Frauds, Scams and Slams: Internet Fraud

How Big Is The Internet Fraud Issue?

37.5 million inquiries in 6 months

Most common complaints

Internet auctions

Undelivered merchandise

Credit card fraud

How Big Is The Internet Fraud Issue?

The Internet offers consumers access to mass amounts of information, broad choices for shoppers, and easy ways to conduct everyday business transactions. Likewise, con artists recognize the potential of using the Internet to carry out the same fraudulent scams as conducted through the telephone and the mail. Continuous development of new technologies and sophisticated software makes it possible to commit new and innovative online crimes against unwary consumers.

The Internet Fraud Complaint Center began taking complaints on May 8, 2000. In the first six months of operation, 37.5 million persons had visited the site, 20,014 filings were made and 6,087 complaints of fraud were referred to law enforcement and regulatory agencies around the world. Two thirds of all the complaints involved auction fraud, followed by non-delivered merchandise at 23 percent, Credit and debit card fraud at 5 percent, other confidence fraud such as home improvement, multi-level marketing and investment scams were at 5 percent. Overall the mean loss to each consumer was $1259. The largest loss reported was $366,248. In Oklahoma, 13 percent of the fraud complaints from consumers related to Internet services and computer issues. Of the fraudulent complaints against Oklahoma Companies, 21 percent related to Internet auctions and 13 percent involved Internet services and computer complaints.

One of the Newest Internet Frauds

Computer Generated Charges

Internet Fraud

One of the newer frauds to surface is using the web to deliver computer-generated phone charges. Consumers can download a program from the web on the Internet to view pictures and later receive a huge telephone bill for international calls they never made. Unfortunately, the computer user did not know that the downloaded program was designed to disconnect their computers from their regular Internet service provider and reconnect them to the Internet through a phone number in Moldova, a part of the former Soviet Union. So a word of caution! Don’t download programs for websites unless you know that you are dealing with a reputable site.

Take caution with Internet Account Updates! When you receive an e-mail message that appears to be from your Internet Service Provider saying that your account information needs to be updated or that a credit card you used was invalid or expired and the information needs to be reentered, DON’T. Call your Internet Service Provider and inquire whether the e-mail was theirs. This will also alert the Internet Provider of the possibility that their service is being scammed.

Tips for Shopping on the Web

· Secure sites

· Companies you know and trust

· Check out the company

· Is the company licensed

· Say No to unsolicited ads

Tips for Shopping on the Web

· Shop at secure sites.

· Shop only with reputable companies that you know about.

· Know where the company is located.

· Before you buy from an online company, for the first time, request a catalog and look over the merchandise carefully.

· Note of their return and refund policies, and other services.

· Look for a description about their security procedures. If none are given, e-mail the company and ask for that information.

· Most reputable companies will post a privacy policy on the Web site.

· Use a secure browser, one that scrambles purchase information sent online. Computers come installed with a browser but additional free browsers can be downloaded from the Internet.

· Check whether the company is licensed or registered, and with whom.

· Never give your credit card number or bank account number unless you know the company is legitimate.

· Don’t be taken in by a nice website, (just as you wouldn’t judge a book by it’s cover).

· Do not respond to unsolicited ads on e-mail.

· Use a credit card or charge card.

The Fair Credit Billing Act protects online transactions. Consumers have the right to dispute charges and withhold payments until the creditor investigates the disputed charges. In the event that someone fraudulently intercepts and uses the card the consumer is liable for only $50 of any charges.

· Keep a copy of online orders.

Always print an order for merchandise and keep in your files, along with the order confirmation number. Online orders are covered by federal law Mail and Telephone Order Merchandise Rule. According to this rule, merchandise must be delivered within days unless other wise stated. If merchandise is delayed or back ordered, the company must notify you of the expected delivery date.

Maintain Privacy on the Web

· Safeguard passwords

· Personal Information

· Opt-Out-Option

· Caution about downloading programs

Maintain Privacy on the Web

Most online companies use software to collect information about you and may in turn sell that information to others. It is prudent that you take measures to protect your private information so that it isn’t shared with the world.

Safeguard passwords: Never give your password to anyone. Be creative, use at least an 8-character password that is not identifiable to you. Use combinations of letters and numbers. Never use a password based on a word from the dictionary. For example, a pet’s names, Prandell2, your favorite flowers, 4iris, or names of fruits, or vegetables. Never use any portion of your Social Security number, telephone number, nor family names or birth dates.

