The truth about internet fraud

Posted on 7 May 2009 at 14:53

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Cash-back fraud

If you sell something online, be it in an auction or in any other way, be wary if a buyer abroad sends you a cheque for more than you asked for. You'll be asked to send some or all of the overpayment via money transfer to another individual or account. The excuse may be something like "the extra money is to pay a shipping agent to send the goods out of the UK".

Don't do this, even if the cheque has cleared in your account. A stolen cheque can be recalled by the bank, even after it has cleared. However, you won't be able to claw back the money you sent by money transfer, and the bank won't reimburse you. This type of fraud often occurs with, but is not limited to, the sale of motor vehicles and other high-value items.

For more details on this particular scam, see the Metropolitan Police's web page on the subject at www.met.police.uk/fraudalert/section/cashback_fraud.htm.

Money transfers

Money-transfer systems such as Western Union provide a quick and reliable way to send money across the world. This can be a very useful service when used properly, but if you send cash to someone you don't know and trust, you can kiss it goodbye. Scammers that perpetrate advance fee frauds often use money transfer services, as do those running lottery, auction and cash-back cons.

The recipient of the transfer must provide proof of identity, but documents can be forged. As money is handed over in cash, rather than transferred to a bank account, it can disappear without a trace when collected by a criminal.

Fake security software

A very modern type of con involves security software published by dubious programmers. You may encounter this software when looking for an anti-virus program online, or it might even install itself on your computer automatically without your permission.

Either way, when you install the software it will claim that your PC is infected with viruses, even though the only malicious software present might be the 'anti-virus' program itself. You will be nagged into paying a substantial registration fee, after which your PC will be running software that cannot be trusted.

Preventative Measures

To protect yourself from identity theft, you probably need to make some changes to your personal routine. At the very least, you should be aware of the potential value your personal information has to criminals.

A good anti-virus program and a personal firewall will go a long way to preventing keyloggers - software that logs all the keystrokes you make on your keyboard - and backdoors leaking your information on to the internet. Encryption can also help, especially when used with files created by accounts software. That way, if someone steals your computer, finds an old discarded hard disk or hacks into your computer, they still face a significant obstacle to getting your important information. We recommend using a program such as PGP (www.pgp.com) or Steganos Safe (www.steganos.com).

You should also use a password or PIN with handheld computers (PDAs), smartphones and other portable electronic organisers that can hold personal data.

Security questions

When you set up an account at a bank, a utility company or many other organisations, you'll often be asked to provide answers to some security questions. Invariably, this will include details such as your mother's maiden name. The sad truth is that employees can be corrupt or corruptible. Phone calls can even be tapped. If an employee collects or passes on details such as customers' mothers' maiden names, these can be reused by a criminal who wants to impersonate you. The same is true if a criminal listens in on your mobile phone conversations.