“I’m writing you this mail to intimate you with a business transaction involving the transfer of $29.6 million for safekeeping. It’s our hope that as a respectable businessman, you would be capable of handling high capital investment and control. . . . My colleagues and I now want to quickly transfer this funds to a safe nominated account for possible investment abroad . . . “– From Pius Obaseki, Director and Funds Coordinator of the Finance/Contract Department of the Federal Ministry of Petroleum Resources.
I found the Internet Fraud Complaint Center (IFCC) report released in April interesting reading. The IFCC is a program of the FBI and the National White Collar Crime Center, and its mission is “to address fraud committed over the Internet.”
According to IFCC statistics, about 75,063 complaints were filed in 2002 and the “total dollar loss from all referred cases of fraud was $54 million, up from $17 million in 2001, with a median dollar loss of $299 per complaint.”
There are many types of online fraud. The most common type last year was auction fraud, which represented 46% of all complaints. Nondelivery and nonpayment of merchandise accounted for 31%, with credit card fraud at nearly 12%.
A great example of this kind of fraud involved Teresa Smith, who offered PCs for sale on eBay and other auction sites. The scheme was simple: Get people’s money before delivery and then never ship and never refund.
EBay responded to complaints by canceling Smith’s account, but she would just start again under another alias. Ultimately, Smith defrauded about 300 victims whose losses totaled more than $800,000!
This is the kind of fraud that happens every day in the real world, and the only thing that makes it exceptional was that it happened online. What also distinguishes it is that the defrauder offered a legal product that the victim had every expectation of receiving, making the victim’s complaints legitimate.
But one complaint the IFCC continues to receive in high volume concerns the Nigerian letter fraud (see example up top), for which there are no real victims, only crooks pretending to be victims.
The Nigerian letter fraud starts with correspondence from someone whose message basically says: “I got a lot of money through X (usually some crooked means) and I’ll give you a cut if you’ll help me get it out of the country (because of some complicated problem).”
The scammers say they need so much money for this (bribing officials?) and so much for that, until the victim has coughed up significant funds. Then the scammers disappear. Big surprise.
The IFCC got 16,164 complaints about the Nigerian letter fraud last year, a 500% increase over the 2001 volume, and 74 individuals lost money totaling $1.6 million.” Even more impressive (if that’s the right word), the Nigerian letter fraud attracts the highest dollar loss per incident – a median loss of $3,400.
Those cases in which there was either a loss of money or personal information were referred to the appropriate local, state or federal agencies. But why?
Why would we want to spend a dime protecting people who are so stupid to get caught out this way and crooked enough to think that the transaction they are entertaining is ethical?
Anyway, with the recent surge in spam we’re going to be see a huge rise in these kinds of pseudo-victim crimes. And along with that, the litany of other frauds and scams is going to increase. And they are going to affect the staff you support.
If you haven’t started an Internet risks training program in your company, which includes information about online scams and frauds, you will see many people get burned. And worst of all, these people could burn your company at the same time.
Channel your flames to backspin@gibbs.com.
