Internet Fraud: An Overview of Classifications, Government Actions, and Consumer Protection

December 14, 2006 Internet Fraud:
An Overview of Classifications, Governmental Actions, and Consumer Protection
Internet fraud is an increasing threat to our technological society, which thrives on the advances and benefits of the Internet and e-commerce. With the increased growth and dependence of the Internet, creative individuals have found ways of conveying fraudulent schemes as legitimate goods and services. Not only does Internet fraud cause harm to individuals and institutions, but it also damages the consumer confidence of valid Internet businesses and e-commerce. There are many forms of Internet fraud which Internet patrons need to be aware of and cognizant of. This paper will explore major classifications of Internet fraud, provide information on how to deal with Internet fraud, relay actions taken by the government to thwart Internet fraud and prosecution thereof, and also take a detailed look into one type of Internet fraud especially, identity theft.
According to the Department of Justice (http://www.usdoj.gov/criminal/fraud/text/Internet.htm), Internet fraud is any type of criminal scheme that uses one or more components of the Internet to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions or to transmit the proceeds of fraud to financial institutions. Major types include; online action and retail scams, business opportunities or work-at-home scams, investment schemes, phishing, and identity theft and fraud. Seventy-five percent of fraudulent parties contact their victims via web-sites, while the remaining twenty-five percent contact their victims via e-mail correspondence as reported by the National Consumers League’s National Fraud Information Center/Internet Fraud Watch program, Internet Scam Fraud Trends