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risk_management:protection
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Online Fraud Protection

Online Fraud belongs to the group of illegal interactivities on the internet summarized as cyber criminality. One of the most common online fraud activities is the attempt of stealing personal and financial information. With the look of legitimate e-mails or claiming from apparent trustful sources these messages ask for various types of personal and confidential information, including online IDs and pass codes, Social Security numbers and account numbers.1) Sometimes users make it very easy for criminals to get their data within social media networks. Besides illegal activities online fraud could also include 'confidence tricks' which aim to harm especially inexperienced users. The success of those activities is then a consequence of a high information asymmetry, more concrete a lack of information on side of the user.

History

With the increased proliferation of the internet new ways of harming people grew due to missing technical and data security reasons or experience of costumers. While for Germany the number of online fraud activites within the last years didn't grew, the financial damage obviously increased.2) MacInnes et al. explain this with the rapid rise of online businesses and e-commerce transactions3). 91% of German internet-users between 30-49years already used the internet for shopping activities4). Another reason can be seen in the low investment costs for criminals to collect personal data.

Protection strategies from vendor perspective

Trustability

Emotions and trust are the sales promoter for e-commerce activities.5) Therefore it is very important for companies to create a good and trustful atmosphere to enhance the conversation probability. To demonstrate reputation companies might use seals of approval like Trusted Shops or from EHI Retail Institute. These seals guarantee on their web pages a minimum of certain standards in data security and delivery reliability. Another way to achieve trustability is by joining campaigns for enhancing user knowledge: The company ebay for example is partner of the initiative 'Buying online-with sanity'.

Secured wire transfer

With paypal et al. there are several electronic payment options existing which guarantee a payback of money when differences between buyer and vendor exist. Offering these systems enhance trustability. Companies accepting credit card can engage in 3rd party fraud screening service such as Fraudlabs Pro to identify fraud risk in real time.

Data and page security

To prevent any attacks from hackers internet shop providers need as a minimum a firewall and an antivirus program. To secure the data transfer between user and companies can use ssl-protocols.

Intellectual property

Different laws guarantee the property of intellectual inventions, trademarks and creative acts of individuals or companies. To protect intellectual property book-sellers might only show parts of their books within the internet to prevent unauthorized copies. Music companies might only offer the possibility to hear 30 seconds of a song before buying. Another way to protect photos is to do a digital seal in the centre of the photos.

Protection strategies from user perspective

Tyler et al. (2008) support the notion users ought to play a more active role in fraud prevention.6)

Enhancing knowledge

Especially uneducated and older people become victims of fraud.7) Hence, reducing information asymmetry is one of the goals German governmental and public initiatives focus on. They inform about new dangers for internet users and protection strategies:

Saving private data

The more information criminals have, the more opportunities they will have to take advantage of them. Users can reduce online fraud by not giving any personal data on unknown web pages.

Reducing danger of identity theft

Opening of new accounts for selling or buying customer goods on webpages will be more difficult the less information criminals have. Therefore publishing of private data within social networks should be considered carefully.

Phishing

Phishing is the misconduct of reputable sources in mailing-activities for demanding any information. Users should not provide any passwords or private data on behalf of email requests.

Pagejacking

Search results in search engines might forward to unexpected pages. Therefore users should look for wrong URL-spellings in the browser-field or be critical when pages are hosted outside expected countries (e.g. de/com-ending).

Wire transfer fraud

Especially in case of supposed contests people were asked for wiring money to pay fees, taxes or customs before getting their prize. Wiring transfer fraud is in general every transfer of money to unknown remittees. Due to the fact that money can not be transferred back, people should consider if there exist good reasons to pay.

Advance fee scams

Dubious vendors often ask for paying in advance. Users should be careful when paying has to be done before delivering.

Further Information

1) “Online Fraud Protection.” Community Bank:. N.p., n.d. Web. 09 Dec. 2012.
2) Bundeskriminalamt. Cybercrime. Bundeslagebild 2011. Rep. Wiesbaden: BKA, 2011.
3) , 6) , 7) Pan, Gary, Poh-Su Seow, Themin Suwardy, and Evelyn Gay. “Fraud: a review and research agenda.” Accountancy Business and the Public Interest 10 (2011): 138-78. Web. 09 Dec. 2012. <http://visar.csustan.edu/aaba/Seow2011.pdf>.
4) Netzgesellschaft. Eine repräsentative Untersuchung zur Mediennutzung. Rep. BITKOM, n.d. Web. 09 Dec. 2012. <http://www.bitkom.org/files/documents/BITKOM_Publikation_Netzgesellschaft.pdf>.
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risk_management/protection.txt · Last modified: 2015/05/12 08:46 (external edit)