ONLINE FRAUD

Online Fraud

Online Fraud

Introduction

What is the relationship between Identity Theft & The Internet and committing online fraud? Identity theft continues to rise and has been the top consumer complaint for the past four years. According to the Federal Trade Commission (FTC), more than half of the reports filed in 2003 dealt with Internet related fraud and victims reported losing an average of $200.

The results of identity theft can cause expensive headaches for business and consumers. To minimize this unethical business practice, Netizens (citizens of the Internet) must actively participate in reducing vulnerabilities. It's important to ensure the proper security measures are in place to overcome the sophisticated tactics used by criminals. Government officials and industry leaders must take a united stand against identity theft and online fraud by establishing defensive strategies to conquer this crime on all fronts.

As stated in the Ten Commandments: “Thou shalt not bear false witness against thy neighbour” (Exodus 20:16).

Definitions & Terms:

Blended Threat: a combination of the characteristics of viruses, worms, Trojan horses and malicious code with server and Internet vulnerabilities to initiate, transmit and spread an attack.

Malicious code: Software (e.g., viruses, trojan horses and worms) that appears to perform a useful or desirable function, but actually gains unauthorized access to system resources or tricks a user into executing other malicious logic.

Trojan horse: A computer program that appears to have a useful function, but also has a hidden and potentially malicious function that evades security mechanisms, sometimes by exploiting legitimate authorizations of a system entity that invokes the program.

Virus: hidden, self-replicating section of computer software, usually malicious logic, that propagates by infecting - i.e., inserting a copy of itself into and becoming part of - another program. A virus cannot run by itself; it requires that its host program be run to make the virus active.

Worm: A computer program that can run independently, can propagate a complete working version of itself onto other hosts on a network, and may consume computer resources destructively.

Spam: unwanted and unsolicited junk e-mail.

Spoofing: an attempt to gain access to a system by posing as an authorized user.

Identity Theft

Identity theft is defined as the criminal act of assuming another person's name, address, social security number and date of birth in order to commit fraud (Lease & Burke, 2000). Types of identity theft include phone, utility, banking, tax return, social security, auto and mortgage loan fraud. Methods used to obtain identifying information range from basic street theft to sophisticated, organized crime (Hoar, 2001). Identity theft against family members, children and the deceased is a very common practice. However, most family members are reluctant to call police and press charges against their relatives.

In October 1998, the Federal Trade Commission was established as the “Clearinghouse” for consumer complaints, victim assistance and consumer education. The Consumer Sentinel is a secure online repository of identity theft complaints that can be accessed by law enforcement officials to aid investigations. Since the Commission began collecting complaints in 1999, the number of complaints continues ...