design of report

Running head: HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 1

How to avoid internet scams at the workplace

Christophe Bassono

CIST3000: Advanced Composition IS&T

Amanda L. Gutierrez, M.S. & M.A.

UNO-Fall 2018

HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 2

Online Fraud: How to Avoid Internet Scams in the Workplace

This section outlines how the researcher envisions presenting the report. The outline

demonstrates the different sections in which the report will be broken into and the

information that will be contained in each section

Introduction

Definition

Online fraud refers to deceitful schemes that are done using the internet. Online fraud may

come in the form of financial theft, identity theft or a combination of both.

History of Online Fraud

An influx of online fraud began to be experienced in the 1990s with the increased technology

use and e-commerce. In the beginning, online fraud was done by using the names of famous

celebrities of the time to commit internet crimes. Over time, more technical and sophisticated

plans were developed such as creating card-generator applications with real credit card

numbers, setting up dummy merchant websites and mass identity theft. Today, despite

attempts by various governments to regulate and mitigate online fraud, more sophisticated

online fraud schemes have been established ranging from credit card fraud to phishing,

hacking, and identity theft (Saeger & Probert, 2015).

In the recent past, computer fraud has evolved through a series of advancements outplaying

the traditional security defenses such as the two-factor authentication, antivirus, and SSL

encryption in the process. Zeus and SpyEye are the most common attack tools used by

hackers since they support the gathering of vast volumes of extremely sensitive

authentication data. It has been established that no single application is immune to attacks

and the malicious attackers are focusing more on online banking accounts because they offer

HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 3

most direct payoff. Online fraud is based on three core technologies: the botnet controllers

capable of handling hundreds of thousands of bots, highly effective data collection, and

sophisticated Trojans that are updateable.

Form grabbing for PCs running IE/Windows has been a simplified approach for fraud. The

technique helps attackers to extract data within browsers. The deployment of form grabbing

on compromised PCs allowed hackers to obtain numerous numbers of online bank account

IDs and passwords. The password-based authentication was termed no longer safe for online

banking prompting the introduction of two-factor authentication (Mellinger, 2011).

Nevertheless, criminals still found the loophole that helps them to challenge the security of

two-factor authentication through web injects. Malicious attackers that promote online fraud

have created various techniques.

As a result, efforts to combat crimeware have been put into place. Computer fraud

jeopardizes our security, privacy, and anonymity. There is the need for cybercrime analysts to

find out the extent to which malware attacks and viruses have affected our technologies to

ensure damage control (Mellinger, 2011). Moreover, they should develop new approaches to

controlling the spreading of computer fraud in daily operations. Besides, government

agencies need to increase their accountability by bankrolling an anti-crimeware program and

detecting all forms of online fraud.

Numbers on Online Fraud

The numbers of online fraud have reached a record high as of the year 2017. The top fraud of

2017 has been reported to online imposters with at least one in every five people having been

duped by fraudsters. A whopping three hundred and twenty-eight million has been lost

through this form of online fraud (Vaca, 2018). Identity theft and credit card theft has also

been reported to be among the top forms of online fraud. Sixty-three thousand people

HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 4

reported tax fraud in 2017. In 2017, the total amount of money lost to online fraudsters in the

United States was recorded as nine hundred million dollars, a seven percent increase from the

amount lost in 2016. Cacciottolo and Rees (2017) report that in the United Kingdom, over

three thousand eight hundred online dating fraud victims had lost over thirty-nine million

dollars in 2016 to online fraudsters.

Recent studies have illustrated that cases of internet scam are on the rise. These cases have

accounted to loss of more than $100 billion by companies and individuals. Internet scammers

continue to develop diverse ways to blackmail or defraud individuals without their

knowledge. Both professionals and non-professionals are susceptible to online fraud and this

complicates the issue. According to the Scam Tracker by the Better Bureau reports, computer

fraud has continued to escalate in the recent past with over 46,000 cases reported in 2007 in

the United States and more than 30,000 cases had been reported by mid-August in 2018

(Wagner, 2018). The table below illustrates the growing cases of internet fraud in the U.S.

(Wagner, 2018)

HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 5

Types of Online Fraud and How They Occur

According to Rampton (2015), online payment fraud is continuously growing. A significant

share of the fraudulent transactions emanates from mobile commerce. E-commerce fraud also

referred to as purchase fraud happens when a fraudster approaches an innocent party and

recommends a business transaction by application of fraudulent means such as fake or stolen

credit card. In the process, the merchant is left unpaid during the business transaction. Online

store owners are more exposed to online fraud. The continuing advancement of technology

jeopardizes payment methods and the data processing systems in most institutions. Often,

online fraud occurred when a credit card got lost or its information was not stored securely,

but the card-not-present (CNP) frauds have continued to grow recently.

