Internet Fraud
What is Internet fraud?
Generally, any type of fraud scheme that uses one or more components
of the Internet – such as chat rooms, email, message boards or
Web sites – 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.
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What are the major types of online Internet fraud?
Auctions
and retail schemes, online auctions being the number one avenue
for Internet fraud- Business
opportunity/"work-at-home" schemes
- Identity
theft and fraud
- Investment
schemes
- Credit
card offers
- Credit
repair
- Vacation
prize promotions
- Nigerian
money offers – This scheme involves someone claiming to
be a Nigerian official, who promises big profits in exchange
for help moving large sums of money out of their country
- Advance
fee loans
- Internet
access services
- Health
and diet scams
- Free
goods, like long distance phone cards, computers, electronics,
etc.
- Cable
descrambler kits
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What is being done to combat Internet fraud?
The Department of Justice
- Prosecutes cases throughout the country against individuals and groups who have engaged in a
variety of types of Internet fraud
The Internet Fraud Initiative – a joint initiative between the
Department of Justice, Federal Trade Commission, Federal Bureau of Investigation and the National
Advocacy Center
- Develops information on the nature and scope of the problem
- Develops and provides training for prosecutors
- Establishes a program of public education
The Federal Trade Commission (FTC) – has authority to bring civil
lawsuits to federal district courts. Since 1994, the FTC has brought more than 140 law enforcement actions
against more than 490 companies and individuals.
- FTC Surf Days – the FTC, along with other state and federal agencies, searches the Internet for
sites containing deceptive claims. The site operators then receive warnings
- Teaser Sites – fake scams constructed by FTC staff. As a consumer clicks through the site a
warning eventually appears stating, "If you respond to an advertisement like this, you could get
scammed!"
Consumers Fraud Sentinel Database
- Provides secure Internet access to more than 220,000 consumer complaints for more than 200 law enforcement
organizations across the United States and Canada
National Cyber Security Alliance (NCSA) – joint effort between
industry and the government to foster awareness of cyber security through educational outreach and
public awareness
What precautions can I take to secure my personal and credit information?
- Keep your personal information private
- Be especially careful about online communications with someone who conceals his true identity
- Use a secure browser
- Use inexpensive filtering software to filter programs to protect your family from inappropriate sites
- Pay your bills online with credit card instead of using personal checks
- Review your telephone bill and other bills and challenge any charges that you don't recognize
What precautions can I take when conducting business online?
Beware of
offers that sound too good to be true- Watch out for "advance fee" demands
- Take your time in making investment decisions, researching the potential investment opportunity thoroughly
- Have an attorney or accountant look at any proposed contracts
- Call every supplier or customer of the company and verify that they really do business with the company
- Check out the people running the company
- Contact your local consumer protection agency and the consumer protection agency in the city where the
company is headquartered for more information about the company
- Interview business references in person at the place of business if possible and try and get a number of
names to choose from. This will help you avoid talking with people who were paid to give favorable responses.
- Get earnings claims in writing when considering Internet-related business opportunities
- Get references on any travel companies and get details about the trip in writing, including the
cancellation policy
- Consult with health-care professionals before buying any "cure-all" that claims to cure an ailment
quickly or offers easy solutions to a serious illness
What precautions should I take when shopping online?
- Keep your password(s) private
- Don't judge item by initial appearances posted online
- Check out the seller, especially when shopping online auction sites
- Shop with companies that you know or at least know who you are dealing with; make sure that the company
is legitimate
- Get all the details involved before making an Internet transaction, such as complete descriptions, total
price, return policy, etc.
- Ask your credit card issuer about "substitute" or "single-use" credit card numbers – these allow
you to use your credit card without putting your real account number online
- Only share credit card information when buying from a company that you trust
- Pay by credit or charge card online, because you have a legal right to dispute charges for goods and
services that were never ordered or received
- Keep a record for proof of the transaction
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How can I file a complaint about Internet fraud?
You can file complaints about specific types of fraud with the following agencies:
If you think that you've been the victim of a fraud scheme that involved the Internet, you can
also file a complaint online with the Internet Fraud Complaint Center, a joint project of the FBI and
the National White Collar Crime Center.
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How can I get more information about Internet fraud?
Government Web sites
Nongovernmental Web sites
(Courtesy of George Washington University Police Department.)
