Perhaps the most significant factor in the evolution of how fraud is devised and conducted has been the internet. The rise of eCommerce, online banking, and social media have created vulnerabilities that cyber-fraudsters are eager to exploit. Even the tactics they use, social engineering, counterfeiting, and skimming for information, have all become easier with the help of the internet.

In this article, we’ll examine the ways technology and the internet are used by scammers, the warning signs you should look out for when browsing online, and what recourse is available if you fall victim to online fraud.

How Technology Has Simplified Fraud Techniques

First, let's look at some specific fraud tactics and how the internet has changed them.

1. Impersonation

Traditional Method: Many types of fraud involve a criminal making a personal connection to their target while pretending to be trustworthy. Traditionally, this is done in person or over the phone to solicit money or obtain more information about the target.

Internet Method: The internet has made it far easier for fraudsters to impersonate official and trustworthy persons or organizations. Cybercriminals can approach multiple targets at once using fake emails, social media profiles, or websites. These fakes can also appear even more convincing, as it's harder to spot the signs of impersonation when it's impossible to see or hear the fraudster.

2. Fake Documents

Traditional Method: Creating fake documents has long been a key tactic in scammers' repertories. IDs, passports, and checks can be used in identity theft, while false invoices or insurance documents convince victims to part with their details or money. Traditionally, this is done by hand.

Internet Method: Scammers can create highly convincing counterfeit documents by utilizing a combination of word processors and more sophisticated software. Several templates are available online to make this process even easier. Then, they distribute the documents digitally, adding another layer of deception.

3. Dumpster Diving 

Traditional Method: It sounds unbelievable since the internet method has become so common, but digging through a target's trash is an easy way for fraudsters to find personal details. Fraudsters look for things like letters, receipts, and even birthday cards. They then use this information to aid in identity theft or social engineering.

Internet Method: Finding information on someone using the internet is much easier than literal dumpster diving, as people often overshare on their social media profiles. This, combined with fake forms or surveys, allows fraudsters to learn everything they need to know quickly. The collected data is used to facilitate scams or is sold on online marketplaces.

4. Social Engineering

Traditional Method: Social engineering is the practice of manipulating an individual's emotions to gain information, rush payment, or generally gain their trust. Fraudsters may try to make their targets scared, worried, or angry. Traditionally, this had to be done through in-person meetings or over the phone.

Internet Method: Surprisingly, technology has made it much easier for fraudsters to employ social engineering. A forged overdue bill through your email, a fake text from a distressed family member, or even an anonymous comment on your social media are all effective social engineering methods employed by internet scammers.

Another thing to consider is the techniques that were not in use before the internet came to be but have been made possible thanks to technological advancements. Malware, ransomware, and hacking can be part of large-scale fraud attempts and are only possible thanks to vulnerabilities in software and devices we use every single day.

The Face of Internet Fraud 

Perhaps the most dangerous thing about fraud committed over the internet is that, more often than not, it has no face at all. While fraud pre-internet was usually carried out partially or entirely in person, the internet has removed this requirement. This makes spotting scammers even harder when they work online.

However, there are still some clear fraud warning signs that you should be on the lookout for when using the internet, like...

• Unsolicited contact: unexpected messages or calls from anonymous or unverified people.
• Requests for personal information: asking for sensitive details either out of the blue or for peculiar reasons.
• Urgency: Claims you must act quickly or not involve others in the situation.
• Too good to be true: offers of rewards, such as money or goods, that seem disproportionate to your involvement.
• Payment requests: asking for money quickly or requesting to be paid in unusual ways, such as via gift cards.
• Suspicious links or attachments: unfamiliar or strange links/files sent to you via email or text message, or that appear on an untrustworthy website.
• Poor grammar and spelling: mistakes in communication that indicate an individual is rushing or is not based where they claim to be.
• Pressure tactics: attempts to frustrate or make you anxious so you give up details or money.
• Inconsistent information: Details that don't match up either as a conversation progresses or when compared to verified facts.
• Poor compliance: Lack of privacy policy, cookies policy, payment policy, and terms and conditions on a website, or lack of profile picture or verification on social media.

The best thing about familiarizing yourself with the warning signs of online fraud is that you can use them to identify scammers. For example, if you suspect someone who contacted you out of the blue is trying to draw an emotional reaction from you, stay calm and involve a trusted third party to help you determine what to do. Or, if you click an ad on social media for extremely cheap items that take you to an eCommerce site with poor compliance, a quick search for the company's reviews is likely to reveal a scam.

Internet Fraud and Changing Laws 

With the internet playing a large role in modern-day fraud, government organizations and law enforcement agencies have had to adapt. This means finding new ways to catch cybercriminals and compensate victims.

If you find yourself a victim of fraud, don't panic. Some laws can offer recourse, including:

Computer Fraud and Abuse Act (CFAA): This act prohibits any unauthorized access to computers. Though it usually applies to large-scale attacks and is used to penalize cybercriminals, it makes hacking an offense and indirectly benefits past and potential victims.