Fraudulent orders have increased from 1.58% in 2017 to 1.8% in 2018 in terms of the

percentage of total revenue loss in online stores . The most common types of e-commerce

fraud include friendly fraud and clean fraud.

The Friendly Fraud

The friendly fraud occurs when a client buys a product or pays for some services with their

personal credit card, and issues a deliberate chargeback arguing that the product or services

were never received or claims that they never made these charges. Online business supports

friendly fraud as it allows customers to perform reverse transactions (Bumbiere, 2018). In

most cases, chargebacks are allowed to safeguard clients from online scams, but customers

have started taking advantage by using it in place of refunds. The credit card companies

continue to suffer from the narrative that the customer is always right as they place the

burden of proof on retailers during these dubious transactions.

HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 6

Friendly Fraud can be prevented through various means. The client must take responsibility

by ensuring that the credit card distributor matches the business name. Most often, the

chargeback fraud takes place when customers fail to identify the name of the company on

their card statements. Customers are advised to use shipping with tracking since it makes it

easier to provide evidence where the products were delivered. Moreover, it is vital to ensure

there are clear reshipping, return, and refunds policies before making any transactions.

The Clean Fraud

The clean fraud takes place when a stolen credit card is used to make a purchase. It needs a

high skill and expertise to happen. The clean fraud is regarded as the ultimate doppelganger

since it appears like a genuine transaction with good billing, shipping, and IP addresses

together with complete and verified card data (Bumbiere, 2018). The clean fraud entails four

steps. First, the criminals obtain the cardholder information through data breaches and card

skimming. Second, during the purchase, the fraudsters utilize the card’s information by

impersonating the cardholder making online purchases. Thirdly, believing the transaction is

legitimate; the merchant accepts the sale and processes payment. Lastly, the merchant is

pressurized for chargebacks and lost merchandise when the fraud is found out.

For small retailers, avoiding clean fraud will require regular software updates since it can

bypass the fraud detection tools easily. Smaller retailers are advised to use the free trial plans

of the fraud detection software during holidays from companies such as Kount, Signifyd, and

Sift Science. Huge retailers have the resources required to purchase the fraud detection

software, and they need to buy them even though they are extremely pricey. Retailers must be

keen during any transactions, and this can help to detect some of the cases.

HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 7

Online fraud occurs in various ways. Some of these include online intellectual property theft,

identity theft, phishing, untrustworthy websites, credit card fraud, and hacking.

Online Intellectual Property Theft

Any author or creator of information has intellectual property rights to their material, which

prohibits other users from using or publishing the material without the owner’s consent.

Today, online fraudsters use this material on their own sites without the owner’s permission.

This is called online intellectual theft.

Identity Theft

This occurs when a fraudster steals another person’s personal information such as names,

address, birth-date, and account details and uses the stolen information to create an identity

under which they hide when committing fraud.

Phishing

Phishing occurs through emails or websites whereby fraudsters attempt to get personal data

such as credit card details, passwords and account details. The fraudsters then use this

information unlawfully by defrauding the unsuspecting users (Cassim, 2014).

Credit Card Fraud

This fraud occurs once a person enters their credit card details on deceitful websites.

Fraudsters then use this information to make unlawful purchases without the owner’s

permission

Hacking

This entails gaining illegal entry into a computer system. This enables the hacker to steal

money or carry out other unlawful dealings without exposing their actual identity.

HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 8

Prevention of Online Fraud

Monitor and be conscious

People should use different passwords for their accounts and choose long strong passwords,

which may not be hacked easily. Secondly, even though there may be many legitimate sellers

online, one should be keen on whom they give their information. Before clicking on any

links, one should make the habit of running a full scan with their antivirus software.

Computer Software

Organizations may install security systems, firewalls, and encryption that protect their client's

data from hackers (Cross & Kelly, 2016). Individuals may also install antivirus applications

and passwords on their phones and personal computers. This reveals that every individual

should be concerned about the security of their private information and everyone has a role to

play towards prevention of online fraud.

Keep Financial Data Separate

Businesses and corporations should develop a culture that will create a dedicated workstation

to conduct all financial activities. It is important to use different computers to conduct non-

banking business. Before switching off the computers used for the financial services, users

are advised to back up all sensitive information and even erase the hard drive prior to

recycling it.

