Internet Fraud vs. other Fraud
Internet fraud, just like real world fraud, is a big problem. It distinguishes itself from non-Internet fraud in 4 main ways:
1) Economies of scale
Even a fraud almost no one will fall for is economically viable. For example, Nigerian Scam letters, which presumably almost no one would ever believe, can be send to massive numbers of potential victims via spam. Even if only .0001% of those targeted become victims, it's enough to make the scam successful.
2) Innovative fraud
There are a lot of new opportunities for fraud, for example some of the more advanced phishing schemes. There are some pretty intelligent and innovative Internet fraudsters out there.
3) More potential Fraudsters
People who would never consider trying to perpetrate real world fraud sometimes do attempt (and succeed) at online fraud. This is analogous to hackers who cause massive damage and financial loses to business, who would never consider breaking all the windows in their school or other brick and mortar vandalism.
4) Jurisdiction issues
For example, its almost impossible to catch or prosecute a hacker in China or even France (two countries that traditionally have not cooperated on Internet crimes).
Its also interesting that the two main areas of growth in computer crime (ref: FBI computer crimes division) are extortion and attacks via work from home employees machines.
Also, there is allegedly more money in Internet crime than drugs these days!
1) Economies of scale
Even a fraud almost no one will fall for is economically viable. For example, Nigerian Scam letters, which presumably almost no one would ever believe, can be send to massive numbers of potential victims via spam. Even if only .0001% of those targeted become victims, it's enough to make the scam successful.
2) Innovative fraud
There are a lot of new opportunities for fraud, for example some of the more advanced phishing schemes. There are some pretty intelligent and innovative Internet fraudsters out there.
3) More potential Fraudsters
People who would never consider trying to perpetrate real world fraud sometimes do attempt (and succeed) at online fraud. This is analogous to hackers who cause massive damage and financial loses to business, who would never consider breaking all the windows in their school or other brick and mortar vandalism.
4) Jurisdiction issues
For example, its almost impossible to catch or prosecute a hacker in China or even France (two countries that traditionally have not cooperated on Internet crimes).
Its also interesting that the two main areas of growth in computer crime (ref: FBI computer crimes division) are extortion and attacks via work from home employees machines.
Also, there is allegedly more money in Internet crime than drugs these days!
posted by Ted Demopoulos at 7:59 PM
Comments on "Internet Fraud vs. other Fraud"
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Robert Porter said ... (Tuesday, February 21, 2006 10:47:00 PM) :
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Ted Demopoulos said ... (Wednesday, February 22, 2006 7:02:00 AM) :
post a commentScariest of all is a new form of Trojan that detects when you connect to your bank via online banking, then rides in on your real authenticated connection and quietly empties your account with you watching!
And since the "attack" comes from your own computer it may be interesting trying to prove you did not actually do it!
Bobster
Hey Bobster,
I don't bank online - call me a Luddite!
The risk/reward is not worth it for me. No one's perfect - I might let some malware in somehow, or more likely my wife might. And who's responsible then, me/wife or the bank??
Ted