It is an unfortunate truth that anytime you have a new shiny gadget that is in high demand, you also get a wide assortment of scams set up around that gadget. And the iPad is no exception to this rule. In fact, the iPad is a dream come true for many scam artists, with entire companies built around the hype of products like the iPad in order to scam people out of their money. There's even one potential scam built right into the iPad. Luckily, you can avoid most of these scams once your learn how to recognize them.
Free iPad Giveaway. By far the most common scam is the giveaway. There are some legitimate giveaways, but they are very few and far between. Apple does not really like giveaways using their products and have rather stiff guidelines about them, including a restriction that "free" not be used prominently in any display of the giveaway, so anytime you see "free iPad" posted in bold letters, you know it is a scam.
The best way to avoid this type of scam is to simply never participate in one of these giveaways. The risk is far too great. But if you absolutely must and believe a giveaway is legitimate because it comes from a well-known company, always go to the company's website directly by typing it into your web browser. Do not click on a link from an email, Facebook update or Twitter tweet no matter how official it looks.
A very well known iPad giveaway scam involved Craig Newmark from Craigslist emailing a person who recently posted a listing with a free giveaway offer that even included some wording about what to do if you thought the email was a scam. Obviously, the email wasn't from the creator of Craigslist and those who got fooled were taken for a ride.
Test Our Product and Get a Free iPad. A nice variation of the iPad Giveaway scam is the offer of a free iPad after doing some type of testing. The testing could be on an app -- including apps for popular websites like Twitter or Yahoo -- or on an expensive accessory. But don't be fooled. This is just another giveaway scam wrapped in a slightly different package. The first scam of this nature popped up around the same time the iPad was making its debut, with Facebook pages being created urging users to beta test the new Facebook app and keep the free iPad.
In-app Purchases. This isn't so much of a scam as it is an easy way to lose hold of your money without knowing it, especially if you have a young child who loves playing a freemium game. In-app purchases are often used by games to buy accessories, which can include extra currency in the game or other boosts to playing. The freemium model works on the premise that if you give basic gameplay away, players will be willing to spend more money on these extras than you would have made if you sold the game itself.
Remember: Just because a game is free doesn't mean the game is completely free. It's easy to avoid in-app purchases yourself, but if you aren't the only one using your iPad -- especially if a young child is using it -- the best way to protect yourself is to enable parental controls and turn off the option for in-app purchases.
Penny auction sites. Have you seen those advertisements that promise an iPad for $24.13? If you thought it was too good to be true, you are correct. Penny auction sites are a relatively new scam that work similar to a pyramid scheme without the pyramid. The trick here is that each time you bid it costs you money, so while that iPad may eventually sell for a very low amount, the amount of money the auction site collected on bid fees could be in the thousands of dollars. In fact, one of the most profitable areas for these companies is auctioning off a book of bids, whereby a coupon for 50 bids might fetch them several hundred dollars.
Anytime you have such a vast difference in the amount of money going to the site compared to the actual retail price of what they are selling, you most likely going to spend much more money than the product is worth. Is it possible to put down just one or two bids and be the last bidder? Sure. But you could also put down a hundred dollars on 23 in roulette and be the winner, but the chances of losing that hundred dollars just over 97%. And you actually have a much better chance of winning that roulette bid than you do of winning a penny auction bid in only a few bids.