamming illegal?\u201d  <\/p>\n\n\n\n

The answer (sadly) isn\u2019t as straightforward as one might expect, so, let\u2019s take a look at the legality (and potential consequences) of online scams.<\/p>\n\n\n\n

Is Scamming Illegal? <\/h2>\n\n\n\n

If you\u2019re wondering if scamming is illegal, the answer is generally yes\u2026but it can ultimately come down to how you<\/em> define \u201cscam.\u201d  While the term \u201cscam\u201d is officially defined as \u201ca fraudulent or deceptive act or operation<\/em>,\u201d the legal world uses the term \u201cfraud.\u201d  Fraud is legally defined as: \u201cthe intentional use of deceit, a trick or some dishonest means to deprive another of his\/her\/its money, property or a legal right<\/em>.\u201d<\/p>\n\n\n\n

Now, you read those definitions and think, \u201cWhat\u2019s the difference?\u201d  There really isn\u2019t one.  But<\/em>, we don\u2019t operate in a world that goes by dictionary definitions all the time, so the reality is there are some things that feel like a scam, but manage to skirt around the law. <\/p>\n\n\n\n

Do \u201cLegal Scams\u201d Exist?<\/h2>\n\n\n\n

There are some things that most people would agree are scams, but somehow fall in a gray area that allows them to exist.  Take, for example, carnival games.  Everyone knows they\u2019re rigged, even the best prizes typically don\u2019t warrant the price of entry, and yet all over the country you have people forking out 20 bucks for a chance to win (but almost never do) a jumbo stuffed elephant that was purchased for $0.10 by the vendor.  We\u2019re going to get into the weeds a little bit on this one, but carnival games are a great representation of something that society would consider a scam, but somehow legally isn\u2019t.<\/p>\n\n\n\n

When it comes to carnival games, they get away with essentially being scams by overcoming a few legal hurdles<\/a> that have been set out.\u00a0 First, carnival games are considered to be \u201cskill-based\u201d rather than \u201cchance-based,\u201d due to the fact that some people are going to be able to throw a dart better, toss a ring better, or do whatever silly task, better than someone else.\u00a0 Second \u2014 and this is the biggie<\/em> as it relates to many \u201clegal scams\u201d \u2014 generally speaking, the consideration<\/a> (or what a person gives) does not have to inherently be of the same or greater value than what they receive when it comes to certain things.\u00a0 Let\u2019s simplify that: If you know (or reasonably should know) that best case your $20 at the carnival is only going to get you a teddy bear worth $0.10, that\u2019s on you.<\/p>\n\n\n\n

Okay, so what does that mean on a more general scale?  Essentially, it means people can sell you something that isn\u2019t worth how much you\u2019re paying for it.  Again, super-simplifying that down, it means people can offer you an essentially worthless item or service, so long as they stay vague and don\u2019t overpromise.  <\/p>\n\n\n\n

\"are<\/figure>\n\n\n\n

Common Types of \u201cLegal Scams\u201d<\/h2>\n\n\n\n

It\u2019s worth noting that some people might not consider these things to be \u201cscams,\u201d but they often effectively are.<\/p>\n\n\n\n

Deceptive Solicitations  <\/h3>\n\n\n\n

A real-world example is often directed towards business owners \u2014 especially if you have an online domain.\u00a0 Scammers will send you notices in the mail or via email that claim to be official domain renewal services or business filing services.\u00a0 They\u2019ll often make the document look like it\u2019s coming from a legitimate government service, with classic \u201curgent\u201d markings all over.\u00a0 But, somewhere in very very fine print, it will reveal that it\u2019s actually just a solicitation<\/a> that offers no real service or value.\u00a0 In fact, they are normally trying to get you to pay for a service that is completely free and easy for you to do yourself.\u00a0 And that\u2019s the loophole.\u00a0 They are technically providing a service, it just isn\u2019t actually worth what they are trying to charge you.<\/p>\n\n\n\n

