Online fraud

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Internet fraud is a type of fraud which makes use of the Internet. This type of fraud varies greatly and appears in many forms. It ranges from Email spam to online scams. Internet fraud can occur even if partly based on the use of internet services and is mostly or completely based on the use of the internet.

Types of fraud

  • Online automotive fraud
    • A fraudster posts a nonexistent vehicle for sale to a website, typically a luxury or sports car, advertised for well below its market value. The details of the vehicle, including photos and description, are typically lifted from sites such as and
    • An interested buyer, hopeful for a bargain, emails the fraudster, who responds saying the car is still available but is located overseas. Or, the scammer will say that he is out of the country but the car is a shipping company. The scam artist then instructs the victim to send a deposit or full payment via wire transfer to initiate the "shipping" process.
    • To make the transaction seem more legitimate, the fraudster will ask the buyer to send money to a fake agent of a third party that claims to provide purchase protection.
    • The unwitting victims wire the funds and subsequently discover they have been scammed.
    • In response, auto sales websites often post warnings to buyers, for example, those on Craigslist which warn not to accept offers in which vehicles are shipped, where funds are paid using Western Union or wire, etcetera, requesting those postings to be flagged as abuse.
  • Charity fraud
    • The scammer poses as a charitable organization soliciting donations to help the victims of a natural disaster, terrorist attack (such as the 9/11 attacks), regional conflict, or epidemicHurricane Katrina and the 2004 tsunami were popular targets of scammers perpetrating charity scams; other more timeless scam charities purport to be raising money for cancerAIDS or Ebola virus research, children's orphanages (the scammer pretends to work for the orphanage or a non-profit associated with it), or impersonates charities such as the Red Cross or United Way.
    • The scammer asks for donations, often linking to online news articles to strengthen their story of a funds drive. The scammer's victims are charitable people who believe they are helping a worthy cause and expect nothing in return.
    • Once sent, the money is gone and the scammer often disappears, though many attempts to keep the scam going by asking for a series of payments. The victim may sometimes find themselves in legal trouble after deducting their supposed donations from their income taxes.
    • United States tax law states that charitable donations are only deductible if made to a qualified non-profit organization.[4] The scammer may tell the victim their donation is deductible and provide all necessary proof of donation, but the information provided by the scammer is fictional, and if audited, the victim faces stiff penalties as a result of the fraud.
    • Though these scams have some of the highest success rates especially following a major disaster and are employed by scammers all over the world, the average loss per victim is less than other fraud schemes. This is because, unlike scams involving a largely expected payoff, the victim is far less likely to borrow money to donate or donate more than they can spare.
  • Gambling fraud
    • Internet gambling has become a $15 million industry. Every online casino needs an operation license to conduct their business, and the operators may lose their license or even face imprisonment if they do not follow the regulations.
    • Online casinos have become an extremely lucrative as well as competitive industry, with operators introducing new promotions on a daily basis. Promotional activities include attractive bonuses, prize money, jackpots and other offers aimed at making patrons' online casino experience as memorable as possible. Having a secure software like a 128-bit SSL (Secure Socket Layer) encryption is important.
  • Fake check scam
    • There are many possibilities for use of the fake check scam. Some may include scam Craigslist buyers, fake online jobs, fake lotteries, scam tech support refund, etc. However, they all work in a very similar way.
    • The scammer promises to pay the victim money via mailed check with added excess money and requests the victim to return the excess money. When the victim receives and deposits the check, money is first added to the victim's bank account, until a week later when the check is bounced and the money will disappear. Some banks may charge a bounced check and/or negative balance fee.
    • Before the check is bounced, the scammer requests for returning the excess money via gift cards, money order, etc. which in turn, the victim loses money and paying the scammer.
    • This is often associated with fake job scams, where the scammer "hires" people online to print fake checks (with workers not knowing they are fake nor knowing it is part of a scam) and mailing them to potential victims using postages paid by the scammer.
      • Because scammers usually live in foreign countries, they "hire" people in countries with potential fake check scam victims so that they don't have to mail internationally and be able to put a domestic from address.
      • Thankfully, people in scambaiting communities have been successful with wasting scammers' money on postages and helping victims by not sending a fake check and warning them of the scam.
  • Fake lottery and giveaway
    • Phishing websites that say the victim is randomly selected for a free prize. They often claim to be from Google, Facebook, YouTube, etc. to make it look more legitimate, but they are all fake.
    • They often appear in redirect or popup ads.
    • The purpose of the fake website is for the scammer to collect victims' personal information such as email addresses and phone numbers to sell to advertisers, causing victims to receive unsolicited spam and scam emails, phone calls, SMS messages, etc.
    • Some require victims to pay a "shipping fee", as a method to steal their credit/debit card information.

See Also