How to Sue for Internet Fraud

By Sue Sponte

With the growth of the internet for commerce, complaints for Internet fraud have grown as well. Unlike fraud complaints against local businesses or people, suing over a fraudulent Internet transaction is complicated by the difficulty of finding the fraudster who might be far away and convincing your local courts to exert jurisdiction over that person. Although it is an uphill battle, it is possible to successfully sue for Internet fraud.

Step 1

Decide whether to use a lawyer or to sue without a lawyer. The cost of using a lawyer might be more than the amount of the fraud. Many attorneys will give an initial consultation for free and help figure out if the cost of their services will be worth it based on the facts of the individual case. For fraud disputes measured in the hundreds of dollars or less, it is highly unlikely that using an attorney will be cost-effective. In that case, move forward by suing in small claims court.

Step 2

Identify the defendant. Internet fraud complaints are harder to start because of the ease of hiding your identity on the Internet. Before you can begin a lawsuit, you need to figure out who you are suing. This can take some detective work. One option is to scour the website to locate contact information for the person or company that runs the site. Another option is the check with your credit card company, if you used one, to see who shows up on your bill as the merchant for the fraudulent transaction. If those routes do not work, you can use an Internet "Whois" search to find the identity of the company or person who owns the registration of the website in question. Armed with a name and a state where the business is located, you can often search for a business address by searching the Secretary of State's website for that particular state.

Step 3

Establish jurisdiction over the defendant. Courts will only entertain lawsuits if the state has jurisdiction over the defendant. In the past, it was difficult to sue an out-of-state defendant because the courts were reluctant to grant personal jurisdiction. That doctrine has evolved over time, with many states allowing expanded jurisdiction and even passing laws called "long arm" jurisdiction statutes to allow residents of one state to sue out-of-state people and companies at home, without having to travel to a court near the defendant. Because the exact circumstances for long arm jurisdiction will vary from state to state, check for your local rule. A comparison of the long arm rules for all states is included in Resources.

Step 4

Gather evidence. A successful fraud case will usually require proving that the defendant engaged in a "materially false" statement or omission in order to convince a victim to part with money or property and that the victim actually suffered damages. A material statement is something that would make a difference between somebody falling for the scheme or seeing through it. Therefore, not all lies are frauds. They must be serious enough that they impact whether the victim falls for it. To make your case, gather up all proof that you can about what promises were made and how they were not kept. For example, locate receipts, emails, phone records, credit card statements and printouts of pages of a website. Anything related to the transaction that will help you to say, "This is what was promised, this is why I believed it, and this is the harm that I suffered because of it," is relevant to your case as evidence.

Step 5

Sue in small claims court. The exact procedures vary from state to state and even from county to county within a state. Because small claims courts are meant to be for people who do not have training in the law, many of them have simple instructions for filing cases. Contact the clerk of the small claims court in your county for assistance. You will almost always have to pay a fee to open the case, but you might be able to recover that if you win.

Step 6

Serve notice of the lawsuit on the defendant. Finally, you need to provide notice to the fraudster that he is being sued. Along with the long arm jurisdiction statutes, states have also adopted varying procedures for the proper way to serve notice on the defendant. Those various methods are explained in the survey of long arm laws in Resources. Many states will allow service by mail, as long as the method of mailing will result in proof of delivery, such as certified mail. Other states require personal service by a process server in the jurisdiction where the defendant is located.

Tips & Warnings

  • Successfully suing and winning is only the first hurdle. Especially for companies located outside the state, you will also have to find a way to enforce the judgment that you win. Although the other state must generally enforce a money judgment, the costs for filing another suit to enforce the original judgment might end up being more than the amount in dispute.