Online Fraud

 

          These three men, (from left) Alan Shemesh, Michael Reitblat,  and Liron Damr own Forter, an anti-fraud company which just reported raising $15 million in funding to support their efforts. Photo courtesy of venturebeat.com,

Online Fraud is defined as any form of fraud scheme that makes use of emails, websites, chat rooms, or message boards to either present fraudulent solicitation to potential victims, conduct fraudulent transactions, or transmit the proceeds of any fraud to a financial institution or to another party involved in the fraud scheme.  According to the FBI website, there are many common forms online fraud, and each is equally dangerous. Knowing about the types of fraud and how to avoid them is the best way to keep yourself protected. Have a look below to learn more about a few of the most common types of online fraud.

Internet Banking Fraud

This form of fraud is just as the name suggests, any fraud involving the illegal transfer of money from one financial institution to another. This can be done in a couple of different ways. Mobile banking is one of the more common methods. Banks these days use very strong and sophisticated security systems to protect your accounts, and criminals know this all too well. For this reason, their focus shifts away from attacking the bank itself and more towards getting personal details directly from you. Whether you use your computer, mobile phone, or a tablet, they will use a number of schemes to try and trick you into revealing personal information so that they can access your accounts with ease.

Phishing is a form of bank fraud that involved a particular type of spam email. Criminals will emails that contain links to what appears to be a banking website. They send them out randomly hoping someone will click in and fall for their trick. Once the link is clicked, the victim will be directed to the site where they’ll be asked to enter their login details, but in truth a malicious program is activated that tracks their keystrokes. This allows the  criminals to extract their login information and use it for their own gain. Be very cautious about any email that you’re not completely sure about. Anti-spam filters in email are a great help in blocking these out, and many current anti-virus and internet security programs have a feature that can detect and block phishing activity.

Mule recruitment is another form of banking fraud and is a bit more complicated. Still, it is a big threat and should not be taken lightly. Have a look at the below infographic for more information.

mule-recruitment

Shopping and Auction Site Fraud

Some fraud takes place during online shopping or auctions. Not every website is legitimate. Some websites you go to to buy various good or services and of course you have to provide credit card or debit card information to complete the purchase. Some of these sites don’t actually complete a purchase. Instead, they just record your information and  the criminals behind the scam will then be able to use it to make fraudulent purchases of their own. For this reason, it is of vital importance that you verify the site is legitimate before entering any payment information. Even better, you can make yourself a Paypal account which will secure your payment details. Then you can simply make purchases only on sites that include Paypal as a payment option. It’s far better to be safe than sorry.

Scams

There are other types of scams including the “Nigerian Letter”, “419”, and a number of “lottery” scams. Most of these scams come via email and promise a large amount of money as a prize, but there’s a catch. In order to claim the prize, you have to provide some information for where to send it and also pay some ‘fees’ needed to process the transaction. If you surrender the information and pay the fees, you’ll lose money and no prize will come your way.

Spam

Spam emails take many forms, not just the ones discussed above. Some try to acquire personal information. Others are scams trying to get you to purchase a particular product or service, or make an investment to a fake company or “get rich quick” scheme which will only cost you money in the long run. Make sure you’re email provider has a good spam filter and if you receive an email that you don’t recognize, mark it as spam so that you won’t see it pop up in your regular inbox again.

Identity Theft

This is one of the most heinous and hurtful forms of fraud. This fraud doesn’t just take your bank details or credit card information. The criminals basically assume your identity using personal information gleaned from the scams they used to victimize you. Then they can take out credit cards in your name, run up high bills, and ruin your credit rating. When the bad credit requires legal action, it’s you that will be targeted, not the scammers. For this reason, you can never be too careful with your personal information Don’t ever give out details to anyone or on any website you don’t completely trust.

Be aware of all the different types of online fraud and make sure you take the necessary steps to keep yourself out of trouble and help your loved ones to do the same. The FBI has a comprehensive list of steps you can take to prevent some of the different types of online fraud. Click here to have a look!

Resources

Credit card fraud

About credit card fraud
http://en.wikipedia.org/wiki/Credit_card_fraud
Protecting yourself
http://www.biz.org.nz/public/content.aspx?sectionid=75&contentid=399
http://www.antifraud.com/tips.htm
http://www.wiscocomputing.com/articles/ccfraud.htm
http://www.paypal.com/cgi-bin/webscr?cmd=_fraud-tips-sellers-outside
http://onlinebusiness.about.com/od/paymentprocessing/a/fraudsigns.htm
http://www.tamingthebeast.net/articles2/card-fraud-strategies.htm
Importance of credit card fraud protection
http://www.verisign.com/
The Merchant 911 website
http://www.merchant911.org/

Credit card verification

The AVS verification system
http://www.tconsult.com/address_verification.aspx
The CVV2 verification system
http://www.visa.ca/en/personal/shop_cvv2.cfm
The SecureCode validation system
http://www.mastercardmerchant.com/securecode/

Phishing

Learn more about phishing and how to avoid it
http://www.mailfrontier.com/docs/field_guide.pdf
http://www.shef.ac.uk/cics/security/phishing.html

Pagejacking

Identifying pagejackers and dealing with them
http://www.tamingthebeast.net/articles4/pagejacking.htm

Advance fee fraud

http://www.secretservice.gov/alert419.shtml
http://www.tamingthebeast.net/articles5/nigerian-scams-ecommerce.htm

Intellectual property fraud

http://www.usdoj.gov/criminal/cybercrime/AshcroftRemarks042204.htm
http://ezinearticles.com/

Online identity theft

http://www.tamingthebeast.net/articles/creditcardfraudidentitytheft.htm

Escrow

an alternative payment system for large international transactions
About escrow
https://www.escrow.com/index.asp
http://www.a-e-a.org/
About escrow fraud
https://www.escrow.com/fic/index.asp

Postal money orders

http://www.usps.com/postalinspectors/moalert.htm
See the difference between fake and genuine
http://www.usps.com/postalinspectors/mofeatur.jpg

Online auction fraud

Lots of information about online auction fraud in this downloadable pdf file
http://www.ifccfbi.gov/strategy/AuctionFraudReport.pdf

Maxmind

http://www.maxmind.com/

General resources

Ecommerce fraud
http://www.knowledgeleader.com/
Internet fraud
http://en.wikipedia.org/wiki/Internet_fraud
More about different online frauds, including rigged auctions, investment scams, etc
http://pcworld.about.com/magazine/1905p107id44671.htm
http://www.canadiancontent.net/dir/Top/Society/Issues/Fraud/Internet/
Fraud information and reporting in the US
http://www.fraud.org/
High risk countries of 2004
http://www.msnbc.msn.com/id/4648378/

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