Identity Theft and Assumption Deterrence Act: While this act first criminalized identity theft and fraud in 1998, its provisions are far-reaching enough that credit card fraud, mail fraud, and wire fraud committed partially or fully online are included in its remit.

CAN SPAM Act: Meaning 'Controlling the Assault of Non-Solicited Pornography and Marketing,' the CAN-SPAM Act regulates emails and online messages. If messages contain deceptive, misleading, or harmful information, senders can be fined up to $51,744.

Federal Trade Commission Act (FTC Act): Again, this act, passed over a century ago in 1914, has been updated to include fraudulent practices by eCommerce stores and organizations that operate online and through social media.

Children's Online Privacy Protection Act (COPPA): Children with access to their parents' information are uniquely vulnerable to online fraudsters. This act imposes requirements on websites aimed at children under 13 years old to protect their identities and data.

Fair Credit Reporting Act (FCRA): Ensures the privacy of personal details contained in the files of consumer reporting agencies. If an agency is found to be sharing details with potential online fraudsters, they can be subject to heavy penalties.

Additionally, you can contact the following organizations, either to seek any money or details you've lost or simply to warn them of a fraud attempt:

1. Your Bank 

If you've made a payment through online banking or transferred funds to a fraudster's account, your bank can reverse the payment. Make sure to act fast.

2. Your Security Software Provider 

Giving a cybercriminal remote access to your computer can feel like an irreversible mistake. But your security software provider will walk you through running a scan and deleting any malware. Make sure only to call the number provided on the official website or in your software handbook.

3. The FTC 

Even if you bet on a fraudster, it's worth reporting your experience to the FTC. This helps them gather data about common scams and any evolving threats, and decide the best means of protection. You can report to them here: https://reportfraud.ftc.gov/

Though knowledge of internet fraud and methods of helping victims recover stolen funds, details, and documents have improved, online crime is usually anonymous. Due to this, in many cases, victims simply have to live with the effects of fraud. This is why prevention is critical when it comes to online scams.

In Conclusion…

Always be on the lookout for signs of a scam. Don't hesitate to double-check the information provided to you online or put your foot down if something feels off. The internet has made it far easier for fraudsters to take advantage of you, so make sure you take the necessary steps to protect yourself. The face of fraud may have changed, but proactive measures and vigilance are still the best defense.

Sources and Resources

• https://www.fraud.com/post/the-history-and-evolution-of-fraud/
• https://www.vice.com/en/article/4awvqp/the-unstoppable-rise-of-the-internet-scammer
• https://www.forbes.com/sites/quora/2019/09/16/how-is-digital-fraud-becoming-more-sophisticated-as-technology-advances/
• https://fraud.net/d/dumpster-diving-2/
• https://www.idenfy.com/blog/document-forgery/
• https://resistant.ai/blog/document-fraud
• https://www.takefive-stopfraud.org.uk/advice/general-advice/impersonation-fraud/
• https://www.arborfcu.org/blog/10-warning-signs-its-fraud
• https://www.consumerfinance.gov/ask-cfpb/what-are-some-classic-warning-signs-of-possible-fraud-and-scams-en-2094/
• https://www.fionarobertsongraphics.co.uk/websites/website-legal-pages/
• https://legal.thomsonreuters.com/en/insights/articles/how-your-personal-information-is-protected-online
• https://www.kaspersky.com/resource-center/preemptive-safety/internet-laws

The post How The Face of Fraud Began to Change With the Introduction of The Internet appeared first on MoneyThumb.

Over the last few decades, we have witnessed extreme growth on the internet. It has become a very important part of our everyday lives. And although the internet provides some great services, such as allowing us the convenience of shopping, banking, investing, and entertainment, online criminals are benefiting from these modern conveniences in illegal ways.

In reports on internet fraud, the largest threat comes from phishing SCAMS. Besides phishing, the other threats listed in the top 10 included false billing, investment fraud, identity theft, online shopping scams, hacking, bogus lotteries, and identity theft.

Phishing

Phishing is pronounced 'fishing.' The definition of Phishing relates to how criminals will 'fish' for sensitive information from people online using illicit and illegitimate tactics. As an example, they might mimic a website to fool users of its legitimacy by the look and feel of it. In other words, a phisher poses as a legal, legitimate institution or person in order to fool people into revealing sensitive, personal information.  This could include credit card numbers, addresses, bank accounting information, and more.

They then use your personal information as something to sell on the black market. You will find that most phishing attempts are conducted over emails. So, if you receive what looks to be a credible email that asks you to take certain steps to proceed, or ask for money, there is a good chance that this email would redirect you to a phishing website intending harmful consequences. You must be very careful when opening a file in an email from someone you don't recognize. In fact, we'd warn against doing that at all. Only people and organizations you are familiar with should ever send you a file or attachment to open.

Malware

Another type of online fraud popular with cybercriminals is Malware, (malicious software.) Malware is produced by hackers normally as a program or a file that will be able to cause great harm to a website.  Malware attacks can lead to a loss of business and/or reputation for webmasters.

