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Online Fraud Prevention Resources

Lily O'Halloran


Fraud prevention knowledge is vital to the success of your business. Without valid fraud prevention knowledge your business may suffer the consequences of cybercrime. Unfortunately, there are too many cybercriminals to count. Be proactive; spend some quality time educating yourself about Internet crimes and current scams. In this article, I will uncover a couple current scams and point you towards online fraud prevention organizations.


Current Scams

There are numerous scams circulating the Internet at any given time. Let’s take a look at a couple scams that could directly affect your business.

The PayPal scam is a popular one. Fortunately it is easily avoided with one easy step, which I will reveal after explaining the scam.

The set-up: A buyer on an online auction site wins your item. You send an invoice requesting payment. You receive an email from PayPal that states that the money has been deposited into your account and you can now ship the order.

The scam: That email was not sent by PayPal. Sure it looks like the real thing -- it even has the correct url when you hover your pointer over the link to PayPal, but the email is a fake one that deviously appears to be from PayPal.

How to avoid this scam: Simply go to PayPal’s web site on your own – not through the link in the email! You don’t want to use their link, because it could be a phony link used to capture your account login and password. Always go to a website on your own when checking any financial or sensitive information. Once at PayPal you will be able to verify whether or not a deposit has been made. In the case of a scam, there will not be a deposit. The property authorities, mentioned below under Resources, should be alerted.

Another popular cybercrime involves ordering merchandise with a stolen credit card number. Criminals obtain credit card numbers through a variety of means: stealing mail, digging through trash to find credit card statements, finding wallets with cards inside, and even by using a computer program with an algorithm that generates credit card numbers.

The set-up: A customer makes a purchase from your business and pays via credit card. The purchase will generally be a large order with many items and/or contain big-ticket merchandise. The order will usually contain two separate addresses: one for billing and one for shipping. You may even find that the same buyer places multiple orders in a short period of time.

The scam: The credit card number is stolen. Thieves generally use stolen credit card numbers fast and frequently. Their goal is to get as much as they can from the credit card before the owner reports it lost or stolen.

How to avoid this scam: Require buyers to provide complete information including their address and phone number. Verify that the information matches the cardholder’s information with Address Verification. Require the Card Verification Number (CVN) for all credit card orders. The CVN is located on the back of the credit card – except for American Express, which is on the front of the card – directly following the card number. The CVN can only be found on the card; therefore, the customer must have the card in hand to place an order. This definitely cuts down on the instances of fraud, but does not wipe them out completely. Any time that you are suspicious of an order, contact the customer to verify the details of an order. The few minutes you spend verifying the order could save you plenty of time, money, and stress in the long run. If you are not able to get in touch with the customer via phone or email, then the order is likely to be a scam.


Internet Fraud Resources

The only way to win the war on cybercrime, or at least stay on top of it, is for everyone to do their part. What does that mean? It simply means that you should report fraudulent activity to the proper authorities as soon as possible. The sooner the criminals are caught, the less damage they can do. Cybercrime hurts everyone: large businesses, small businesses, and consumers alike. The following list of fraud prevention resources will lead you in the right direction to reporting criminals, and to learning more about how you can avoid being caught in a cyberscam.

Internet Crime Complaint Center (IC3) – an organization partnered with the Federal Bureau of Investigation (FBI), the National White Collar Crime Center (NW3C), and the Bureau of Justice Assistance (BJA). The IC3 shares information, so filing a complaint with the IC3 also alerts the FBI to the situation. http://www.ic3.gov/

ScamBusters – ScamBusters is an organization that educated individuals about current Internet scams, credit card fraud, identity theft, and more. This website is a useful resource for up to date news on cybercrime. http://www.scambusters.com/

Anti-Phishing Working Group (APWG) – a law enforcement association committed to wiping out Internet scams and fraud. The APWG provides current news and events regarding cybercrime and prevention of Internet fraud. This is a wonderful resource for current scams, cybercrime lingo that you need to know, and more. http://www.antiphishing.org/

If you were scammed on an auction site, such as eBay or Amazon, report the fraudulent activity to them as quickly as possible. You may be able to recover any losses you incurred.



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