From the looks of its website, McWhortle Enterprises has all the makings of a terrific investment opportunity. There’s detailed information about the organization’s hot new product?a handheld biohazard detector?flattering testimonials by corporate executives and analysts, an audio interview with CEO Thomas McWhortle and, last but not least, a tantalizing chance to purchase company stock at pre-IPO prices. Would-be investors who enter their credit card information, however, are in for a shock.
A giant banner blazes across the next page: “If you responded to an investment idea like this, you could get scammed!”
McWhortle isn’t a real company at all. It’s the creation of the investor education group at the Securities and Exchange Commission (SEC). The SEC believes showing consumers how easily they can be suckered is far more effective than warning them with a brochure. “I want to educate people to what fraud looks like on the Internet so next time they encounter a real scam, they won’t let their excitement over a good deal cloud their better judgment,” says Susan Wyderko, director of the SEC’s office of investor education.
Wyderko has no figures on how big the Internet fraud problem is, but unlike telephone scams and other schemes, shysters on the Internet can make their scams look irreproachably legitimate.
McWhortle.com went online in mid-January, and somewhere out on the Net are three other fake sites like it?though Wyderko won’t identify them. It appears the SEC’s bait-and-switch tactics are getting the message out?the McWhortle site has received more than 1.7 million hits since it went live.
Seems like there really is one born every minute.