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Online auction fraud is the most common form of internet fraud, accounting for 60% of all reports filed with the FBI and Better Business Bureau. Other forms include identity theft, phishing, and the Nigerian scam. Buyers should obtain as much contact information as possible before engaging in financial transactions.
Many of us who use the Internet on a regular basis may have our suspicions about the most common form of Internet fraud, but according to the Federal Bureau of Investigation (FBI) and other watchdog organizations, the most reported incidents of Internet fraud involve commerce auction . People who use online auction websites often report cases of fraud such as non-delivery of goods, misleading product descriptions, and providing false or deceptive business contact information. Internet fraud involving online auction sales makes up at least 60% of all reports filed with the FBI and the Better Business Bureau.
Other forms of Internet fraud, such as the Nigerian scam or phishing for personal financial information, occupy a distant second and third of online auction fraud. While auction websites take numerous steps to verify the identity of the buyer and seller, these guarantees are not foolproof. A sophisticated website for a non-existent business can be created in days, and often the only contact information available is a free or web-based email address. Internet fraud often succeeds due to a lack of accountability in the world real for online transactions.
Correctly resolving Internet fraud in online auctions can be difficult. Experts suggest that buyers get as much contact information as possible when communicating with unfamiliar sellers. Occasionally, a fraudulent seller or buyer can be traced to a single email address, but investigators prefer physical identifiers such as PO boxes, phone numbers, street addresses, or business license information. Potential bidders should make an effort to learn as much as possible about a seller before engaging in any type of financial transaction.
Another common form of Internet fraud is identity theft. Some Internet users provide an extraordinary amount of personal information online, including physical addresses, phone numbers, and email addresses. In some cases, even more personal information, such as social security numbers or bank account information, can be obtained through low-level hacking of unsecured websites. Once an identity thief has enough information to impersonate someone online, all manner of Internet fraud can be perpetrated. Unauthorized purchases on a victim’s credit card are fairly common, closely followed by access to private bank accounts and information.
Other forms of Internet fraud include the Nigeria scam, in which recipients of an unsolicited email are asked to provide a secure bank account for the transfer of frozen or illegal funds. Quite often, scammers will ask for a financial contribution to bribe officials or to cover a processing fee. Once this initial money is collected, the scammers either disappear or clean out the victim’s bank account. A similar example of Internet fraud involves the victim’s alleged winning of a previously unknown foreign lottery. Scammers promise to forward your winnings in exchange for a substantial processing fee.
Internet fraud known as phishing is also very common. Emails that appear to come from legitimate online banking websites or real-world banks can alert recipients of a recent unauthorized purchase or other action that requires immediate attention. When the victims click on the link provided in the fake email, they can be directed to a very sophisticated clone of the known website. Any personal financial information you provide in the submission form goes directly to the scammers, not the website’s rightful owners. These masters of Internet fraud can create false identities for themselves or sell the information to equally dangerous third parties.
