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There are many types of fraud, and e-mail is an inexpensive and thus popular method for distributing fraudulent messages to potential victims. According to the FBI and the U.S. Secret Service, millions of dollars are lost annually to fraud. It is estimated that U.S. consumers lost $2.4 billion as a result of online fraud in 2003, with most fraud carried out by people obtaining improper access to account numbers and passwords. For your own protection, never respond to any e-mail message that asks you to send cash or to provide personal information. And, if something sounds too good to be true, it probably is! You won't receive any riches, and in fact you could get into legal trouble if you become involved with one of these scams. Some of the most common fraudulent messages are non-monetary hoax or non-monetary chain mail. Treat these as you would spam. In any case, however, if you receive an e-mail message that appears to involve money, or asks for personal information, do not respond to it! Below, you'll find information about various types of e-mail fraud. If you receive any of these types of messages, you can report them to the Federal Trade Commission at uce@ftc.gov. You can also file an incident report via the FIU Information Technology Security (ITSO) website: http://security.fiu.edu/report_incident.php Personal information scams (phishing) These scams called "phishing", use e-mail messages that appear to come from a legitimate company such as SunTrust, CitiBank, Best Buy, eBay, PayPal, or your financial/banking institution, asking you to go to a Web page to "update" or "verify" your information. They are becoming more and more common, and they are appearing more and more genuine— with graphic display of official company logos, etc. Sometimes, these messages will inform you that your account will be deleted if you do not respond, or they may claim that you placed an order or made a charge to your account. By clicking directly on the links provided in the e-mail, or by filling out the online form provided in these e-mail messages, you will provide the fraudulent party with your personal and financial information. Whenever you are asked to provide personal or financial information through an unsolicited e-mail or a Web form, verify that the source is real by going separately to that organization's Web page (do not use the link provided in the e-mail message) and forward a copy of the e-mail message you received to the ‘Contact Us’ or ‘Security Department’ e-mail address you find on the company's Web page. If you cannot locate the company or a suitable e-mail address on the Web, contact it via telephone. If you have any doubt whatsoever, ask the company to verify that the information in the e-mail message is legitimate. For more information about phishing scams, see:
Nigerian bank scams A very common type of e-mail fraud is advance fee fraud schemes. The perpetrators of advance fee fraud (sometimes referred to as Nigerian or foreign bank scams) are often very creative and innovative. This fraud is also called 4-1-9 fraud after the section of the Nigerian penal code that addresses fraud schemes. Nigerian or other foreign nationals, purporting to be officials of government or banking institutions, will fax or e-mail letters to individuals and businesses in the U.S. and other countries. The correspondence states that a reputable foreign company or individual is needed for the deposit of an overpayment on a procurement contract. Some variations of this scheme have the son or daughter of a murdered official plead for your assistance in depositing an inheritance in a U.S. bank. Individuals are asked to provide funds to cover various fees, and also asked for personal identifiers such as Social Security numbers, bank account numbers, and other similar data. Once this information is received, the victims find that they have lost large sums of money. It is hard to pinpoint how much has been lost in these scams since many victims do not report their losses to authorities due to fear or embarrassment. For more information on this type of fee fraud scam, click here. If you receive this type of message, or if you have been a victim of such a message, you may report it to the U.S. Secret Service for its ongoing investigation of this type of fraud. Sweepstakes, lottery, and prize scams Similar to the Nigerian bank scam, these scams trick you into thinking you've won large amounts of money. You sometimes have to send personal information which is then used to rob you, or you are asked for processing fees for your fictitious winnings. Be suspicious if:
Do not reply to these types of messages ! Pyramid schemes These are schemes in which a hierarchy is created by people joining under others who joined previously, and in which those who join make payments to those above them in the hierarchy, with the expectation of being able to collect payments from those who join below. Pyramid schemes are prohibited by U.S. law, by the laws of each of the fifty individual states, and by the laws of most other nations. Pyramid schemes are variously defined under these laws either as a form of gambling or as outright fraud. For an explanation of why such a scheme does not work mathematically, see: http://members.impulse.net/~thebob/Pyramid.html Ponzi schemes These are named after Charles Ponzi, who ran such a scheme in 1919-1920. A Ponzi scheme is an investment scheme in which returns are paid to earlier investors entirely out of money paid into the scheme by newer investors. Ponzi schemes are similar to pyramid schemes, but differ in that Ponzi schemes are operated by a central company or person, who may or may not be making other false claims about how the money is being invested and about the source of the returns. Ponzi schemes don't necessarily involve a hierarchal structure, as in a pyramid scheme; there is merely one person or company collecting money from new participants and using this money to pay off promised returns to earlier participants. Ponzi schemes are not necessarily illegal, but they are difficult to distinguish from illegal pyramid schemes. In almost every case, only a very few early investors actually benefit from them. Multilevel marketing (MLM) schemes Multilevel marketing plans, also known as network or matrix marketing, are a way of selling goods or services through distributors. These plans typically promise that if you sign up as a distributor, you will receive commissions for both your own sales and those of other people you recruit to join the distributors. Multilevel marketing plans usually promise to pay commissions through two or more levels of recruits, known as the distributor's downline. While some MLM schemes are supposedly legitimate, if a plan offers to pay commissions for recruiting new distributors, it likely is illegal. Most states outlaw this practice, which is known as pyramiding. State laws against pyramiding say that a multilevel marketing plan should pay commissions only for retail sales of goods or services, not for recruiting new distributors. Pyramiding is prohibited because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. When a plan collapses, most people, except perhaps those at the very top of the pyramid, lose their money. Chain mail is often a form of junk mail or spam. A chain mail message is generally sent to several people and includes instructions that each person should forward the letter to several others. Often, you may be told that you will be extremely lucky or blessed if you don’t “break the chain”; or you may be “cursed” if you do not forward the message to others. The messages may have some political or religious content that the originators want to pass around. These messages waste system resources and often grow quite large as senders append their own additions. PLEASE do not forward such messages!! E-mail fraud and hoaxes often occur in chain mail. Never send money or personal information to people on lists via chain mail, or from whom you've received chain mail. When a chain letter asks the recipient to send money or something of value to people through whom the letter passed before, with the promise that the recipient will receive money or goods from those that the letter reaches after he sends it, then it has become a form of a pyramid scheme. Though not all chain letters are pyramid schemes, and not all pyramid schemes are chain letters, the term “chain letter” is often used to mean a pyramid scheme. Do not try to participate in this type of activity; it is illegal. For information, see: http://www.usps.com/websites/depart/inspect/chainlet.htm More information ** The information in this document is based on the following resources:
** We are indebted to the Information Technology Policy Office at Indiana University, Bloomington for the research and organization of the information upon which the above content is based. See: http://kb.iu.edu/data/afvn.html |
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