What is Internet Fraud?
How to report Internet Fraud?
Tips to Avoid Internet Fraud


What Is Internet Fraud?

The term "Internet fraud" refers generally to any type of fraud scheme that uses one or more components of the Internet - such as chat rooms, e-mail, message boards, or Web sites - to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of fraud to financial institutions or to other connected with the scheme.

If you use the Internet with any frequency, you'll soon see that people and things online tend to move, as the saying goes, on "Internet time." For most people, that phrase simply means that things seem to happen more quickly on the Internet -- business decisions, information-searching, personal interactions, to name a few - and to happen before, during, or after ordinary "bricks-and-mortar" business hours.

Unfortunately, people who engage in fraud often operate in "Internet time" as well. They seek to take advantage of the Internet's unique capabilities -- for example, by sending e-mail messages worldwide in seconds, or posting Web site information that is readily accessible from anywhere in the world - to carry out various types of fraudulent schemes more quickly than was possible with many fraud schemes in the past.


How to Report Internet-Related Crime

Internet-related crime, like any other crime, should be reported to appropriate law enforcement investigative authorities at the local, state, federal, or international levels, depending on the scope of the crime. Citizens who are aware of federal crimes should report them to local offices of federal law enforcement.

Some federal law enforcement agencies that investigate domestic crime on the Internet include: the Federal Bureau of Investigation (FBI), the United States Secret Service, the United States Customs Service, the United States Postal Inspection Service and the Bureau of Alcohol, Tobacco and Firearms (ATF). Each of these agencies has offices conveniently located in every state to which crimes may be reported. Contact information regarding these local offices may be found in local telephone directories. In general, federal crime may be reported to the local office of an appropriate law enforcement agency by a telephone call and by requesting the "Duty Complaint Agent."

Each law enforcement agency also has a headquarters (HQ) in Washington, D.C., which has agents who specialize in particular areas. For examplthe FBI and the U.S. Secret Service both have headquarters-based specialists in computer intrusion (i.e., computer hacker) cases. The National Infrastructure Protection Center (NIPC) was created to support investigations of computer intrusions. NIPC has moved from the FBI into the Department of Homeland Security under the Information Analysis and Infrastructure Protection Directorate. The NIPC Watch number for reporting computer crimes is 202-323-3205. The U.S. Secret Service's Electronic Crimes Branch may be reached at 202-406-5850. The FBI and the Customs Service also have specialists in intellectual property crimes (i.e., copyright, software, movie, or recording piracy, trademark counterfeiting). Customs has a nationwide toll-free hotline for reporting at 800-BE-ALERT, or 800-232-2538.

The FBI investigates violations of federal criminal law generally. Certain law enforcement agencies focus on particular kinds of crime. Other federal agencies with investigative authority are the Federal Trade Commission and the U.S. Securities and Exchange Commission.

Many state and local entities also investigate and prosecute computer-related crimes. The National Association of Attorneys General (NAAG) has compiled a list of prosecutors and investigators from state and local law enforcement agencies who are responsible for the investigation and prosecution of computer and computer-related crime within their respective jurisdictions. More information on the NAAG's Computer Crime Point-of-Contact List CCPC is available from the NAAG website. (Please note that this list has been compiled for the use of law enforcement and prosecutors, and that many of the contacts on the CCPC list are not authorized to respond to general questions of law from the public or to provide legal advice on specific issues and cases. Members of the public seeking to report a crime, or seeking assistance relating to the investigation or prosecution of a computer crime, may contact the police department within the county, state, or other jurisdiction where the criminal activity is occurring, or the FBI.)


Tips to Avoid Internet Fraud

Internet Auction Fraud

. Understand as much as possible about how the auction works, what your obligations are as a buyer, and what the seller's obligations are before you bid.
. Find out what actions the web site/company takes if a problem occurs and consider insuring the transaction and shipment.
. Learn as much as possible about the seller, especially if the only information you have is an e-mail address. If it is a business, check the Better Business Bureau where the seller/business is located.
. Examine the feedback on the seller.
. Determine what method of payment the seller is asking from the buyer and where he/she is asking to send payment.
. If a problem occurs with the auction transaction, it could be much more difficult if the seller is located outside the US because of the difference in laws.
. Ask the seller about when delivery can be expected and if there is a problem with the merchandise is it covered by a warranty or can you exchange it.
. Find out if shipping and delivery are included in the auction price or are additional costs so there are no unexpected costs.
. There should be no reason to give out your social security number or drivers license number to the seller.

