Internet Fraud


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Profiling the characteristics, tools and dimensions of internet fraud

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Internet Fraud

  2. 2. Learning Objectives At the end of this course, participants should be able to do the following: • Identify the nature of internet fraud • List the tools used for internet fraud • Categorise internet fraudulent practices
  3. 3. “Internet fraud is a form of fraud which uses any component of the Internet to accomplish the intended fraudulent activity.” - National White Collar Crime Center, USA
  4. 4. “The term ‘Internet fraud’ refers generally to any type of fraud scheme that uses one or more components of the Internet - such as chat rooms, e-mail, 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 other connected with the scheme.” Source: US Department of Justice
  5. 5. “Internet auction fraud was by far the most reported offense, comprising 44.9% of referred complaints. Non-delivered merchandise and/or payment accounted for 19.0% of complaints. Check fraud made up 4.9% of complaints. Credit/debit card fraud, computer fraud, confidence fraud, and financial institutions fraud round out the top seven categories of complaints referred to law enforcement during the year.” Source: Internet Crime Complaints Center
  6. 6. Tools Used for Internet Fraud • Email • Chat rooms • Websites • Message Boards • Portals • Web Application
  7. 7. Types of Internet Fraud 1 • Credit/Debit Card Fraud • Business Deceit • Recruitment Deceit • Freight Forwarding Scam • Counterfeit Cheque Scam • Advance Fee Fraud • Non-Delivery of Goods/Service Fraud
  8. 8. Types of Internet Fraud 2 • Fake Escrow Scam • Spoofing/Phishing Scam • Investment Rip-Off • Identity Theft • Ponzi/Pyramid Fraud • Auction Fraud
  9. 9. Credit/Debit Card Fraud This involves the use of credit/debit card to obtain money or acquire properties without appropriate authorization. Fraudsters obtain credit/debit card numbers of victims from unsecured web media.
  10. 10. Business Deceit In this case, fraudsters masquerade themselves as genuine business people and attempt to collect personal information such as social security number and date of birth from respondents, in order to use the data for purchasing goods which would most likely be transferred or shipped out of the country.
  11. 11. Recruitment Deceit Generic public or private portals can be used for advertising spurious job openings with the intention to collect vital information from applicants, and deploy them for purchasing goods.
  12. 12. Freight Forwarding Scam This is an internet fraud that entails the movement of merchandise from one party to another until it gets to the major perpetrator, who must have enlisted the other participants without informing them that the goods were bought with fake credit cards.
  13. 13. Counterfeit Cheque Scam This entails the use of counterfeit cheque to pay for goods, such that the face value of the cheque would be far higher than the requirement; thus the seller would be instructed to return the overage amount to a foreign account because it’s needed for an ancillary purpose.
  14. 14. Advance Fee Fraud This is popularly known as 4-1-9. It refers to the type of fraud in which a substantial amount would be demanded for payment of processing fees that stand as requirement for release of non-existing merchandise or large amount of money.
  15. 15. Non-Delivery of Goods/Service Fraud This refers to scam in which people are encouraged to pay for goods and or service via a web portal, and thereafter nothing would be delivered to the buyers.
  16. 16. Fake Escrow Scam This involves presentation of a spoofed website of a third party as a medium for payment , claiming that when the merchandise is successfully shipped to a buyer only then would the money be transferred to the seller; even when the supposed escrow service is a falsification and simply an account of the same seller.
  17. 17. Spoofing/Phishing Scam Spoofing is a type of fraud in which a fraudster masquerades as another person by using another person’s email identity or header to transact business and obtain vital information such as bank account numbers, credit card numbers and associated passwords. While Phishing is a form of spoofing in which the webpage of a particular entity can be duplicated and positioned with url for the purpose of luring people to divulge vital financial information.
  18. 18. Typical Webpage Used for Phishing
  19. 19. Investment Rip-Off This refers to a system of trading on counterfeit securities or using fraudulent claims to solicit for loan or investment.
  20. 20. Identity Theft This entails the use of another’s personal information without appropriate consent, for the purpose of fraudulent practices.
  21. 21. Ponzi/Pyramid Fraud This is a system of luring investors to invest in a scheme in which the investment firm promises abnormally high returns, meanwhile the early investors shall be paid with investment capital obtained from successive investors. The payment chain would continue till the point of collapse.
  22. 22. Auction Fraud In this case, people are encouraged to participate in online auction and when money must have been paid for specific items, the fraudster would send either a lower standard item or counterfeit.
  23. 23. Exercise 1. Identify the key relationship between business deceit and phishing. 2. List two examples of Ponzi Pyramid Fraud
  24. 24. Dr. Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant with expertise in HR, OD, Competitive Intelligence, Strategy, Restructuring, Business Development, Sales & Marketing, Interim Management, CSR, Leadership, Project & Programme Management, Cost Management, Outsourcing, Franchising, Intellectual Capital, eBusiness, Social Media, Software Architecture, Cloud Computing, eLearning & International Business. He holds proprietary rights of various systems. He is currently CEO, Rubiini (UAE); Hon. President, Worldwide Independent Inventors Association; Special Advisor, RTEAN; Director, MMNA Investments Limited. He had functioned as Chair, International Board of GCC Business Council (UAE); Senior Partner, Shevach Consulting; Chairman (Certification & Training), Coordinator (Board of Fellows), Lead Assessor & Governing Council Member, Institute of Management Consultants, Nigeria; Lead Resource, Centre for Competitive Intelligence Development; Turnaround Project Director, Consolidated Business Holdings Limited; Lead Consultant/ Partner, JK Michaels; Technical Director, Gestalt; Chief Operating Officer, Rohan Group; Executive Director (Various Roles), Fortuna, Gambia & Malta; Director, The Greens; Chief Advisor/Partner, D & E; Vice Chairman, Refined Shipping; Director of Programmes & Governing Council Member, Institute of Business Development, Nigeria; Member of TDD Committee, International Association of Software Architects, USA; Member of Strategic Planning and Implementation Committee, Chartered Institute of Personnel Management of Nigeria; Adjunct Faculty, Regent Business School, South Africa; Adjunct Faculty, Ladoke Akintola University of Technology, Nigeria; Editor-in-Chief & Chairman of Editorial Board, Cost Management Journal; National Executive Council Member, Institute of Internal Auditors of Nigeria; Member, Board of Directors (Several Organizations). He holds Doctoral Degree in Management, Master of Business Administration and Fellowship of Several Professional Institutes in North America, UK & Nigeria. He is an author & widely featured speaker in workshops, conferences & retreats. He was involved in developing Specialist Master’s Degree Course Content for Ladoke Akintola University of Technology (Nigeria) and Jones International University (USA). He holds Interim Management Assignments on Boards of Companies as Non-Executive Director.
  25. 25. Thank You