Fraud
Fraud represents one of the biggest barriers to the growth of the internet for business and commerce. The true scale of fraudulent activity on the internet may never be known since many victims prefer not to report the crime and firms opt to avoid negative publicity. Nevertheless, the problem is a growing one and this is reflected in the figures released by the Federal Trade Commission (FTC) in the USA for 2004 that revealed losses of $200 million due to fraud (The Economist, 2004). According to the FTC the most prevalent form of internet fraud involved online auctions.
The practice of so-called ‘phishing’ is another growing problem for e-businesses and consumers. This involves fraudsters creating an identical website to target companies with the aim of duping
Auctions: the buyer pays for goods that are wrong, faulty or do not appear at all
Internet access: offers of ‘free’ internet access may have hidden charges and high cancellation fees.
Credit card fraud: credit card details are requested by some sites as proof of age; this may result in
unauthorised charges.
Personal website: offers of free website access for one month, but charges via the telephone bill.
Modem scam: download a ‘free’ dialer to access adult sites but high charges follow.
Home business: pay a fee but earn nothing
Travel bargains: cheap travel has hidden charges or trip is nonexistent.
Investments: site promises increases in returns on investments that do not materialise.