Personal Information: Deal only with reputable companies. Do not share any personal information such as name, address, telephone number, e-mail address, or Social Security Number unless you know what information is being collected, how it will be used and by whom. Caution your children and grandchildren not to disclose any personal information over the Web unless they check with you first.

Be cautious of what you download: Don’t download programs for music, pictures, cartoons, jokes, etc unless you know the integrity of the company.

Opt-Out-option: You can elect not to have your information shared with others over the Internet, just as you can with companies who use mail and telephone marketing services. Look for this option in the company’s privacy policy.

Sample Opt-Out Form Letter

Sample Opt-Out Form Letter

Company Name

Company Address

RE Account Number:

Please be informed: I want to take advantage of the Opt-Out Option. Here are my instructions regarding the sharing or selling of information about my account or my personal information.

· You do not have my permission to sell or share my information with unaffiliated third parties.

· You do not have my permission to share my credit history or credit worthiness with any affiliate of your company.

· I do not want to get unsolicited sales offers from your company.

· Please remove my name from all of your marketing lists and from your databases.

· Please notify me that you have received this letter.

Your name

Signature

Address

How Much Can Internet Companies Learn While You Surf?

· Personal tastes

· Gender

· Telephone numbers

· Habits

· Interests

· Purchase history

· Sites you have searched

How Much Can Internet Companies Learn While You Surf?

Remember, thanks to cookies, web sites will recognize you when you visit a second time. They will know where you visited on their site, and also the length of your visit.

· Your likes

· Your dislikes

· Gender

· Home and work telephone number

· Your habits

· Purchase history

· Products searched for

The information gleaned from by snooping in your computer and tracking your surfing can be sold to both legitimate marketers and con artists who can create a profile of your personal information.

Activity: What Does the Internet Know About You?

· Search by name

· Telephone number

· Address

· Part of Social Security Number

Activity: What does the Internet know about you?

Privacy experts recommend that you periodically search your private information and see what’s out there. Search Google.com, Search Engine Watch.com, AltaVista, Ask Jeeves.com or other search engines. Some companies, such as Super Exhaustive Search, charge a fee. Try searching and see what comes up. You may be surprised. You very likely will find information, such as Social Security Numbers, Vehicle Identification Numbers, cars registered to all the people who have lived at your address, names of people who ever lived at your address, whether or not you own a gun, boat, airplane, ever filed for bankruptcy, have a professional license, have ever registered a trademark or patent or other information you would just as soon not have on the Web.

Try several different approaches.

· Try all variations of your name Example William J. Jones, Bill Jones, Bill J. Jones, Will Jones, Will J. Jones, even Jones, William etc.

· Search the first 8 digits of a credit card number (DO NOT USE ANY MORE THAN 8) You may find your credit card number out here somewhere.

· Try pieces of your Social Security Number (NEVER PUT IN THE WHOLE NUMBER).

· Try various combinations of your address or zip code.

· Try your telephone number written in a variety of ways 210-444-1010, or 201 444 1010.

One piece of information can lead to additional personal information about you. For example, a telephone number may lead to your home address. Even unlisted numbers turn up sometimes along with your address, past addresses, past telephone numbers Etc.

Ways Personal Information Gets on Web

· File-Sharing Network

· Downloading certain information -- music

· Snoop software

Some Ways that Personal Information Gets on the Web?

· File-Sharing Network —Someone signs up for an Internet service, such as a music-swapping program and later learns that by doing so this allowed your computer file to be accessed by a file-sharing network.

· If you use file-sharing programs, be careful because what information on your computer can be shared to the world

· Be cautions about downloading music, pictures, cartoons, or jokes

How to Protect Personal Information

· Say No

· Use computer not connected to Internet

· Store personal information on disk

· Antivirus software

· Never open unknown e-mail

· Password

How to Protect Personal Information

Say NO when a Web site asks if you want to save your password for your next visit. Online con artists pick up stored passwords then use them to get into your online accounts. They can then access your credit card numbers. How does this scam work? When you open an e-mail from a “friend Joe” who asks you to open an attachment to see a cartoon, funny story, joke, picture, etc., it then launches a program to systematically search for all user data including passwords stored on your computer. Then the program e-mails the information to other scam operators.

· To be completely safe, store personal information on a different computer that is not connected to the Internet.

· Store personal information on a zip disk or a floppy disk, that is removed from the computer.

· Use Antivirus Software.

· Never open unsolicited e-mail.

