Computer Crime Research Center


Common sense vs online fraud

Date: October 04, 2005
By: Mary Beth Smetzer

Internet fraud is on everyone's mind these days.

Anyone with an e-mail account most likely has received dozens of e-mails offering huge monetary rewards for help in moving bank funds or fraudulent notices saying they won a lottery in the United Kingdom or Spain.

Still other Internet-related scammers contact people via a TTY phone call, a special phone relay service for the hearing-impaired. Potential victims' numbers are cadged from newspaper or Internet ads or telephone directories.

But as assaulted as computers users may feel, their chances of being defrauded over the Internet are not as great as they may suspect.

"In 2004, out of all the fraud in the United States, only 11.6 percent was from the Internet, all the rest was from traditional means," said Donald Krohn, a security officer with the First National Bank Alaska in Anchorage.

Those "traditional means" explained Krohn, rely on everyday careless consumer practices that threaten the security of their banking and credit card accounts.

"The days of leaving your doors unlocked, your purse unattended in the grocery cart or your checkbook lying around, are over," Krohn said.

Common sense, said Krohn, is the best defense for avoiding financial fraud.

"It's up to you to protect yourself," he said.

At the top of Krohn's tip list is to never have checks mailed, but to pick up new check orders at the bank.

Krohn said that 50 percent of stolen checks are stolen by someone you know, and about 38 percent of stolen account numbers are cadged from the mail or by Dumpster divers.

"People have to be more vigilant about their information in order not to become victims," Krohn said. "It's not a matter of where but when it will happen."

Krohn strongly advises keeping checks and other financial information under lock and key. Visitors to your home, or your children's friends often are the thieves, he said.

Krohn recommends keeping credit cards to a minimum and only carrying one credit card in your wallet or purse to limit the chances of larger-scale theft.

Krohn also advises knowing who you are paying by check. "They now have your account number," he warned.

And never make financial dealings over chat lines, such as cashing money orders, Krohn said.

"You don't know who they are or why they are there."

Krohn pays his bills on the Internet and uses his credit or debit card for daily transactions rather than writing checks.

"I've gone to online banking and check my checking account every day," he said. "If I catch something wrong, right away I can immediately stop it right then and there, go to my bank and open up a new account and protect myself. Businesses can do the same thing.

"All it takes is five minutes out of your day," Krohn said, "and it will save you hours and hours out of the month, if someone tries to use your accounts."

According to the bank security officer, financial institutions make sure their sites are secure and hack free.

Anyone using online banking also needs to make sure their personal computer systems are secure and clean at home as well.

Counterfeit checks and money orders are commonplace, said Krohn who teaches bank personnel and business people how to protect themselves.

"There isn't a bank around the state that doesn't see seven or eight counterfeit checks or money orders seven or eight times a week," he said.

"Let common sense rule your world," he emphasized.

Jeremy Zidek of the Better Business Bureau in Anchorage concurs.

Counterfeit checks have become much easier to create with desktop software, he said.

"Anyone with determination to do it, can do it," Zidek said.

A recent scam in Anchorage advertised for "secret shoppers" to review local businesses and restaurants for $100 per hour.

Respondents were sent a counterfeit check for $980, told to deposit it, take out their $100 fee and immediately wire back the remaining $820 via Western Union or a Wal-Mart MoneyGram, he said.

When the counterfeit check didn't clear the bank, the respondents were left hanging, Zidek said.

"That causes a whole lot of other problems, too, like bounced checks and theft charges," he said, "and it wastes a lot of time and can be very frustrating."

Some scam artists work on their own and others are highly organized, Zidek said.

"If you feel it is a scam, cut off the contact and refuse to speak to them for they can be very persuasive and manipulative," he said. "They are really trying to appeal to people's greed. If an offer is too good to be true, it probably is."

Complaints about an Internet-related scam can be filed online at the Internet Fraud Complaint Center,, a partnership between the FBI and the National White Collar Crime Center.
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