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IC3 lists top nine frauds impacting eCommerce
MADISON, Wis. (11/28/12)--The Internet Crime Complaint Center's (IC3) most recent Scam Alert issue Monday listed the top nine types of fraud impacting eCommerce.

The report, based upon information from law enforcement and complaints submitted to the IC3, details recent cybercrime trends and new twists to previously existing cyber scams.

IC3 said a payment management company created the list, which also identified the frequency of attack and revenue loss.

In ranked order, the top nine fraud attacks identified were:

  1. Clean Fraud--The term describes the willingness and ability of thieves to provide more and better personal information in card-not-present transactions, information that in isolation gives the appearance of legitimacy to the transaction (electran.org).
  1. Account Takeover--Account takeover is one of the more prevalent forms of identity theft. It is becoming increasingly prominent and is a growing point of financial exposure for businesses and consumers. The takeover occurs when a fraudster obtains an individual's personal information such as an account number, password, username or Social Security number and changes the official contact information (mail/email address) or adds another user to an existing account. By doing this, the fraudster establishes an opportunity to make transactions without the victim's knowledge (kount.com).
  1. Friendly Fraud--Also known as "friendly fraud chargeback,"  this fraud occurs when  consumers make an Internet purchase with their own credit card and then issues a chargeback through the card provider after receiving the goods or services. When a chargeback occurs, the merchant will always be responsible for loss of funds, regardless of what it did to verify the transaction. There is no way to verify the authenticity of the transaction, which is in fact legitimate, because the consumer is the one who is not legitimate (wikipedia.org).
  1. Identity Theft--Identity theft is a when someone pretends to be someone else by assuming that person's identity, typically in order to access resources or obtain credit and other benefits in that person's name (wikpedia.org).
  1. Affiliate Fraud--In this type of fraud, bogus activity generated by an affiliate attempts to generate illegitimate, unearned revenue. Fraudulent activity by affiliates comes in both automated and non-automated varieties. Automated scripts attempt to mimic the activity of legitimate, human visitors. Non-automated schemes may involve coordinated efforts by humans actively generating excess clicks or registrations (softwareprojects.com).
  1. Reshipping--In reshipping, or postal forwarding, scam victims typically are offered an at-home job that involves repackaging stolen goods--frequently consumer electronics--and forwarding them, often outside the U.S. Scammers ask victims to pay their own shipping charges, and pay reimbursement and compensation with a fake check. In addition to seeing their own paychecks bounce, those who fall for reshipping scams may be liable for shipping charges and even the cost of goods purchased online with stolen credit cards (monster.com).
  1. Botnets--A botnet is a collection of compromised computers under the remote command and control of a criminal "botherder." Most owners of the compromised computers are unwitting victims. They have unintentionally allowed unauthorized access and use of their computers as a vehicle to facilitate other crimes, such as identity theft, denial of service attacks, phishing, click fraud, and the mass distribution of spam and spyware. Because of their widely distributed capabilities, botnets are a growing threat to national security, the national information infrastructure, and the economy (fbi.gov).
  1. Phishing/Pharming/Whaling--Phishing (also called pharming or whaling) e-mails trick people into sending money or providing personal information such as usernames, passwords, credit card details, and Social Security numbers to unauthorized individuals who hijack their information and use it to commit identity theft (dos.ny.gov).
  1. Triangulation Schemes--Triangulation is another method of credit card fraud. The fraudsters operate from a website and offers goods at heavily discounted rates and with shipping before payment. The fraudulent site appears to be a legitimate auction or traditional sales site. The customer must provide information, including name, address and valid credit card details, to the site. Once the fraudsters receive the details, they order the goods from a legitimate site using another stolen credit card number and apply for the goods with the customer's name and address. The fraudsters then go purchase other goods with customer's credit card numbers. This process causes initial confusion for authorities so the fraudulent Internet company can operate long enough to accumulate a vast amount of goods purchased with stolen credit card numbers (people.exeter.ac.uk).
Several legitimate direct sales companies have seen a large surge in fake orders placed with their consultants. The consultants are contacted through the legitimate "find a consultant" link located on sales websites.

In each instance, the suspects place large orders and agree to pay by check. The consultant receives the check for a much larger amount than the total cost for the products. The consultant is instructed to cash the check and send the difference back to the buyer via wire transfer. The IC3 has received several complaints filed by consultants from companies affected by this scam.
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