Multi-Level Marketing (aka MLMs)<\/h3>\n\n\n\n

Another super common not-technically-a-scam-but-everyone-considers-it-a-scam is multilevel marketing<\/a>, better known as MLMs.\u00a0 MLMs are like the legal first cousin of pyramid schemes.\u00a0 So long as they adhere to a couple of boundaries, they\u2019re legally okay.\u00a0 The problem is they often come with scam-like results for most people.\u00a0 That\u2019s because MLM companies often target vulnerable people with limited employment options.\u00a0 They promise flexibility and endless profits, but many people just end up sitting on a whole bunch of products they couldn\u2019t really afford to buy, and now can\u2019t sell.\u00a0 There are definitely some exceptions, and there are certainly people who are roaring success stories from MLMs, but for the majority of people who end up in MLMs, it\u2019s essentially a scam.<\/p>\n\n\n\n

When it comes to legally gray scams, people\u2019s creativity will always be ahead of the courts.  That\u2019s why you can\u2019t always rely on having legal recourse should you get scammed.  Are scams typically illegal?  Yeah.  Does that stop people from finding loopholes?  Unfortunately not. <\/p>\n\n\n\n

Common Scams That Are Absolutely Illegal<\/h2>\n\n\n\n

Now that we\u2019ve covered the gray zone of scamming, it\u2019s important to point out that the vast majority of money-grabbing scams are definitively illegal.\u00a0 If you\u2019ve fallen victim to (or, for some terrible reason, are thinking of trying) one of these scams, there are legal repercussions any perpetrator might face, which we\u2019ll get into a little later in this article.\u00a0 Here are the four most common \u2014 if you want in-depth information about each, check out our breakdown of the 10 most common internet crimes<\/a>.\u00a0<\/p>\n\n\n\n

Phishing  <\/h3>\n\n\n\n

Phishing scams<\/a> are extremely common and extremely successful scams.\u00a0 Even if you know about them, and at this point most people do, scammers are constantly stepping up their game to get you to click a link that gives criminals access to all of your important private information.\u00a0 They often appear to be legitimate links, but one click and a whole lot of damage can be done.<\/p>\n\n\n\n

Bait-and-Switch Advertising<\/h3>\n\n\n\n

Brick-and-mortar retail is out, online shopping is in.\u00a0 While this is generally a convenience and offers a broad selection of options to nail down your personal style, it\u2019s opened the door for bait-and-switch<\/a> product scams.\u00a0 It\u2019s simple, a less-than-legit online retailer<\/a> (or social media shop seller) will post pictures of a product like a dress, that looks beautiful, high quality, and perfectly fitted to a model, and claim that is the dress they\u2019re selling.\u00a0 The catch, what buyers receive is often a dirt-cheap, borderline unwearable version that certainly isn\u2019t what was pictured.<\/p>\n\n\n\n

While using images of nicer products to sell cheap knockoffs is false advertising<\/a> at the very least (which is a form of fraud), there is a less clear-cut spinoff to bait-and-switch tactics.\u00a0 Some online stores will advertise a product at a certain price, only for shoppers to see it marked as \u201csold out\u201d once they get to the product page.\u00a0 They\u2019ll then notice the same item listed as in stock as a different listing, but with a higher price.\u00a0 The idea is once they have you hooked on the idea of buying the product, they\u2019re banking on you being willing to pay a higher price than you would have initially intended.\u00a0 This form of bait-and-switch is also technically illegal, but many online stores are able to tiptoe around any actual repercussions.\u00a0\u00a0<\/p>\n\n\n\n

Investment Fraud<\/h3>\n\n\n\n

Investment fraud is pretty straightforward conceptually.\u00a0 Someone typically presents wrong or warped information, tricking investors into handing over substantial amounts of money before realizing they\u2019ve been had, and the scammer is gone in the wind.\u00a0 Pyramid and Ponzi schemes are the most well-known, but there is no shortage of fake investments to be on the lookout for\u00a0\u2014\u00a0including crypto investment scams<\/a>, which have exploded over the last few years.\u00a0<\/p>\n\n\n\n

