What is Fraud?

Internet Fraud

The term “Internet fraud” refers generally to any type of fraud scheme that uses one or more components of the Internet – such as chat rooms, e-mail, message boards, or Web sites – to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of fraud to financial institutions or to other connected with the scheme. For most people, that phrase simply means that things seem to happen more quickly on the Internet – business decisions, information-searching, personal interactions, to name a few – and to happen before, during, or after ordinary “bricks-and-mortar” business hours.

People who engage in fraud often seek to take advantage of the Internet’s unique capabilities – for example, by sending e-mail messages worldwide in seconds, or posting Web site information that is readily accessible from anywhere in the world – to carry out various types of fraudulent schemes more quickly than was possible with many fraud schemes in the past.

What are the major types of internet fraud?

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

Credit-Card Schemes – Some Internet fraud schemes, which appear to be variations on the online auction schemes described earlier, involve the use of unlawfully obtained credit card numbers to order goods or services online.

Market Manipulation Schemes – Criminals are using one basic method for trying to manipulate securities markets for their personal profit. In so-called “pump-and-dump” schemes, they typically disseminate false and fraudulent information in an effort to cause dramatic price increases in thinly traded stocks or stocks of shell companies (the “pump”), then immediately sell off their holdings of those stocks (the “dump”) to realize substantial profits before the stock price falls back to its usual low level.

Auction and Retail Schemes Online – These schemes typically offer high-value items – Ranging from watches to computers to collectibles – that are likely to attract many consumers. These schemes induce their victims to send money for the promised items, but then deliver nothing or only an item far less valuable than what was promised (e.g., counterfeit or altered goods).

How Fraud Affects Business

The business world is changing every day, with revolutions in many fields, and even in the way
we do business. With all these new ways of selling or buying products, you have to be careful of fraudulent

sellers, and businesses. Many business must be careful of who the work with, having a good relationship with there partners is essential to know who they are dealing with. There are also many organizations that will have a name similar to a well known business or organization to be able to scam you. Most businesses should have a set control system that sets procedures to follow to try and ensure they will not fall into the hands of scam artists.

Not only do businesses have to be aware of fraudulent companies and operations, but consumers should be well aware of them too. Some of the more obvious scams are offers requiring credit cards, or ask for personal information, without providing much information about them. There are also companies who will name themselves after a well known organization, and collect donations, with no cause. All people must read things carefully, and know who they are dealing with before they buy or sell things to people.