Consumer Fraud: The Basics

Wherever You Turn - or Click - Someone May Be Waiting to Pick Your Pocket There are countless types of fraud prevalent in the world today, many of which occur via the Internet. Many of these attempts are targeted at gaining money from Internet users or businesses. Yet, with a little awareness, most fraud efforts can be easily avoided. Here are seven of the most common schemes.

Fraud using phishing emails, or fraudulent emails requesting personal information, is very common today, purportedly from online banks, eBay, PayPal, or other popular sites. These emails state that a user must login to fix a problem with their account, sometimes stating the account will be closed if not.

Organizations will never request your person information, so these emails are always fraudulent. To avoid phishing attacks, do not ever login using the linked website in the email. If there is still a concern, use you browser to type in your bank's website to check for reports or call them using a previously known telephone number.

Investment or Advanced-Fee Scams
These are the types of fraud related to Nigerian, or 419 scams. They often require the target to invest money up front in hopes of a high return on that investment. Often, these scams require more and more funding through an intricate story before the scam is realized.

These scams can be avoided by never sending money to an unknown source, for any reason -- no matter how convincing the story is.

Social Engineering
This a method of fraud used by hackers to gain sensitive information. Typically using phone calls or email, like in a help desk scam, login or other information is requested from someone pretending to be a member of an organization - IT support, for instance, asking for access to your account. Known personal information is often provided to increase believability in order to gain the desired information.

This type of fraud can be avoided by knowing that persons within your organization will never request any type of personal or work information. Any calls or emails of this nature should be reported immediately.

Credit Card Fraud
Credit card fraud is the most common method of fraud today. Credit card numbers can be gained using various methods, from online hacking to physical theft. With our high reliance on this easy method of payment, it often becomes hard to protect credit card numbers. Despite all of the insurance related to credit card fraud, it is still very important not to disclose your credit card information on websites that are not trusted. You can also use a credit card designated for online purchasing with a low limit, or reduce the overall usage of credit cards with high limits except when needed.

Counterfeit Money Orders
Counterfeit money orders are a threat today, especially from overseas sources. Money orders can be purchased and their dollar amount can be changed, with the actual money order appearing legitimate.

Money orders should not be considered more secure than a personal check, and they should be given time to make sure they clear, which is determined by the bank. Any products or reimbursements should not be shipped until the money order has cleared.

Wire Transfer Fraud
Wire transfer fraud is a less common scam where a buyer of a service or product requests your wire transfer information to send a payment. This information can sometimes be used to gain access to your funds and payment is never received.

These fraud attempts can be avoided by not accepting this method of payment. Credit cards or online payments are a more secure method over wire transfers, especially from personal buyers or overseas companies.

Internet Mass Marketing Fraud
Fraud can appear in the form of legitimate advertising of a product, typically found in website ads or spam. Sometimes ads seen on a website are not for a real product, and nothing is ever received after purchasing the product. Credit card information gained from the purchase can also be used for further fraudulent activity. These ads would typically appear on less popular websites, so the risk is reduced on high profile websites that have personnel to check their advertisers.

To reduce the risk of Internet Mass Marketing Fraud, always check the source of seller. International sellers pose a higher risk, though that's not always the case. Products such as pharmaceuticals and other pills are often a scam. Always stick to trusted shopping sources.

About the Author

Thomas Donchez

Thomas Donchez

Contributing Writer

Thomas Donchez is a graduate of East Stroudsburg University of Pennsylvania, where he earned a Bachelor of Science Degree in Computer Security and Computer Science. Tom is currently working toward his Masters Degree in Computer Science and resides near Allentown, PA.

With a strong background in computer security and great interest in current trends, Tom enjoys writing on security related topics. His recent research includes rootkit detection and advanced steganography methods, and his thesis work relates to network traffic analysis and reporting. Tom also spent three years as an ASP.NET web developer.

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