Why is there spam?

"What is the purpose of spam, because surely no one buys any of these products?" This is often the first question asked in any discussion about unwanted e-mails. However, the answer is that millions of people actually do buy products based on spam, making it a potentially profitable, although very dangerous business. Also, an incredible $3 billion was lost in 2007 in phishing scams, the fastest growing type of spam. In this article, I will briefly cover "dubious spam" such as mortgage offers, "illegal spam" such as prescription medications, and "criminal spam" such as phishing scams.

Who is buying, what are they buying and why?

While exact number are impossible to come by, it is not difficult to deduce where the market is. Perhaps the biggest group of buyers are people addicted to painkillers such as Vicodin and OxyContin; estimated at two million in the U.S. alone, acccording to the National Institute of Druge Abuse. Many of these people have trouble getting prescriptions from their doctors and therefore are forced to buy their painkillers online.

The next biggest group of buyers is likely men that are embarrassed to discuss sexual dysfunction with their doctors, and therefore simply purchase Viagra or its competitors online.

Buying drugs such as Vicodin or Viagra online without a prescription is illegal; as such, contrary to the advertised "cheapest prices", the actual prices with shipping andhandling are typically much higher than at your local drugstore. Offers for legal products such as lotions, vitamins, etc., tend to come from fly-by-night "businesses" with very high prices, low quality products and/or nonexistent service.

Next, who isn't at least a bit curious about an offer for a lower mortgage or auto insurance rate? Additionally, many men will enthusiastically visit yet another pornography site, and the list goes on.

Are ordered products actually delivered?

Again, there are no exact numbers as it is impossible to accurately survey people about their illegal, dubious or embarrassing purchases. However, the numbers provided by various sources indicate that with illegal prescription medications, a "product" is received between 80% and 90% of the time. However, it is unknown how pure or genuine these products are. In the best case, they are likely cheap generic equivalents manufactured in China. Sometimes they are stolen or expired medications. They will never come through legal distribution channels and are typically shipped from foreign countries with no or lax law enforcement. It appears that these suppliers value repeat business and delivering something at least close to the advertised product, even if it means reshipping medications seized by U.S. Customs.

In the case of dubious mortgage and insurance offers, the spammer generally sells your contact info to a broker who then sells it to a legitimate bank or insurance company. Rarely is the final offer any different than if you had contacted the company directly. The downside is that the spammer then sells your contact info to anyone willing to pay for it, including other spammers.

Criminal spam

Here we are referring to phishing and confidence scams whose sole purpose is to steal money from any e-mail recipient foolish enough to respond to it. A typical phishing scam attempts to fool the recipient into entering financial account numbers and passwords into a fake bank login page. A typical "419" scam, named after the penal code in Nigeria making them illegal, promises to split millions of dollars with anyone willing to "help" by sending money to expedite the process. Obviously the criminal simply pockets the money and moves to another location. These confidence scams, which are also referred to as "Nigerian scams", quite often originate in Nigeria and involve outrageous business deal scams in the country.

While long time e-mail users quickly recognize such scams and ignore them, an unfortunate number of novice Internet users are fooled especially by bank related phishing scams. A recent Gartner survey estimates, over $3 billion was lost in 2007 by these kinds of scams.

This huge amount of money is motivating thousands of criminals to start phishing scam activities with the resulting increase in such spam.

Summary

In short, millions of people are purchasing products based on spam and many thousands of people are falling for various criminal e-mail scams. The profits from these activities are fueling the increasing amount of spam.

To be discussed in a future article, these profits are also paying the virus creators, the spammer friendly Internet service providers, and are a source of revenue for some poor countries. Even the major Internet infrastructure providers have little incentive to reduce spam as they bill by total bandwidth used; eliminating spam would reduce their profits.