Cyber-CrimeCyber-Crime

Presented by

American CrimePrevention Institute

Nationally, crime has been decreasing, but in cyberspace, crime is increasing. Many of the same scams that for years have been conducted by mail or phone can now be found on the Internet, and new technologies are resulting in new ways to commit crimes against consumers.

Types of Cyber-CrimeTypes of Cyber-Crime

• Theft of Identity - The wrongful obtaining and using of someone else’s personal data in some way that involves fraud or deception, typically for economic gain.

• Internet Fraud

Online Auctions - most involve non-delivery of goods or goods of far less value than promised. According to a report recently released by the FBI, auction fraud accounted for 43% of Internet fraud complaints

Pyramid Marketing Scams - provide financial incentives to recruit new distributors

“Nigerian Letter” – a scam in which an alleged Nigerian official seeks help moving money between bank accounts – 16% of Internet fraud.

Business Opportunities and Franchises

Work-at-Home Schemes - kits sold with false promises of profits

Prizes and Sweepstakes - phony prize awards requiring payment of fees first

Credit Card Offers - phony promises of credit cards requiring advance payment of fees

Magazine Subscriptions - fake sales or renewals for magazine subscriptions never received.

Advance Loan Fees - empty promises of loans requiring advance payment of fees

Telephone Slamming -phone service is switched without the consumer’s knowledge or consent

Telephone Cramming - billing customers for services they never ordered

Travel/Vacation - offers of free trips or discount travel that never materializes

• Downloading shareware and not paying for it

• Child Pornography

• Downloading Copyrighted Music or Movies• Cyber-stalking

• Stock Manipulation

“Pump and Dump” Schemes - they disseminate false and fraudulent information in an effort to cause dramatic price increases in thinly traded stocks or stocks of shell companies, then immediately sell off their holdings of those stocks to realize substantial profits before the stock price falls back to its usual low level.

Short-Selling or “Scalping” Schemes - disseminate false or fraudulent information in an effort to cause price decreases in a particular company’s stock

On August 31, 2000, the FBI arrested a 23-year old man, Mark Simeon Jacob, who used a computer in the library of El Camino Community College to issue a fake press release that triggered a 50% fall in the staick price of a technology company, Emulex. The company lost about $2.5 billion in value in a matter of hours. Jacob realizes about $3/4 million from trades he had made on this stock.

• Customer downloads certain programs for entertainment. Their computer is disconnected from the customer’s regular Internet service and reconnected directly to a phone number in another country

• California-based adult web site bought access to a database of over 3 million credit card numbers from a California band and placed $43 million in bogus charges in a year. The company was fined $37 million by the FTC.

Tips For Shopping OnlineTips For Shopping Online

• Use only credit cards online to make it easier to identify fraudulent charges.

• Use only a credit or charge card - never a bank debit card - for online purchases. Under the Fair Credit Billing Act, consumers are liable for a maximum of $50 if a credit card is used fraudulently and have the right to dispute charges under certain circumstances and temporarily withhold payment while the creditor is investigating them. Debit cards don’t offer such protection - using one online puts your entire checking or savings account at risk.

• Be sure to print a copy of your purchase order and confirmation number for your records.

• Check your bills carefully each month and cancel the card immediately if you find any bogus charges.

• Exercise caution when using smaller online retail sites, which tend to use off-the-shelf e-commerce software and have fewer resources to devote to security.

• Send email to a retail site asking whether a user’s credit card information is stored by the company. You can ask the company to remove your data from its database. Or, if you like the convenience offered by web sites that keep your card numbers on file, ask if the site encrypts your personal information before it’s stored. If the answer is “no,” you should shop elsewhere.

• Don’t provide credit card information in response to a solicitation.

• Regularly check your credit history through a credit-reporting company.

Tips For Avoiding Internet FraudTips For Avoiding Internet Fraud

Do business with those you know and trust. Be sure you know who the company or person is and where it is physically located. Businesses operating in cyberspace may be in another part of the country or in another part of the world.

Understand the offer. Look carefully at the information about the products or services offered, and ask for more information, if needed. A legitimate business will be glad to provide it; a fraudulent telemarketer won't. Be sure you know what is being sold, the total price, the delivery date, the return and cancellation policy, and the terms of any guarantee. The federal telephone and mail order rule, which also covers orders by computer, requires goods or services to be delivered by the promised time or, if none was stated, within thirty days. Print out the information so that you have documentation.

Check out the company's or individual's track record. Ask your state or local consumer protection agency if the business has to be licensed or registered, and check to see if it is. Call to check for complaint records with consumer agencies and the Better Business Bureau in your area.

Never give your bank account numbers, credit card numbers or other personal information to anyone you don't know or haven't checked out. And don't provide information that isn't necessary to make a purchase. Even with partial information, con artists can make unauthorized charges or take money from your account.

Take your time. While there may be time limits for special offers, high‑pressure sales tactics are often danger signs of fraud.

Don't judge reliability by how nice or flashy a web site may seem. Anyone can create, register, and promote a web site; it’s relatively easy and inexpensive. And just like any other forms of advertising, you can't assume that someone has screened and approved it.

Know that people in cyberspace may not always be what they seem. Someone who is sharing a "friendly" tip about a moneymaking scheme or great bargain in a chat room or on a bulletin board may have an ulterior motive: to make money.

Know that unsolicited email violates computer etiquette and is often used by con artists. It also violates most agreements for Internet service. Report "spamming," as unsolicited e‑mail is called, to your on‑line or Internet service provider.

Don't download programs to see pictures, hear music, or get other features from web sites you're not familiar with. You could unwittingly download a virus that wipes out your computer files or even hijacks your Internet service, reconnecting you to the Net through an international phone number, resulting in enormous phone charges.

Internet Fraud ResourcesInternet Fraud Resources

National Fraud Information Centerwww.fraud.org

U.S. Department of Justicewww.usdoj.gov/criminal/fraud

• Internet Fraud Complaint CenterA partnership between the FBI and the National White Collar Crime Centerwww1.ifccfbi.gov

• Internet Fraud (17 pgs)www.internetfraud.usdoj.gov

THANK YOU

The American Crime Prevention Institute is a division of the AEGIS Protection Group, Inc.