The Colony resident victim of Internet fraud, trend growing
Source: Star Community Newspaper
K. Shelby Skrhak
Date: January 14, 2004
Police said the resident, who asked not to be identified, had gone online to purchase Internet advertising for his Web site. He paid several hundred dollars to a Phoenix-based company for a series of so-called "Web ads."
However, the resident never received services for his payment and soon found himself in the middle of what Phoenix police called an "Internet fraud ring."
Several months after doing business with the company, nearly $1,000 worth of unauthorized charges were posted to the victim's check card. The charges were traced back to the Phoenix Web advertising company, The Colony police said.
The site, according to police, was a decoy to trawl for debit- and credit-card numbers.
"First, they got your money by not delivering on products they promised, and second, they've got your debit card information to make fraudulent charges," said Joe Hammond, fraud investigator for The Colony police.
But police said the victim thought he was dealing with a legitimate company - the Web site was professionally designed and looked credible.
"Even a professional site can be a scam," Hammond said.
The veteran police officer said he has seen such two-pronged schemes flourish recently.
"Some sites are there just to fish for debit-card numbers," he said. "These companies will offer no services in exchange for payment or a very poor-quality product, which they hope consumers will fail to debate or tire of arguing with the company.
"Then it's a few months later that unauthorized charges start showing up on the victim's credit or debit card that they used for the transaction," Hammond said. "They get you twice."
National crime studies show that such Internet fraud is flourishing.
The Internet Fraud Complaint Center, co-managed by the FBI and the National White Collar Crime Center, received 75,063 Internet fraud complaints in 2002, totaling $54 million or $1,120 per case on average. That number is up from 2001, where national losses were $17 million, at an average of $1,000 per case.
California, New York, Florida, Texas and Illinois were the top states for both the victims - mostly males age 30 to 50 -- and the perpetrators of Internet fraud in 2002, based on the complaint center's data.
Internet auction fraud was the most-reported offense for the third consecutive year, comprising 46 percent of referred complaints. Non-delivery of merchandise and non-payment accounted for 31 percent of complaints, and credit/debit card fraud made up nearly 12 percent of complaints.
What makes it worse than other crimes is the seeming inability to prevent it.
Unlike property crimes, identity thieves never need to be in physical contact with the people they are defrauding or their property. Though they sometimes steal mail or rummage through trash, thieves can get information from a company for which victims work or even use public information, such as driver's license records, to obtain enough information to destroy someone's credit, according to the Federal Trade Commission.
"It used to be that police had more contact with the suspect who stole the information," Hammond said. "Like with check forgeries, the suspect would go inside a store, usually close to home, and forge a check. The store would then contact us, and we could look at the checks, maybe check for fingerprints."
But that's not the case anymore. The perpetrator could be in another state or country.
"It's very hard for us to work those because sometimes there's not a suspect in front of us," Hammond said.
The Internet Fraud Complaint Center warns of another similar scam, but this one isn't readily being reported to police.
Many adult Internet Web sites offer free viewing of content, as soon as a user can verify their age by providing credit card details. But the end of the trial period, the consumer will be billed for membership to the adult Web site, even though they thought they were simply verifying their age to view the content.
Many of these charges are small monthly amounts, billed on the credit card statement in a name that is obviously adult in nature. Most consumers are too embarrassed to report the fraudulent use of the card, or the amount is so small they don't bother to contest the charges.
While the amounts may be small, the fraudster bill thousands of cards to make this a worthwhile scam.
The fraud center advises against giving out credit card details over the Internet to verify age. If one does use credit cards for Internet purchases, check the credit card statement regularly and contest any charges not authorized, no matter how embarrassing they may be.
The Internet Fraud Complaint Center offers these tips for avoiding fraudulent Web sites:
*Make sure you are purchasing merchandise from a reputable source.
*Do your homework on the individual or company to ensure that they are legitimate.
*Try to obtain a physical address rather than merely a post office box and a phone number, call the seller to see if the number is correct and working.
*Send them e-mail to see if they have an active e-mail address and be wary of sellers who use free e-mail services where a credit card wasn't required to open the account.
*Consider not purchasing from sellers who won't provide you with this type of information.
*Check with the Better Business Bureau from the seller's area.
*Check out other web sites regarding this person/company.
*Don't judge a person/company by their web site.
*Be cautious when responding to special offers (especially through unsolicited e-mail).
*Be cautious when dealing with individuals/companies from outside your own country.
*Inquire about returns and warranties.
*The safest way to purchase items via the Internet is by credit card because you can often dispute the charges if something is wrong.
*Make sure the transaction is secure when you electronically send your credit card numbers.
*Consider utilizing an escrow or alternate payment service.
For information or to file a complaint, go to www.ifccfbi.gov/index.asp.
For the NCL's National Fraud Information Center, go to www.fraud.org.
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