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Online fraud

Online fraud

These days' people are hugely dependent on the internet for everyday activities. However, the rapid rise in digital activities has allowed fraudsters to access individual and business details and commit data breaches and identity theft. 

It can be first-party fraud where one misrepresents their identity or gives false information to get a product, or they indulge in fronting (where someone else's name is used to get a service from the firm), de-shopping (buying items to return and get a full refund), claiming non-delivery or getting a chargeback where one denies they ordered the product and claim to get a refund. 

Fraudsters rely heavily on the information provided by the internet in the form of transactions and communication, from entertainment to banking and shopping. 

For example, many users download software from third-party sources, often without knowing their source of origin, and many use the same passwords for multiple accounts. In addition, more than half of the users claim they open emails from addresses they do not recognise.

Hence the number of cases of online fraud is increasing each year, and most such cases include – account takeover, direct frauds, or scams related to the domain name, recovery, internet dialler, lottery, mass marketing, auctions, psychic, charity, money muling, dating, rental and work from home.

Last year, scammers used methods to crack the two-step authentication, and users were advised to integrate the fingerprinting techniques to secure systems. 

Nowadays, firms cannot ignore the losses caused by online fraud. Those in the business of storing information in the cloud or those accessing customer data need to have effective strategies to handle cybercrimes. 

Many suffered on online dating sites that were based overseas. The fraudsters spend ample time to win the victim's trust, and then they request fund transfers either for their flights or other personal reasons. It can be difficult for the local regulatory body to track such crimes as they are based outside the country. 

In the UK, the consumer body complained that banks wrongly blamed customers while the scams took place outside the banking system through tech platforms. 

Most losses reported by the banks were related to debit and credit cards in the previous years, but now the scammers are entering the authorised push payment methods. In addition, they are hacking users' email accounts and operating their accounts as genuine customers. 

Sometimes, it involves a huge transfer of funds to buy the property or build works. In some cases, the criminals work as delivery firms or partners, or they dupe investors into bogus schemes or trap them through online dating websites. 

Many suffered due to impersonation scams and untrustworthy clone imitation of authentic websites that required entering bank details or other sensitive information. In addition, some made losses as the criminals exploited the low-interest-rate environment to post advertisements on social platforms offering high return investments.   

One of the most difficult to identify was the website domain fraud, where the scammer used email phishing to send links to the victims. 

How To Prevent It?

  • To avoid falling for a phishing scam, one should get a legitimate address, check the sender address carefully, and be aware of the bank's authentic websites and email addresses, eCommerce sites, and government sites. 

  • One should not make payments where the sender asks to pay urgently or want you to send financial details or PINs. Instead, contact your institution directly through authorised phone numbers or email addresses if you doubt any mail or message. 

  • One should always avoid free wi-fi because even in the most secure settings, the provider usually collects the data of users' browsing habits and sells it to different firms. Therefore, even those with a password are not considered safer.

  • eCommerce companies should not ignore the need to integrate adaptable and scalable cybersecurity solutions. 

  • In the case of online fraud, it is often very difficult for law enforcement to get evidence, time and resources to prosecute the criminals. Hence, it is necessary to have strict rules for data theft used to commit fraud. 

  • Users should install apps to detect device Ids, bots and emulators to confirm the users' logins block suspicious logins and have systems to recognise the multi-accounting attempts to avoid account takeovers. 

  • Individuals and firms who steal personal and financial information and sell it to other firms should be held for stealing phone numbers, social security numbers, billing details, passwords and contact information.

Types of fraud

A-Z of fraud

To help understand which fraud you've been affected by, we've categorised them into an alphabetical list.

What is fraud and cyber crime?

Cybercrimes can be of two types. First, it can be cyber dependent, where the fraudsters use online devices to convince the victim to accept their offers.

Advance fee fraud

If you are trying to get a loan for a house or a car, they ask to meet the provider to get the financing arrangement and pay the finder's fee in advance.

Corporate fraud

Corporate frauds can be complicated, committed either by the firm or an individual. Nevertheless, it mostly involves cheating where the employee or the firm.

Individual fraud

There are many types of individual frauds related to advance fees, investments, insurance brokers, bogus tradespeople, Ponzi schemes, pension liberation.

Online fraud

Hence the number of cases of online fraud is increasing each year, and most such cases include – account takeover, direct frauds, or scams related domain names.

Identity fraud and identity theft

The criminal uses the stolen identity of another person living or deceased to conduct unlawful activities like obtaining goods or services in another's name.
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