There are several ways that hackers use Malware. They can inject code or exploit a vulnerability on a website. Hackers didn't get that way by being dumb. Never underestimate the skills of a cybercriminal. Even though they are criminals, unfortunately, they are using their powers for evil rather than good. An online hacker is smart and Malware can often be installed illegitimately by bypassing website security using sneaky methods. Everyone should have protection in place from malware. Two of the most popular forms of online security protection come from Norton and McAfee, for the average user.

Investment Fraud

Like any good thing that comes along, something or someone will find a way to exploit it. That is what happened when investors moved onto the internet. Cybercriminals were quick to follow. These investment fraudsters either run away with the money or keep adding new conditions for the returns. Savvy investors can see them coming from a mile off, but if you are new to investing online, do your homework and learn from those who have been there and learn what sites to trust before you begin.

Credit Card Fraud

Unfortunately, we all know someone who has been the victim of credit card fraud or we have been the victim ourselves. This fact means you should always keep your credit card information safe when using it for any online purchases. Credit card hackers have several ways they use to get your information. One way is by replacing a legitimate form you are filling out with your credit card information with a phishing form, which collects your credit card info. Then the hackers sell your information on the black market or use your credit card information to make illegal purchases. Another one of their tricks is to manipulate the payment method. Then the payment by the customer does not reach the seller, it gets credited to the hacker. The worst part of this is that this kind of hack does not usually show up immediately, as the seller remains clueless unless someone reports a forgery.

Identity Theft

Identity theft occurs when someone uses someone else's identity to gain financial advantages or obtain credit and other benefits the victim has to offer due to their good name. This always causes the person whose identity has been stolen disadvantages or losses especially if they are falsely held responsible for the perpetrator's actions.

Lottery or Inheritance Scam

Most of us have received some sort of email saying we have won a million dollars or something close to it if you will only pay this certain amount of money. Other times a lottery scam is disguised as a promise that you have been left money in a will by a distant relative, or there is a huge business opportunity you are missing out on if only you will pay a small amount for receiving something. Anything remotely like these, beware: this is a scam. No genuine lottery draw asks for prior payments from the winner. The payment is made after all charges and fees have been deducted. These are just a few of the ways a scammer will try to extort money from you.

False Billing

This is a form of fraud where a cybercriminal comes up with fake reasons to invoice you. The scammers are clever, so they will find a way to make these reasons seem valid, as they are highly targeted to customers by their current online needs and choices. An example would be license renewal requests being sent to people with vehicles, or a Paypal invoice for something you could have bought but didn't.

Protecting Yourself Against Online Fraud

As you can see from our list above of the major different types of online fraud, the internet can be a dangerous place. You must be vigilant in protecting your privacy and your personal information. Below are some of the best practices for a safer online experience.

1) Be more of a private person online.

Keep your social media account privacy settings on the stricter side. Be slow to offer your personal information to anyone online unless it is someone or a business dealing with those you know and trust. Don't accept all friend or connection requests, or engage in private messaging with a stranger unless you have a good reason. Many scammers will take the social media route to try and fool people.

2) Change passwords often.

The internet has constantly lurking bad bots and crawlers. These bad bots and crawlers try to get past your website/account’s security with the technology the hackers have created. This process, in cybersecurity terms, is called brute force. A unique password with upper case letters, lower case letters, numbers, symbols, etc. makes for a strong password. But, you should still make sure to change passwords regularly in the case that they have been infiltrated.

3) Update software/websites regularly.

Many people overlook this simple task, but just updating your website to the latest versions can reduce the risks of it getting compromised. Moreover, updates are nothing but mended and patched versions of the discovered vulnerabilities. Hence, using an outdated version of a website/plugin/theme/software with a publicly known vulnerability could leave your website in grave danger of being exploited. Always be prompt with updates.

4) Be wary of unsolicited emails/messages.

The internet is teeming with messages and emails from unknown & unverified senders. Take the information provided in these unsolicited emails with a grain of salt. They seldom are true and legitimate.

5) Get a security solution.

If you are an individual who uses the internet mostly for shopping and entertainment, basic protection from sites like Norton and McAfee is usually sufficient for your safety online. If you are a website owner, solidifying your website’s security with a premium security solution is recommended. A rock-solid firewall leverages continuous and comprehensive protection to your website and takes you one step closer to security. A good security solution shields your website from SQLi, bad bots, XSS, CSRF, OWASP Top 10 & 100+ other coming threats. It monitors your website 24/7 and has a pretty easy to manage dashboard.

Clearly, the internet is intertwined in our day-to-day lives. To be honest, we cannot do without it, so shutting it off completely is not an option. Instead, we need to be cleverer than the scammers. Be aware of their tactics and strive to have more secure cyberspace.

Sources: https://blog.shift4shop.com/types-of-internet-fraud, https://en.wikipedia.org/wiki/Internet_fraud

The post Most Common Types of Online Fraud and How to Avoid Them appeared first on MoneyThumb.