Executive Fraud Blog

Many of you may have been exposed to the original online stock scheme where spammers will send out stock picks on penny stocks creating buzz that artificially drives up the price of these worthless stocks. As the price hits the daily high the spammers liquidate their own holdings and walk away with the profits leaving those buyers with the worthless stock. This old fraud scheme has been manipulated and redirected at users of public computers specifically hotel users.

Online criminals have developed software that will track the key strokes of these computers especially when these guests are checking out their online portfolio accounts. By stealing their accounting identity the fraudsters are able to buy large holdings in these penny stocks to drive up the price then they are able to liquidate their position while leaving the stolen account stuck in the those stocks. Companies such as E*Trade and TD Ameritrade have been left with the liability to reimburse investors nearly $20 billion in one quarter. This type of securities fraud is becoming more common with the amount of users of online trading companies tips 30 million. The best way to prevent this from happening to you is to make sure that you have a secure connection to the internet and ensure that you do not have malware on your computer by running virus scans and anti-adware software.

Banks around the country have been faced with larger instances of credit card fraud while victims are often times left to foot the bill. On the chance that you are protected under your coverage it is often the case that banks are unable to reveal the source of the fraud. Their response is often that they must remain silent because there is currently a police investigation of that particular location/person. It seems to reason though if card holders where told where they were being defrauded from they would consider avoiding credit card use while in those areas. There seems to be a disconnect between stopping the credit card fraud and providing consumers with enough information to properly handle fraud prevention.

The #1 online complaint is auction fraud
This fraud accounts for over half the complaints that are made to the FBI's Internet Crime Complaint Center. Other common complaints include credit card fraud, spam, and non delivery of goods. The most costly internet scheme right now is the Nigerian spam letter that has several different variations that all promise you free money for cashing "real" money orders that clear your bank account prior to them actually clearing the issuing bank which eventually declares the money order as fraudulent. The best protection from these attacks is to understand nothing every comes for free and no one legitimate will ever ask you for sensitive information via email (ie. credit card number)

In regards to eliminating auction fraud, consumers are best apt to doing this by using secured forms of payment such as paypal or feedback oriented auctions such as ebay/amazon. Most services guarantee the delivery of your goods and your payment up to certain amounts so make sure to check your protection limits against fraud.

Click fraud is any form of false internet traffic to websites that pay per click for advertising. Since these advertising programs began, savy computer programmers have been designing programs that automate the actual click fraud. Marketing executives have estimated that click fraud represents at least 20% of the fees that are paid by the companies paying for internet advertising.

Last year that was a man from California that tried to blackmail Google with the threat of releasing open source software that would allow any user to scam Google by fraudulently clicking the advertisements. The US Attorney's Office is now ready to press charges against these fraud schemes and in the near future there will surely be some scammers that are made an example.

Other than automated clicking there have been two other methods of click fraud that have come into the scene in the last few years. With the abundance of cheap labor in China and India there are companies that solely click advertisements for their clients in order to generate advertising revenue. The other method of click fraud that is now common is attacking a competitor by clicking their links and draining their marketing budget. These tactics are on the rise as is the value of creating a solution.

The average cost per click is now around $0.45 and the total industry has sales of approximately $3 billion. Currently the main protection for these marketers are using IP address tracking but there is also software called IP spoofers that will cycle through different IP addresses. It will be interesting to see how this battle for the most innovative technology will resolve.

A federal jury has convicted the former owner and president of ATE Tel Solutions of wire fraud in a scheme to defraud the E-Rate program, according to the U.S. Department of Justice.