You and your spouse just received a small inheritance. Not a large sum of money, but enough to take that dream vacation that you have been planning for years. You search the net for the best deals, book your travel plans, and within a few days, you and your special one are off for dreamland. After your return, you jump on your computer to start paying bills, when suddenly your bank tells you that your account is overdrawn. How can this be? You have been out of town for weeks, but what are all these charges and transfer transactions doing on your account? Welcome to the world of Cyber victims!
The Internet has been with us for nearly two decades. It has been a great tool of convenience in both our business and personal lives, but it has given the criminal element of our society a playground to perpetuate its fraudulent activities on a grand scale. And worse yet, it provides a cloak of anonymity that leverages our willingness to trust anything that looks half way legitimate. As the Internet has grown, fraudsters have also grown more brazen and sophisticated in their ability to steal from us. In the past, you could see a crook coming. Today, you can be victimized via stealth mode.
Law enforcement officials have also benefited from technological advances. They have learned how to pick up the trail of these cyber crooks, but, in case you have not noticed, over the past few years, government authorities at all levels have had to severely cut back their operating budgets, and that includes funds for law enforcement activities. There are resources that you can turn to if and when you are victimized, but the growth of cyber fraud has been like a tsunami. It may take a good bit of time before the “clean up” can take place. Recovering your funds and reputation may be a never-ending task.
How did this fraud happen in the first place?
The scale of Cyber Fraud is shocking. It has been documented that adults in 24 countries lost $114 billion in one year and spent another $274 billion of their time and effort trying to fix what was broken. The sad news is that this figure was for 2013, and experts estimate that the problem is growing at a 50% clip on an annual basis, meaning that the full cost now could easily be in the trillions of dollars.
In a recent report on this form of modern day larceny, these words summarized the danger for all of us: “Today’s cybercriminals are talented, organized, efficient, and well-funded. In the last year, they have successfully attacked numerous retail and financial organizations, taking personal and financial data of hundreds of millions of consumers to fraudulently open new accounts, take over existing accounts and commit payment fraud.”
Reading about Cyber Fraud is one thing, but experiencing it is something else. For our unlucky couple that went on a vacation spree, crooks at a travel website, unbeknownst to the page visitor, inserted a piece of “Malware” on their computer. This devious software code then reported everything back to the crooks, including keystrokes when using credit cards or when going online with home banking services. Once it was determined that a significant bank balance existed, the race was on to steal it. Malware is short for “malicious software” that includes “viruses and spyware that get installed on your computer, phone, or mobile device without your consent.”
Crooks could have also obtained critical information for accessing bank accounts by hanging around public wifi networks and intercepting relevant traffic over the public airwaves. Your logins and passwords are not encrypted at this stage. As for draining your account, there are two standard ways. First, your bank debit card data could be used to buy things online from phony storefronts, one way to get cash immediately. The other way is to establish a “conduit” account, like with PayPal, that will draft your personal account. The crooks will then use a PayPal debit card to visit ATMs at your expense.
Over a series of days, your recent inheritance could disappear. You also need to be aware that an entire section of crime-dom focuses on the local obituaries, and why not? The names of prospective receivers of large amounts of cash are right there in the paper or online for the world to see. Before the grievers have had a chance, they have already become a target for a number of fraudulent enterprises. You also need to be aware that the crooks in this area sell their information to other buyers, if they do not wish to get involved more deeply into the fraud activity.
I thought most of this type of fraud focused on big businesses like Sony?
The press is rife with major fraud stories when they involve the likes of Sony, the IRS, Target, or a host of other large entities. The stories rarely tell the tales of woe that befall the individuals, or small businesses for that matter, that have had their personal or key business information compromised. Symantec, a major firm in the security business, recently noted, “Almost 40 percent of the over 1 billion cyberattacks Symantec prevented in the first three months of 2012 targeted companies with less than 500 employees. And for the small, poorly protected companies that suffer an attack, it’s often fatal to their business.”
Believe it or not, there are fewer protections under the law for businesses than for consumers. Timelines are shorter, and businesses have to be vigilant every day on the look out for cyber theft in such areas as “safeguarding against ACH and wire transfer fraud, check fraud, account takeover, and protecting your business’ banking credentials.” The simple fact is that small businesses tend to have more money in their accounts from time to time than do consumers. Crooks know this and that most small banks do not have sophisticated fraud prevention systems that will alert their business clients of potential cyber attacks. Consequences can be severe for most small companies.
What can I do to protect myself from Cyber Fraud?
In the olden days, the best defense against fraud was always to be skeptical when approached by anyone. An unsolicited approach was always the starting point, whether as a referral from a friend, a telemarketer over the phone, or in a direct mail piece that you received. Backing away from an unsolicited response was not that difficult, as long as you recognized the red flag waving, before you were hooked by the sales pitch.
Fast forward to the modern day, and we have emails and the Internet. The unsolicited email is the more modern day approach mechanism that has been exploited for years before the advent of better technology. The term for this approach is “phishing” that first began with telemarketers and then crossed over to emails. Your email is made to look like it is from your bank or MicroSoft or some other respected company, advising you that you have been under cyber attack. If you supply your personal data, they will fix everything for you, fee gratis. Do not fall for these scams.
Access to the Internet is the next avenue of attack. The term here is a derivative of “phishing” called “pharming”. In this case, the crook exploits a weakness in a respectable website and installs software that will divert you to his phony website where he gathers your information. In the last few years, crooks have also begun to “clone” respectable sites, complete with marks and logos and names that appear legit, but are not. From either phony website, “malware” can be inserted into your computer without your knowledge that will report back to the fraudsters everything from login IDs to passwords on bank accounts, credit cards, and even forex brokerage accounts.
These technologies also have more sophisticated cousins that prey on wifi access networks. You must be extremely careful in situations where your vital information is “in the clear”, an expression that means you are vulnerable without encryption techniques to protect you. How do you protect yourself? Here are a few ways:
- Have long and strong passwords and change them frequently;
- Close unauthorized accounts that appear on your credit report;
- If compromised, file a report with local law enforcement authorities. They may not have jurisdiction, but you can use their report to work with your banks, brokers, creditors, businesses, credit bureaus, and debt collectors;
- Make sure that your security, operating system, and web browser software are current and up to date;
- Never click on any links or open attachments from a website owner or email sender that you do not respect or do not know;
- Set your browser’s security setting high enough to block unwanted downloads;
- Make sure that your Pop-Up blocker is turned on and that you only authorize Pop-Ups for respected websites. Pop-Up ads are the favored avenue for the distribution of malware;
- Be sure to back up your data, since many of these viruses can shut your entire system down to keep you in the dark for a period of time for obvious reasons;
- Make sure that every device in your household is protected and that family members understand the threats. In many homes, the fraud begins when children access the Internet. Hackers frequent their most popular sites and easily gain access to the household’s private information.
Like it or not, Cyber Fraud is big business, and it will not be going away anytime soon. It hits businesses and individuals alike by honing into cash balances, wherever they may exist. It does not discriminate, and, according to most law enforcement officials, it is very well organized and knows no boundaries when it comes to stealing. The Internet has been the “Great Enabler” of our time, but it has enabled everyone, including criminals. The difference today is that you may never see them coming.
The one truism in this Cyber mess, however, is that crooks tend to go where the resistance is the least. They do pick the low-hanging fruit, so to speak. If you want to protect yourself, then follow the advice in this article or seek advice by visiting one of the many sites devoted to protecting you from cyber crime, like the FBI, the FTC, or a public website like Staysafeonline.org. In the meantime, always remember to stay skeptical and accept that you are your first and last line of defense when it comes to Cyber Fraud!