Understanding Computer Fraud - Common Practices Used by Online and Offline Scammers

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Fraud is using deception and lies to manipulate an individual. Fraud in our everyday lives can be defined as any intent to hide or disguise the legitimate source of an offer to make it look as if it originated from a legitimate source. Fraud highlights a seemingly insignificant amount of truth and dupes people (victims) into voluntarily surrendering their information or money. Fraud is different from theft because the victim voluntarily and knowingly gives the information or money to the criminal but would not have if the criminal did not make a false representation or misrepresentation. Computer fraud differs from everyday fraud only because a computer is a necessary tool to complete the crime of fraud. The ‘necessary tool’ can be electronic communications, electronic bookkeeping or the device used to make the offer such as email, instant messaging or a website.

Unfortunately, a lot of us are less likely to recognize the potential fraud in an email, over the phone, after an online auction, or at a website than we would be if we were approached in a parking lot, in person, at a gathering, or through postal mail. Seniors, as a group, seem to be the most vulnerable. They typically have worked a lifetime to gather assets so they can ease the financial hurdles for their families. If seniors can expand what they have collected by spending just a little bit more, how joyous it would be to see their family thrive through their hard work and efforts. Unfortunately, the results of fraud can be quite devastating for victims. Seniors as a group seem to have a more trusting nature than their children who are typically in the workforce and are actively raising their children. Since seniors were not raised with computer technology as today’s youth are, learning to use a new tool safely and recognizing the same old fraud with a new appearance can sometimes be a daunting task.

The computer you buy does not come with a safety manual to describe the various personalities you can encounter. Every personality we meet in our everyday lives can be met online. We learn about strangers, bad people, and thieves with our everyday experiences as we get older, along with recognizing good and helpful people. Not only do respectable persons and businesses use computers to enhance their everyday activities but criminals also use computers and the internet to reach much, much greater numbers of potential victims (the duped customers or clients) in much, much less time.

The presentation or form of the initial contact can change to accommodate the tool used – email, the internet, the phone, chatrooms, postal mail, social networking communities, in person, at gatherings, etc. But, the underlying fraud is still the same. With new technologies, new schemes are created to dupe potential victims into believing lies and deceit so personal, banking and/or financial information will voluntarily be given. The appearance of the initial offering can change but the underlying fraud and the indicators of possible fraud don’t change.

It is important to know that only state offices of consumer protection or state Attorneys General offices that are pursuing legal action can possibly recoup monies you lost in a fraudulent scheme. States do not charge, require, or collect an up-front fee when legal action is pending. Any company or offer that advertises the return of money lost in a fraudulent scheme for an up-front fee is a fraud. This is the reason consumers are urged to use all available methods to pursue the company, website or individual for a refund before filing a complaint with a law enforcement agency.

When you are in a forum or chatroom and someone there claims to have a “tip” or information the general public does not have, beware. Remember anyone can pretend to be someone else who has an excellent reputation in a field of expertise, anyone can pretend to be an expert or professional in a field they have no training for, anyone can pretend to be more than one person at a time, and anyone can be whomever they think you would want them to be so you will voluntarily surrender your money or information. Do not surrender your money or information to someone you met online, through a website or instant messaging, in a forum or chatroom unless you can verify through public records (the phone book, organization membership – not through references they provide) that the person you are sending your information or money to is actually the reputable person you researched with the same exact physical address, email address, and phone number.

To prevent being a victim to fraudulent offers at websites, be sure you are at the official website of the legitimate company. Check the privacy policy of the website before purchasing. And, look for at least one of the following before entering your payment information:

  • https:// or s-https:// instead of the unsecured webpage beginning with https://
  • a closed lock icon in your browser window
  • one or more secure payment service verification logos such as PayPal, World Pay or VeriSign.

This post is part of the series: An Introduction to Online Fraud

Fraud online is now comonplace. Are you aware of everyday tricks to get you to part with your information or monies? This series highlights the temptations.

  1. Fraud Online - An Introduction (Part One of Two)
  2. Fraud Online - An Introduction (Part Two of Two)
  3. Auction Fraud
  4. Health Fraud Online - An Introduction
  5. Recognize the Fraud in Miracle Cures