Internet Fraud Dr. Elijah Ezendu FIMC, FCIM, FIIAN, FBDI, FAAFM, FAAPM, FCCM, MIMIS, MITD, ACIArb, ACIPM, PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC

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

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

“ 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

“ 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

“ 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

“ 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

“ 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

“ 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

Tools Used for Internet Fraud Email Chat rooms Websites Message Boards Portals Web Application

Email

Chat rooms

Websites

Message Boards

Portals

Web Application

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

Credit/Debit Card Fraud

Business Deceit

Recruitment Deceit

Freight Forwarding Scam

Counterfeit Cheque Scam

Advance Fee Fraud

Non-Delivery of Goods/Service Fraud

Types of Internet Fraud 2 Fake Escrow Scam Spoofing/Phishing Scam Investment Rip-Off Identity Theft Ponzi/Pyramid Fraud Auction Fraud

Fake Escrow Scam

Spoofing/Phishing Scam

Investment Rip-Off

Identity Theft

Ponzi/Pyramid Fraud

Auction Fraud

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Typical Webpage Used for Phishing

Investment Rip-Off This refers to a system of trading on counterfeit securities or using fraudulent claims to solicit for loan or investment.

This refers to a system of trading on counterfeit securities or using fraudulent claims to solicit for loan or investment.

Identity Theft This entails the use of another’s personal information without appropriate consent, for the purpose of fraudulent practices.

This entails the use of another’s personal information without appropriate consent, for the purpose of fraudulent practices.

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.

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.

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.

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.

Exercise Identify the key relationship between business deceit and phishing. List two examples of Ponzi Pyramid Fraud

Identify the key relationship between business deceit and phishing.

List two examples of Ponzi Pyramid Fraud

Dr. Elijah Ezendu is a multidisciplinary professional whose business experience mounts through diverse fields. He is a Certified Management Consultant, licensed by International Council of Management Consulting Institutes which has a Special Consultative Status in United Nations Economic and Social Council. As a result of his strides in management consulting, he received Merit Award for Excellence in Consulting. He is concurrently Senior Partner, Shevach Consulting; Director of Strategy and Performance, Fortuna; Lead Assessor and Member of Governing Council, Institute of Management Consultants; Director of Training, International Council of Business Development Professionals; Member of Marketing Committee, International Council of Management Consulting Institutes; Honorary Global Advisor, International Project Management Commission; and Programme Coordinator (Nigeria), Regent Business School, South Africa. He holds a doctoral degree in Management from St. Clements University, British West Indies. He is a Chartered Manager certified by Canadian Institute of Management, Canada and holds numerous professional qualifications including Master Project Manager; Project Manager E-Business; Fellow, Institute of Management Consultants; Fellow, Certified Institute of Cost Management; Fellow, Institute of Business Development; Fellow, American Academy of Financial Management; Fellow, Institute of Internal Auditors; Member, Nigerian Institute of Training and Development; Member, Institute of Analytics Professionals; Associate, Chartered Institute of Personnel Management of Nigeria; Associate, Chartered Institute of Arbitrators (Nigeria). He is a Certified Business Development Analyst and Competitive Intelligence Professional. Additionally, he is an information technology management professional certified by Institute for the Management of Information Systems, UK along with Microsoft Corporation, USA and stands as a Member of International Association of Software Architects. He is an outstanding motivational speaker with a knack for recalibration of positive influence; and a world-class consultant, who has functioned as Speaker/Facilitator at myriad programmes of professional institutes, international development organisations, private and public firms including extra-governmental agencies and institutions. He is a prolific writer and author who had served as Editor-in-Chief, Cost Management Journal; Part-Time Lecturer & External Examiner (MBA Programme), Ladoke Akintola University of Technology; Director of MBA Programme (Nigerian Outreach), Management Institute of Canada; Chief Operating Officer, Rohan Marine; Second Vice President and Member of Governing Council, Certified Institute of Cost Management; Director of Programmes and Member of Governing Council, The Institute of Business Development; Director, Refined Shipping; and Examiner to various Professional Institutes.

Dr. Elijah Ezendu is a multidisciplinary professional whose business experience mounts through diverse fields. He is a Certified Management Consultant, licensed by International Council of Management Consulting Institutes which has a Special Consultative Status in United Nations Economic and Social Council. As a result of his strides in management consulting, he received Merit Award for Excellence in Consulting. He is concurrently Senior Partner, Shevach Consulting; Director of Strategy and Performance, Fortuna; Lead Assessor and Member of Governing Council, Institute of Management Consultants; Director of Training, International Council of Business Development Professionals; Member of Marketing Committee, International Council of Management Consulting Institutes; Honorary Global Advisor, International Project Management Commission; and Programme Coordinator (Nigeria), Regent Business School, South Africa. He holds a doctoral degree in Management from St. Clements University, British West Indies. He is a Chartered Manager certified by Canadian Institute of Management, Canada and holds numerous professional qualifications including Master Project Manager; Project Manager E-Business; Fellow, Institute of Management Consultants; Fellow, Certified Institute of Cost Management; Fellow, Institute of Business Development; Fellow, American Academy of Financial Management; Fellow, Institute of Internal Auditors; Member, Nigerian Institute of Training and Development; Member, Institute of Analytics Professionals; Associate, Chartered Institute of Personnel Management of Nigeria; Associate, Chartered Institute of Arbitrators (Nigeria). He is a Certified Business Development Analyst and Competitive Intelligence Professional. Additionally, he is an information technology management professional certified by Institute for the Management of Information Systems, UK along with Microsoft Corporation, USA and stands as a Member of International Association of Software Architects. He is an outstanding motivational speaker with a knack for recalibration of positive influence; and a world-class consultant, who has functioned as Speaker/Facilitator at myriad programmes of professional institutes, international development organisations, private and public firms including extra-governmental agencies and institutions. He is a prolific writer and author who had served as Editor-in-Chief, Cost Management Journal; Part-Time Lecturer & External Examiner (MBA Programme), Ladoke Akintola University of Technology; Director of MBA Programme (Nigerian Outreach), Management Institute of Canada; Chief Operating Officer, Rohan Marine; Second Vice President and Member of Governing Council, Certified Institute of Cost Management; Director of Programmes and Member of Governing Council, The Institute of Business Development; Director, Refined Shipping; and Examiner to various Professional Institutes.

Merci Beaucoup For additional information: Dr. Elijah Ezendu elezendu@yahoo.com, 234 8033024596, 234 8058835237