Non-Delivery of Merchandise

. Make sure you are purchasing merchandise from a reputable source.
. Do your homework on the individual or company to ensure that they are legitimate.
. Try to obtain a physical address rather than merely a post office box and a phone number, call the seller to see if the number is correct and working.
. Send them e-mail to see if they have an active e-mail address and be wary of sellers who use free e-mail services where a credit card wasn't required to open the account.
. Consider not purchasing from sellers who won't provide you with this type of information.
. Check with the Better Business Bureau from the seller's area.
. Check out other web sites regarding this person/company.
. Don't judge a person/company by their web site.
. Be cautious when responding to special offers (especially through unsolicited e-mail).
. Be cautious when dealing with individuals/companies from outside your own country.
. Inquire about returns and warranties.
. The safest way to purchase items via the Internet is by credit card because you can often dispute the charges if something is wrong.
. Make sure the transaction is secure when you electronically send your credit card numbers.
. Consider utilizing an escrow or alternate payment service.

Credit Card Fraud

. Don't give out your credit card number(s) online unless the site is a secure and reputable site. Sometimes a tiny icon of a padlock appears to symbolize a higher level of security to transmit data. This icon is not a guarantee of a secure site, but might provide you some assurance.
. Don't trust a site just because it claims to be secure.
. Before using the site, check out the security/encryption software it uses.
. Make sure you are purchasing merchandise from a reputable source.
. Do your homework on the individual or company to ensure that they are legitimate.
. Try to obtain a physical address rather than merely a post office box and a phone number, call the seller to see if the number is correct and working.
. Send them e-mail to see if they have an active e-mail address and be wary of sellers who use free e-mail services where a credit card wasn't required to open the account.
. Consider not purchasing from sellers who won't provide you with this type of information.
. Check with the Better Business Bureau from the seller's area.
. Check out other web sites regarding this person/company.
. Don't judge a person/company by their web site.
. Be cautious when responding to special offers (especially through unsolicited e-mail).
. Be cautious when dealing with individuals/companies from outside your own country.
. The safest way to purchase items via the Internet is by credit card because you can often dispute the charges if something is wrong.
. Make sure the transaction is secure when you electronically send your credit card numbers.
. You should also keep a list of all your credit cards and account information along with the card issuer's contact information. If anything looks suspicious or you lose your credit card(s) you should contact the card issuer immediately.

Investment Fraud

. Don't invest in anything based on appearances. Just because an individual or company has a flashy web site doesn't mean it is legitimate. Web sites can be created in just a few days. After a short period of taking money, a site can vanish without a trace.
. Don't invest in anything you are not absolutely sure about. Do your homework on the investment to ensure that it is legitimate.
. Do your homework on the individual or company to ensure that they are legitimate.
. Check out other web sites regarding this person/company.
. Don't judge a person/company by their web site.
. Be cautious when responding to special investment offers (especially through unsolicited e-mail).
. Be cautious when dealing with individuals/companies from outside your own country.
. Inquire about all the terms and conditions.
. If it sounds too good to be true it probably is.

Nigerian Letter Scam

. Be skeptical of individuals representing themselves as Nigerian or foreign government officials asking for your help in placing large sums of money in overseas bank accounts.
. Do not believe the promise of large sums of money for your cooperation.
. Guard your account information carefully.

Business Fraud

. Purchase merchandise from reputable dealers or establishments.
. Try to obtain a physical address rather than merely a post office box and a phone number, call the seller to see if the number is correct and working.
. Send them e-mail to see if they have an active e-mail address and be wary of those that utilize free e-mail services where a credit card wasn't required to open the account.
. Consider not purchasing from sellers who won't provide you with this type of information.
. Purchase merchandise directly from the individual/company that holds the trademark, copyright, or patent.
. Beware when responding to e-mail that may not have been sent by a reputable company.