· Never store personal information on your hard drive.

· Choose unidentifiable passwords that include a combination of at least 8 letters, numbers, and characters.

· If you don’t recognize the name, delete the item.

What Can You Do if You Find Unwanted Information on the Web?

· Contact the site

· Search engine services

What Can You Do if You Find Unwanted Information on the Web?

First, contact the site where you found the information and demand that it be removed. Then contact the ISP for that site and alert them to the fact that the site is putting out inappropriate information. To find the ISP look up the site’s WOIS record at http://www.internic.net/cgi-bin/whois. Probably the best and quickest way to remove unwanted information is to use services offered by search engines, such as Google or Altavista. Links can be quickly removed. One such address is http://www.altavista.com/sites/help/contact/intro_help and then send e-mails to the appropriate addresses.

So just how much privacy do consumers have? Not much, actually one has little control over how much personal information is available to those willing to spend the time surfing.

How to Protect Your PC From Intruders

· File share control

· Port blocking service

· Quarantine e-mail attachments

· Cookie blocker

· Content blockers

How to Protect Your PC From Intruders

Firewalls protect your personal computer. With one click of the mouse you can lock your PC and stop traffic to and from the Internet. It is a good idea, when installing the firewall to use default settings because this feature blocks common threats to your PC.

· File share control, blocks unauthorized use of the Microsoft Windows Net BIOS services

· Smart alerts, notifies you when traffic was blocked

· Port blocking service, blocks unauthorized network traffic into or out of your PC

· Quarantine e-mail attachments, to help protect your PC against e-mail hacking and viruses

· Cookie blocker, some programs block cookies to help ensure your privacy when surfing the Web

· Content blockers, some programs allow parents to block access to custom specified activities.

What To Do If You Become an Internet Fraud Victim

Contact:

FBI Clearinghouse

National Fraud Information center

U.S. Securities and Exchange Commission

Federal Trade Commission

What To Do If You Become an Internet Fraud Victim

· Contact the FBI Clearinghouse that addresses all kinds of Online fraud. Contact www.ifccfbi.gov

· Contact the National Fraud Information Center at www.fraud.org and file a complaint online. The complaint will be forwarded to the appropriate law-enforcement groups.

· The U.S. Securities and Exchange Commission U.S. Securities and Exchange Commission deals with e-mail stock and securities fraud. Contact at www.sec.gov

· The Federal Trade Commission prosecutes online fraud. File a complaint at www.ftc.gov.

Information That You Should Know

Antivirus protection

Information That You Should Know

· Antivirus software doesn’t catch new viruses, update at least monthly or even better weekly.

You Can Take Action Against Online Sharing of Personal Information.

You Can Take Action Against Online Sharing of Personal Information.

Voice your opinion. Some privacy advocates call for changes in the policies regarding the sharing of “public information”. Should “public information” shared freely by many agencies and businesses be allowed to include your Social Security Number? To make your opinion heard as to whether public records belong on the Internet, contact your state and federal lawmakers and tell them how you feel.

Is Big Brother Watching?

Is Big Brother Watching?

According to the American Management Association, 75 percent of all American companies now use some form of surveillance equipment to spy on employees. Today’s workplace is anything but private. Internet snooping software makes it easy for employers to spy on an employee in the workplace, viewing e-mail, and web access. Increasingly tougher liability laws, and sexual harassment laws have resulted in employers using technology, even videotaping of employee workspaces, including restrooms. Is it legal? Yes. According to Privacy Rights Clearinghouse, unless specifically stated otherwise, the company you work for can listen, watch and read your workplace communication.

How to Protect Personal Information

Say NO when a Web site asks if you want to save your password for your next visit. Online con artists pick up stored passwords then use them to get into your Online accounts. They can then access your credit card numbers. How does this scam work? When you open an e-mail from a “friend Joe” who asks you to open an attachment to see a cartoon, funny story, joke, picture, etc., it launches a program to systematically search for all user data including passwords stored on your computer. Then the program e-mails the information to other scam operators

· To be completely safe, store personal information on a different computer that is not connected to the Internet.

· Store personal information on a zip disk or a floppy disk, that is removed from the computer.

· Use Antivirus Software.

· Never open unsolicited e-mail.

· Never store personal information on your hard drive.

· Choose unidentifiable passwords that include a combination of at least 8 letters, numbers, and characters.

· If you don’t recognize the name, delete the item.

Prepared by

Janice M. Park PH.D.

Gerontology Specialist