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Number of Internet Fraud Victims on the Rise

Number of Internet Fraud Victims on the Rise

By Angela Beswick

Failing to do basic background checks is resulting in more internet users falling victim to online fraud this year, costing them up to as much in value as a small car.

Internet fraud is up 20 per cent from last year, says the Internet Crime Complaint Centre, with 37.5 per cent of all complaints due to online auction fraud.

Barnaby Jack, a staff security researcher at Juniper Networks in the United States says that fraud involving online auctions continues to be the most prevalent.

“A lack of education about the latest tricks employed by scammers, a lack of education about technology and the internet in general increase a person’s vulnerability” he says.

The most common type of internet fraud involves online auction sites such as TradeMe or ebay. Mostly its simple fraud whereby the buyer sends money for a product, and the product never materialises. It likely never existed and was a fake listing purely for the purpose of a scam.

Others involve potential buyers offering to pay for goods via cheque, asking the seller to refund the difference in cash. Once the bogus buyer has received the cash, the cheque bounces, and the seller never hears from them again.

Kris Bainbridge, systems administrator for Guidance Media says that simple background checking on online auction sites, such as checking the users feedback, can be a good indicator of their trustworthiness.

“Many people are simply too trusting, or may not be familiar with the various scam methods” he says.

Garrett Denton, a 28-year-old customer service rep, explained how his mother fell victim to an online scam when trying to book an apartment for her trip to New York last year.

After spotting the apartment on the internet they contacted the owner, who asked them to send a deposit to “secure their booking.” This worked out at approximately NZ$2700.

A bank cheque was made and sent over to the seller, whom they never heard from again. The number initially provided to them was a prepaid phone and has since been disconnected.

Further background research revealed the same apartment had been listed on several different websites, under contact names like John Doe and Joe Smith.

“I don’t think there’s a way of stopping him” Denton says.

“The sites he’s used are TradeMe type sites, so users can just sign up for a new account and list whatever they like.”

Bainbridge says that online auction sites are starting to get more proactive in their approach to avoid such scams.

“TradeMe is actually pretty good. They make it hard for you to fully use the site until you are ‘address verified’, a process which requires you to prove your address is real” he said.

Both Jack and Bainbridge agree that the age old adage “If it looks too good to be true…” applies in all cases when shopping online.

“On sites like ebay or TradeMe, a lot comes down to common sense” Jack said.

“Check feedback,” says Bainbridge “See what sort of contact details the other party provides, real phone numbers, emails, addresses. Talk to them via phone if you need to.”

Phishing is another common, and dangerous, scam. The victim will receive an email which appears to be from a legitimate retailer, bank, organization, or government agency.

The sender asks the victim to “confirm” their personal information for some made-up reason: your account is about to be closed, an order for something has been placed in the victim’s name, or your information has been lost because of a computer problem. Scammers are then able to obtain the victim’s login details and can access personal information or clear their bank accounts.

Most recently AUT has become target of one such scam. Staff members received an email allegedly from AUT IT services, requesting staff confirm their login details.

The AUT IT Service Desk states, “IT Services would never send a blanket email asking for staff or students to supply their login details. If this were the case it would be a personal face-to-face communication between the IT Service Desk and yourself.”

Bainbridge says “Like any kind of fraud, scammers prey on human weakness. The internet is simply another vehicle for them. That’s the tough bit.”

For more information or to report internet fraud go to www.ic3.govt


Angela Beswick is a Journalism Student at AUT

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