Internet investor

The same rules apply in cyberspace as elsewhere: be sure the small print makes sense

It was only a couple of weeks ago that I was saying that the Internet is not a mature medium. It is not. Furthermore, there has been proof this month that the people who use it are apparently not too mature either. I am not referring to the teenage cybernerds who look at web pornography but rather to the gullible twits who handed over a total of pounds 18m to a spurious "Bank Debenture Trading Programme" which was being promoted over the Internet.

The International Chamber of Commerce's London-based Commercial Crime Bureau reports that US and Canadian investors were told that few people would qualify for these investment opportunities, which were "by invitation only". Transactions were said to be kept strictly confidential by all parties, for which reason no client references were available. You can find out more about how this particular scam worked on the International Chamber of Commerce's website.

Your internal alarm bells would ring madly if somebody came up to you in the street with an excellent investment opportunity which is by invitation only and which had no references or track record. Remember the simple investment rule. If something looks too good to be true, it probably is. Further, just because something is offered on the Internet, that doesn't of itself make it better than products offered elsewhere, and it should still be understandable! Do not allow yourself to be baffled by cod science.

What the Internet can be is an incredibly powerful and cheap research tool to allow you to find out more about your potential investments. Here's another old financial saw - invest in what you know. Which is all very well but few of us will know much about more than a handful of companies. So where to find out more?

One useful starting point is CAROL, which is a free service offering Company Annual Reports On-Line. It is run by the investor relations department of March Communications, a public relations company, and is a set of links to corporate websites offering background information and details of financial performance. More than 80 companies in the FT-SE 100 now publish at least part of their annual report and accounts information on the Internet, compared to just 29 this time last year.

Where the web can definitely score is on speed and ease of access. For example, Legal & General is offering immediate temporary health insurance cover. All you need to do is complete and submit the on-line form and in return you get 14 days' temporary cover for Legal & General's Lifetime Essentials HealthCare. When you submit the form the website displays a certificate of temporary cover, which you need to print or save for your own information. Cover begins from midnight on the day you apply and continues for 14 days.

Admittedly the rest of the process relies on what the netheads call snail- mail. You will be sent full documentation explaining the cover you have chosen and an application form. If you decide to take out the policy the cover will continue and you will be charged accordingly. If you decide not to proceed with the policy, then cover will lapse without charge, provided that a claim has not been made.

Another recent addition to the insurance policies available on the Internet is Eagle Star Direct's travel insurance. Individuals, couples and families can purchase annual or single-trip cover from the travel insurance site. Unlike some other web offerings, this site allows you to get a quotation and full policy information, have the option to store the quote, and then purchase the product while on-line.

Eagle Star Direct was the first insurer to offer motor insurance direct on the net. Several companies promote travel insurance and some offer quotations by e-mail. However, only one other group, the Halifax, sells travel insurance direct over the Internet. Strangely enough, the Halifax Travel Insurance Service is underwritten by Home & Overseas Insurance, a subsidiary of Eagle Star.

International Chamber of Commerce: www.iccwbo.org CAROL: www.carol.co.uk Legal & General: www.legal-and-general.co.uk Eagle Star Direct: www.eaglestardirect. co.uk Halifax: www.halifax.co.uk