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November 02, 2009

Are you being scammed by Facebook ads?

Deceptive advertising is stealing money from unsuspecting folks on social networks while the networks reap the rewards. Don't let sleazy ads on Facebook or MySpace rob you blind

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I've written a bit lately about how cyberthieves using social media to scam people. It turns out the most egregious scammers are many "legitimate" companies that run deceptive ads on these networks.

TechCrunch has a fascinating series on how advertisers are using social games to trick Facebook and MySpace users into forking over personal information or signing up for recurring subscriptions they don't want.

[ InfoWorld's Robert X. Cringely sets his sights on one of the oldest and most persistent online scams in "Why can't we do anything about spam?" | Tune in to the InfoWorld Security Central channel for the latest IT security news and reviews. ]

It starts with stupid-yet-addictive quizzes and games like FarmVille, Mafia Family Wars, and Mobsters. The games themselves are free, but if you want to advance faster than your friends, you'll probably have to buy virtual objects using real money. Per BusinessWeek:

Zynga doesn't charge users to play FarmVille, but it does sell digital crops, cattle, and farmland. Corn seed, for instance, goes for the equivalent of 10 cents; cows run 20 cents each. All those digital goods add up. Zynga pulls in its nine-figure annual revenues from FarmVille and 20 other games....One recent success: digital sweet potato seeds that cost $5 a packet. The seeds, which of course cost nothing to duplicate, pulled in more than $400,000 in three days.

Don't have $5 to spend on a bag of imaginary seeds? You can get $450 in Farm Cash by clicking an ad and signing up to receive a "free learning CD" from Video Professor. Of course, the "free" offer comes with caveats; if you don't cancel in time, you'll pony up $190 for an entire learning series.

Per TechCrunch's Michael Arrington:

A typical scam: users are offered in game currency in exchange for filling out an IQ survey. Four simple questions are asked. The answers are irrelevant. When the user gets to the last question they are told their results will be text messaged to them. They are asked to enter in their mobile phone number, and are texted a pin code to enter on the quiz. Once they’ve done that, they’ve just subscribed to a $9.99/month subscription.

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CodeZombie 2-Nov-09 12:54pm
I think I've done pretty good by not using Facebook or MySpace. I do have accounts on both of them but I've done pretty much nothing at all with either of them and don't really feel that I've missed a thing. I one time tried one of the aforementioned "games". I think it was supposed to be a racing game but I found it to be so utterly boring that I could've had much more fun watching paint dry. I think I tried one of the mafia games once as well and found it to be pretty much the same. Just as lame, just as boring, just as useless. Facebook and the rest of them are just lame, boring, and a big waste of time. And the fact that people would actually pay money for these online games tells me that there's also way too many idiots who apparently don't have a life online as well.
joe52 2-Nov-09 4:32pm
There another company that make the business practices of the game company listed in your article appear to have the highest standards of any business. I ran across a series on a gaming company named Evony on http://www.bruceongames.com/. Apparently Evony engages in more than just the following practices: They secured their mailing list prior to forming a corporation, then transfered all personal information of players to the new corporation without securing their consent. The company uses a mail drop as their address but operates entirely out of China. There is complete absence of any company physical address, telephone number, or other contact information on their website and forum. The server is hosted on a server at The Planet in Dallas, Texas-but The Planet denies having them on their server. There's a lot more information on the blog, that I did verify, including the suit by Microsoft for fraud by them. Looking how the company is organized it would appear that not only is the company set up to make money through it's portal in Texas but is outside the jurisdiction of the IRS to collect taxes from them, either as an agency or through a court proceeding. There's minors playing with adults in the game. If there's an incident involving a sexual predator, law enforcement would not be able to obtain records and information they need.
bbbaldie 3-Nov-09 4:18am
I own ten or so sites, the most heavily hit getting perhaps 15,000 monthly visits, and generate $300-400 monthly from Adsense. I'm not getting rich, but that's how one can make money honestly. Now, I'm sure I could incorporate some sleaze and triple that income, but that's not going to happen. That's the difference between me and the slimeballs. I'm happy with having my utility bills paid each month by Google and being able to enjoy a good night's sleep.
prowness 3-Nov-09 5:31am
If you're dumb enough to spend time with this garbage, then getting ripped off by dishonest advertisers is the least of your problems.
lccts1 3-Nov-09 5:51am
Much about this article is lame, uninformed, or just plain wrong. 1st, cows cost no real money at all in Farmville. Not .10, not .01, but .00 real cash. Second and more importantly, the $5 Sweet Potato seeds were overtly sold for the humanitarian purpose of raising money for Haiti. Unless it could be shown that the money raised wasn't really used for that purpose then neither this article nor the BusinessWeek article it sourced from have a point in this regard. Alas, those who don't play and didn't see the promotion rely on informed reporting which, in this case, they didn't get. The article's point about the quizzes for bonuses however is spot on... I took one once because I was suspicious (I stopped at giving them a phone to text, that's just stupid) and used a "honeypot" e-mail address to see what would come of it -- Sure enough, that address collected spam like... well.. spam. Filter to trash.
Robert X. Cringely 3-Nov-09 7:51am
well your complaint is with Business Week, no? because everything you say is inaccurate appears in that quote. nowhere do I (or the biz week writers) say anything questionable happened to that money. that quote exists to provide a brief example of the virtual economy in FarmVille and games like them, to my readers who've never played them. if BW got it wrong, I'm sorry about that, but there's not much I can do about it.

still, thanks for clarifying. how's the farming going?

rxc

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