Internet Fraud

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An Internet fraud is the use of Internet services or software with Internet access to defraud victims or to otherwise take advantage of them; for example, by stealing personal information, which can even lead to identity theft. A very common form of Internet fraud is the distribution of rogue security software. Internet services can be used to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of fraud to financial institutions or to others connected with the scheme.

Internet fraud can occur in chat rooms, email, message boards, or on websites.

Various types of internet frauds are

• Purchase frauds – Purchase fraud occurs when a criminal approaches a merchant and proposes a business transaction, and then uses fraudulent means to pay for it, using such as a stolen or fake credit card. As a result, merchants do not get paid for the sale. Merchants who accept credit cards may receive a chargeback for the transaction and lose money as a result. The most common fraud is taken place using credit cards this is when the account numbers and PIN numbers are obtained by malicious people. When a transaction is done and they use this information to withdraw money from this person, e.g.: a person named Kushela does a transaction using a credit card with a buyer. During this transaction people may steal this buyers identity and act as him and request payment to an offshore account with an excuse that isn’t verified to be true and just an excuse to steal the said credit card. An example of a fraudulent purchase transaction:
• Business opportunity or “Work-at-Home” schemes – Con artists often use the Internet to advertise supposed business opportunities that allow individuals to earn thousands of dollars a month in “work-at-home” ventures. These schemes typically require the individuals to pay nominal to substantial sums for the “business plans” or other materials. The fraudsters then fail to deliver the promised materials, provide inadequate information to make a viable business, or provide information readily available for free or a substantially lower cost elsewhere. In one such scheme, after paying a registration fee the victim will be sent advice on how to place ads, similar to the one that recruited him, in order to recruit others. This is a form of Ponzi scheme.
• Money transfer fraud – Money transfer fraud consists of an offer of employment transferring money to a foreign company, supposedly because it costs too much to do it through other methods. The prospective victim receives an email for same.
• Dating fraud – With dating fraud, often the con artist develops a relationship with their victim through an online dating site and convinces the victim to send money to the fraudster. The requests for money can be a one-time event, or repeated over an extended period of time.
• Charity fraud – The scammer poses as a charitable organization soliciting donations to help the victims of a natural disaster, terrorist attack (such as the Sept. 11 World Trade Center attack), regional conflict, or epidemic. Hurricane Katrina and the 2004 tsunami were popular targets of scammers perpetrating charity scams; other more timeless scam charities purport to be raising money for cancer, AIDS or Ebola virus research, children’s orphanages (the scammer pretends to work for the orphanage or a non-profit associated with it), or impersonates charities such as the Red Cross or United Way. The scammer asks for donations, often linking to online news articles to strengthen their story of a funds drive. The scammer’s victims are charitable people who believe they are helping a worthy cause and expect nothing in return. Once sent, the money is gone and the scammer often disappears, though many attempt to keep the scam going by asking for a series of payments. The victim may sometimes find themselves in legal trouble after deducting their supposed donations from their income taxes.
• International Modem Dialing – Customers of dial-up Internet service providers, such as AOL, use a modem to dial a local telephone number in order to connect to the Internet. Some web sites, typically containing adult content, trick consumers into paying to view content on their web site by convincing them to unwittingly make international telephone calls with their modem.
• Often these sites claim to be free, and advertise that no credit card is needed to view the site. They prompt the user to download a “viewer” or “dialer” program to allow them to view the content. Once the program is downloaded, it disconnects the computer from the victim’s usual Internet service provider and dials an international long-distance or premium-rate number, charging unexpectedly high rates to the victim’s long-distance phone bill.
• Internet Marketing and Retail Fraud – It is a fast-growing area perpetrated by dishonest internet marketing and retail sites involving a variety of products and services. The victim is tricked, by a legitimate-looking site and effective marketing, into giving their credit card information and [card security code] (or sending funds by other means) in exchange for what they believe to be goods or services. The goods never arrive, turn out to be fake, or are products worth less than those advertised.
• Where a credit card is involved, the perpetrators may also use the customer’s credit card information to obtain cash or to make purchases of their own. A common example of this type of fraud would be pornographic websites that advertise free access, but require a credit card “for age verification purposes only”. The scammers use the credit card information to make fraudulent charges. Internet marketing and retail fraud involving health products may sell fake or worthless goods. These products might advertise a quick way to lose weight, a cure for a serious disease, or make other sensational claims.
• Phishing – It is the act of masquerading as a trustworthy person or business to fraudulently acquire sensitive information, such as passwords and credit card details, that a victim might think reasonable to share with such an entity. Phishing usually involves seemingly official electronic notifications or messages, such as e-mails or instant messages. It is a form of social engineering.
• Email Spoofing – Sender data shown in emails can be “spoofed”, displaying a fake return address on outgoing email to hide the true origin of the message, therefore protecting it from being traced. The Sender Policy Framework protocol helps to combat email spoofing.
• Pharming – It occurs when a hacker redirects website traffic from a legitimate website to the hacker’s fraudulent website by exploiting vulnerabilities in the DNS. By constructing a fake web site that looks like a legitimate site that might ask for the user’s personal information, such as a copy of a bank’s website, the fraudster can “phish”, or steal by means of false pretenses, a victim’s passwords, PIN or bank account number. The combination of domain hijacking with a phishing website constitutes farming.

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