Academic journal article Trends & Issues in Crime and Criminal Justice

Challenges of Responding to Online Fraud Victimisation in Australia

Academic journal article Trends & Issues in Crime and Criminal Justice

Challenges of Responding to Online Fraud Victimisation in Australia

Article excerpt

The Australian Bureau of Statistics (2012: np) categorises personal fraud as being either identity fraud or a consumer scam. A consumer scam is a fraudulent invitation, request, notification or offer, designed to obtain someone's personal information or money, or otherwise obtain a financial benefit by deceptive means. Identity fraud involves the theft of an individual's personal details without their consent and includes both identity theft and credit or bank card fraud (ABS 2012: np). For the purposes of this paper, online fraud is defined as the experience of an individual who has responded via the internet to a dishonest invitation, request, notification or offer by providing personal information or money that has led to a financial or non-financial loss or impact of some kind. To fall within this definition, an individual must have received an unsolicited invitation via the internet and responded in some way that has led to a loss or other negative impact. While the loss need not necessarily be monetary in nature, cases in which individuals reply to fraudulent requests merely to solicit more information but without incurring a loss or other negative impact, are excluded from the current discussion.

There are many different types of online fraud, although almost all involve so-called 'advance fee' schemes entailing unsolicited invitations, which offer some benefit or reward that will be provided in return for assistance and the payment of a fee in advance of receiving the benefit or reward. Sometimes the promised reward is considerable, with invitations mentioning millions of dollars that will be provided in return for a small advance payment of a few hundred dollars. These include the infamous West African frauds in which assistance is sought to move stolen funds from Africa to a safe country in return for a proportion of the capital sum.

Lottery fraud, inheritance schemes and romance fraud all feature the common element of a requirement to transfer funds to the offender in return for receipt of lottery winnings, an inheritance, or a promised romantic relationship, respectively (Ross & Smith 2011). Other types of online fraud seek personal information (often bank account details and evidence of identity information) that are then used to withdraw funds from the victim's bank account without permission (Cross 2012). Still other types of fraud simply employ the internet as a medium to perpetrate traditional frauds such as investment fraud, market manipulation, or Ponzi scheme, which offer impossibly high returns on funds invested with dividends paid out of capital received for investment from other victim investors.

A range of technological devices and procedures are used in connection with online fraud-as described by the UK Sentencing Council (Kerr et al. 2013)-including:

* Phishing-when consumers are tricked into transmitting financial information to a fraudulent website where the information is later housed for use in fraudulent activities;

* Pharming-in which victims' computer systems are compromised via hacking or malware, or where software redirects victims to fake websites where they are asked to enter their details;

* Skimming-where personal information is 'skimmed' from plastic cards by devices covertly attached to card readers; and

* Malware-when malicious software such as viruses are used or installed on computers in order to alter functions within programs and files (Kerr et al. 2013: 22).

There are also a number of new and emerging techniques:

* SMiShing-personal information obtained via SMS;

* Vishing-personal information obtained via phone;

* Malwareused to collect personal information via Smartphones;

* Spear-phishing-highly targeted spam;

* Koobface on social media-where victims are sent messages via their social media site with a virus;

* Social phishing-whereby the perpetrator gains the trust of an individual and accesses their friend list or as a phisher gains unauthorised access to a user's account and starts sending spam to the user's direct contacts;

* Keylogging viruses-these viruses capture login details or passwords for bank accounts, for example, which can then be used or sold;

* Fraud in virtual platforms such as 'Second Life'; and

* Online rental scams-whereby fake rental flats are advertised online and victims send personal information and/or deposit payments to prove they can pay the rent (Kerr et al. …

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