Imposter Scams<\/h3>\n\n\n\n

Imposter scams<\/a> come in all kinds of varieties, but the main aspect is the same \u2014 scammers pretending to be someone they aren\u2019t.\u00a0 Often they\u2019ll claim to be from some government agency like the IRS or Border Patrol, and trick people into sending them money in order to clear their name from some sort of trouble.\u00a0 Another common tactic used by scammers is to pretend to call from your bank as some sort of fraud alert, and then trick you into giving up private banking information that they later use to steal from you.\u00a0 Again, imposter scams can take almost any form, so you should only ever interact with officials if you were the one to initiate the contact from information gathered from a verified and official source.<\/p>\n\n\n\n

Another well-known version of an imposter scam is catfishing<\/a>.\u00a0 Catfishing can be a slightly more complex legal issue because 1) it\u2019s a fairly new phenomenon with limited legal precedent<\/a>, and 2) as it stands, simply pretending to be someone else online isn\u2019t illegal.\u00a0 The definitive legal issues arise when catfishers start to receive some form of benefits for their fake identity, such as using it to lure you into a phishing scam (a form of catfishing known as catphishing<\/a>).\u00a0 Furthermore, the person whose pictures the catfishers are using can also have some form of recourse, especially if the catfisher was behaving in ways that could harm the pictured person’s reputation.<\/p>\n\n\n\n

\"is<\/figure>\n\n\n\n

Legal Consequences of Scams <\/h2>\n\n\n\n

When it comes to the legal ramifications of committing scams, prison time and hefty financial penalties are on the table.  Scammers often face fraud charges under state or federal law, meaning their penalty can vary dramatically based not only on what they did, but where they did it.  <\/p>\n\n\n\n

With online scams, perpetrators often face federal wire fraud charges.\u00a0 Wire fraud is legally defined as<\/a>: \u201c(1) a scheme or artifice to defraud; and (2) use of interstate wire communication to facilitate that scheme)<\/em>.\u201d\u00a0 Simply put, fraud committed across state lines that involves electronic communications (like email or social media).<\/p>\n\n\n\n

The punishment<\/a> for wire fraud is up to 20 years in prison, and up to $250k in fines, per count.\u00a0 That money often goes towards some form of restitution for victims, although it sadly does not often cover all of the losses for all of a scammer\u2019s victims.<\/p>\n\n\n\n

Another charge that online scammers often face is called computer fraud.\u00a0 This is defined as<\/a> \u201cfraudulent activity that is done by using a computer, more specifically, when it occurs over the Internet<\/em>.\u201d\u00a0 <\/em>The federal penalty for this is up to 10 years in prison, and up to $10k in fines.<\/p>\n\n\n\n

TL;DR: <\/em><\/strong> Committing online scams can put you in prison for 20 years, run fines of up to $250k for each count, and even see additional restitution tacked on.<\/p>\n\n\n\n

Final Thoughts<\/h2>\n\n\n\n

If you came here to make sure there was some justice when it comes to scammers that are caught, then hopefully you can rest just a little better knowing some of these predators get what\u2019s coming.  If you came to this article because you were thinking of starting your own scamming enterprise, hopefully, you found some sense (and a moral compass).  Either way, the reality is scamming is never worth it.  Worst case for the scammer, they end up in prison with mounds of monetary penalties.  Best case, they commit morally bankrupt quasi-scams hoping to make a quick buck at someone else\u2019s expense.  <\/p>\n\n\n\n

If you\u2019re in contact with someone who\u2019s starting to feel scammy, don\u2019t take a risk.\u00a0 Instead, look up who you\u2019re dealing with using Spokeo\u2019s people search tool<\/a>.\u00a0 As they say, it\u2019s better to be safe than sorry.<\/p>\n\n\n\n

Cyrus Grant is a writer from Southern California with a background in dispute resolution, law, and politics. When he isn\u2019t writing he can be found deep-diving into the latest technology trends or simply spending time at the beach.<\/em><\/p>\n\n\n\n

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