Internet fraud has been an increasing concern for civilians and law-enforcement agencies, ever since the launch of the Internet. Tracking hackers is difficult and catching Internet frauds is even more challenging, the best protection is to avoid fraud attempts. The first part of sidestepping identity theft, viruses and other intrusions is being able to identify fraud when you see it.
Internet Auction Fraud and Non-Delivery of Merchandise
Internet auction fraud is a prevalent scam that targets consumers on auction websites such as eBay. Typically, this scam will consist of someone posting a product for sale on an auction site to “sell” the product to the highest bidder. The product, however, is either nonexistent or not the product described on the auction site. Scammers will try to collect the full funds from the winning bidder before shipping the product. This is typically facilitated via a money wire transfer, and the seller will ask for funds to be sent to a third party.
In the instances where scammers ship a product to the buyer, the scammer will send a product of vastly lower value than what was purchased. The shipment will need to be signed for, which obligates the buyer to pay in full for the product, even though it isn’t the promised item. This is known as the Non-Delivery of Merchandise scam.
Spam and Identity Theft
Spam is implicated in a common form of fraud, in which bulk emails are dispersed to millions of email addresses in an effort to corrupt people’s computers, steal identities or pull unknowing individuals into paying for fraudulent products or services.
A spam message will offer any number of false dealings to recipients. Popular offerings including low-interest loans, free credit report checks, sweepstake winnings and relationships with “local” singles. These types of scams require people to open a message and click on a link. This opens up the computer to a virus, worm or other “bug” that will corrupt the computer. In cases of identity theft, the bug will attempt to retrieve passwords, Social Security numbers, credit card information, home addresses and telephone numbers. Other bugs will embed themselves in the computer’s registry and damage system performance.
Credit Card Fraud
This scam requests that a consumer registers or inputs credit card information on a fraudulent website. The site may sell products or services. When a reputable, trustworthy vendor asks for credit card information, it won’t save the data without user permission and will take steps to keep user information safe. Fraudulent sites will ask for the same information as does a reputable site, but will steal the information and make purchases using the data the credit card owner gave to the website.
Forms of Investment Fraud
Various investment schemes typically target stock investors, trying to steal money and investors’ identities. Some of these scams will come in the form of an online newsletter. In these newsletters, frauds will offer inside information on stocks, for a fee, and offer false data instead of real information.
Online bulletin boards have also become a hotbed of fraudulent activity. Companies often use online bulletin boards to publish information; however, a bogus board will release disinformation.
A pump and dump scheme can start with a fraudulent newsletter or bulletin board where secret or private information is offered. The object of this scheme is to alter stock values. After effectively hindering a stock, the schemer will sell his or her own stock in a timely fashion for personal gain.