The Internet has opened up many possibilities for fraud, and a fear of fraudulent use of credit card details in insecure websites is one of the main factors that limit people's willingness to use the Internet for business transactions.
One ingenious type of fraud involves tricking consumers into believing that they are on a reputable company's website. To achieve this, a website is established that looks exactly like that of a major business-perhaps a travel agent or airline. The Internet URL is very similar to that of the real company' site. Perhaps it has one or two additional characters, or perhaps the letter 'l' is substituted for the number 'I' or vice versa. This is enough for the site to show up in searches for that company's name. Consumers thus enter the fraudulent website believing that they are actually at the reputable company's real site.
The false website shows several very attractive Internet-only deals. The consumer makes a booking, and provides credit card details. Of course there is no booking. The purpose of the site is to dupe unsuspecting customers into parting with their credit card details. After a few weeks, the website is closed without a trace. Perhaps the first time that customers realize what happened is when huge bills start appearing on their credit card statements.
The fraud works because the cost of establishing a false duplicate website is small-perhaps only a few thousand dollars.