Know who is asking

Financial institutions such as banks do not send sensitive emails or messages asking for

personal information such as social security numbers. These institutions disapprove any

attempts to verify account information using this approach. People should understand the

safety associated with not sharing personal information such as account numbers, social

security or tax ID numbers, passwords or log in information through email or text. An

HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 9

individual can only share his/her sensitive information to a bank through the bank’s secure

online banking platform. Any email that asks for sensitive information is illegitimate and

people should verify its authenticity before replying or sending personal details.

Protect your computer

Cyber-attacks have been on the rise recently. Installing antivirus software, therefore, is

important to any computer or network. Users should regularly update their software to

safeguard their computers from computer viruses. Software such as anti-spam software aids

in preventing spam and junk email from entering into the inbox of emails and this protect

against phishing emails. Besides, every computer should be installed with a firewall as it

avoids unauthorized persons, viruses, or malware, from access. The anti-spyware software,

nonetheless, blocks the spyware installation on your computer thus redirecting malicious

websites or pop-ups.

Keep your passwords secret

Computers users should avoid sharing their passwords. Additionally, always leave any

documents with financial data in a secure place. Changing passwords on a regular basis help

to improve the protection and it is necessary to combine numbers, letters, and special

characters. Administrators should change password and the default SSID of the wireless

network on a regular basis.

Conclusion

Evidently, online fraud poses a big threat to organizations as well as individuals. The vice has

caused businesses and individuals millions of dollars each year. With increased internet

usage, fraudsters continue to device newer and more sophisticated ways of committing online

fraud. It is, therefore, important for every individual to be more aware of the various forms in

which online fraud may occur. This way, they are in a better position to save themselves from

HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 10

being victims of online fraud. Apart from increased consciousness while using the internet

and monitoring where their personal information goes, it is also important that organizations

invest in a current security system which is able to protect their information from hackers and

fraudsters.

Business corporations should implement measures to prevent the online fraud cases because

of the damages and losses that they can cause. As illustrated, company can adhere to various

approaches such as installing the anti-virus software, adware software, and anti-spyware for

protection. Nevertheless, firewall installation allows necessary connections and protects

computers from viruses, malware, and hackers. Regular updates of software help in

maintenance and increase the security of servers and the computer infrastructure at large.

Businesses continue to develop measures to safeguard themselves from online fraud and this

includes creating awareness to their employees and preventing them from downloading

freeware or shareware from unfamiliar sources (Goldsmith, 2007). Failure to safeguard the

computers from malicious attacks can jeopardize the personal information of clients and

destroy the reputation of companies. Businesses should create a trustworthy environment if

they want to succeed both in the short-term and long-term.

HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 11

References

Cacciottolo, M. & Rees, N. (2017). Online dating fraud victim numbers at record high.

Retrieved from https://www.bbc.com/news/uk-38678089

Cassim, F. (2014). Addressing the specter of phishing: are adequate measures in place to

protect victims of phishing? The Comparative and International Law Journal of

Southern Africa, 47(3), 401-428.

Cross, C., & Kelly, M. (2016). The problem of "white noise": examining current prevention

approaches to online fraud. Journal of Financial Crime, 23(4), 806-818.

Goldsmith, J. (2007). Who controls the Internet? Illusions of a borderless world. Strategic

Direction, 23(11).

Mellinger, P. (2011, November 7). Crime and malware: A short history of computer fraud.

Retrieved from https://www.computerworlduk.com/security/crime-and-malware-a-

short-history-of-computer-fraud-3316463/

Saeger, D. A., & Probert, C. (2015). Ponzi scheme: Learn to detect scams and take care of

your money.

Vaca, M. (2018). The top frauds of 2017. Retrieved from

https://www.consumer.ftc.gov/blog/2018/03/top-frauds-2017

Wagner, P. (2018, August 14). Infographic: Internet Scamming is on The Rise. Retrieved

from https://www.statista.com/chart/15069/number-of-internet-scams-in-the-us/

Bumbiere, E. (2018, October 23). The Basics of Ecommerce Fraud - What It Is and How To

Manage It | Blog - Printful. Retrieved from https://www.printful.com/blog/the-basics-

of-ecommerce-fraud-what-is-it-and-how-to-manage-it/

Rampton, J. (2015, April 14). How Online Fraud is a Growing Trend. Retrieved from

https://www.forbes.com/sites/johnrampton/2015/04/14/how-online-fraud-is-a-

growing-trend/#c596a495f7f7

HOW TO AVOID INTERNET SCAMS AT THE WORKPLACE 12