Protecting Your Credit From Online Fraud

Internet fraud has been around nearly as long as the Internet itself. A report from a source showed that in 2012, approximately 289,874 consumers became victims of online crime, resulting in an adjusted dollar loss of $525,441,110, an 8.3 percent increase in losses since 2011. From online shopping to electronic banking, there are dangers lurking around every corner in the digital world. The enhanced sophistication and rapid growth of the Internet only causes online fraud to become more of a challenge, especially in the form of viruses, spyware, fraudulent emails and websites, and pop-up advertisements. Take the proper precautions to safeguard your personal information while online to avoid fraud.

Online Fraud Defined

Fraud that is committed using the Internet is referred to as "online fraud." Online fraud comes in many forms, ranging from identity theft to financial fraud. An increasing number of consumers and businesses rely on the Internet to conduct transactions; however; fraudsters use the very same media to conduct illegal activity. Scams conducted via the Internet are often difficult to trace and prosecute; resulting in millions of dollars lost each year in fraudulent charges.

Types of Online Fraud

Online scam artists use a variety of methods to commit Internet fraud. According to a 2010 report of the top 10 crime types, the most common was non-delivery of payment and/or merchandise around 14%.. The following crime types included FBI-related scams, identity theft, and credit card.

Identity Theft: Identity theft is any type of fraudulent activity that results in the loss of personal information, such as user names, passwords, credit card numbers, social security numbers, or banking information. Using this information, the cyber thief can impersonate the victim and use the person's identity to open new credit card accounts, establish cellular phone service, and make fraudulent transactions.

Phishing: Phishing can be found in the form of email messages or websites - all designed to steal money. These emails and webpages appear to be legitimate, but in reality are spoofed sites that try to get the victim to divulge personal information, such as credit card numbers or account passwords. Cybercriminals may also use social engineering to convince the victim to install malicious software onto their computer under false pretenses.

Auction Fraud: As online shopping and digital auctions grow, so do the number of complaints regarding fraudulent transactions. Auction fraud involves shopping scams where computer criminals use the anonymity of the Internet to steal identities and access the personal finances of victims. Common complaints among auction fraud victims include receiving goods late or not at all, buying goods that are less valuable or described significantly different than the original description, sellers' not receiving payment, or failing to disclose relevant details about a service or product or the terms of a sale.

Hacking: Online hacking involves gaining entry into a victim's personal computer illegally. Hacking can take on several forms, including entering a network intended to be private, redirecting the victim elsewhere as they try to access a particular website, changing the content of the victim's website, or overwhelming a website with frequent popup messages in an attempt to slow it down or crash the server.

Credit Card Fraud: Many people believe that credit card fraud can only occur when the criminal gains direct access to the actual card. A majority of credit card fraud is conducted using spyware and other types of malware. Spyware can run in the background of a computer without the victim's knowledge, leading to serious consequences such as identity theft and credit card fraud.

Cloning: Website cloning involves duplicating the appearance of a website to use specifically for criminal use. Fraudsters may attempt to create clones of well-known retailers, popular chat rooms, high-traffic trade sites, or other websites to encourage victims to unknowingly provide information to make a "fake" purchase.

Investment Fraud: From pyramid schemes to offshore investing, the Internet is filled with dangerous investment scams. One of the most popular, "pump-and-dump" scheme, involves dispersing false information to cause significant price increases in stocks of shell companies or thinly traded stocks before immediately selling off their holdings of the stocks before the stock price falls back to their normal, lower levels.

How to Spot It

Internet fraud continues to become more advanced, making it increasingly difficult to spot it before it causes negative effects. To reduce the likelihood of being a victim of Internet fraud, it's crucial to use caution when online. Look at the sending URL address of email to determine if it directs to a trusted website or a spoofed page. Also check to see if the sender's email matches the website, and is not from a personal email address.

Take note of any requests for account numbers or usernames, as most legitimate establishments will never ask for personal information via email. Examine the email or webpage for grammatical or spelling errors, as well as odd phrasing that may indicate that the source is not legitimate. If you still have concerns, contact the establishment via telephone and inquire about the validity of the website or email in question.

Prevention

Avoiding online scams and swindles can be tricky in today's online world. It's important to know exactly who you're dealing with online by finding the seller's physical address and phone number or only buying from trusted websites.

Monitor your online accounts closely and change the unique passwords to each account on a regular basis. Keep your anti-virus software updated and ensure that your computer's firewall is enabled. Beware of emails that include links, messages offering a prize or discount, or messages that attempt to gain login information. Instead, go directly to the website in question to log in. Read your monthly bank statements to catch any fraudulent activity quickly. If you see charges you don't recognize, contact the card issuer, creditor or your bank immediately.