All You Need To Know About Online Fraud And How It Happens

Online fraud has always been around. The shifting of commerce over to the internet has caused fraudulent parties to quickly set up their online fraud schemes. Although online fraud was always on the rise, it has become more prevalent post covid. The loss of jobs and the rising difficulty in finding new ones have led to the growth of more internet fraudsters than ever before. In these testing times of great vulnerability, it is important to keep a lookout for different kinds of fraudsters to stay safe online. Read along to find out the different types of online fraud and what you can do to better prepare yourself against it.

How does Online Fraud happen?

Fraudsters often disguise themselves to be officials who demand seemingly unimportant information from you. You must know what potential the information that you allow others to have access to holds. It may seem negligible when you are bombarded with spam emails. But the source and frequency of these emails can tell you whether these are signs of online fraud. There is more to the spam SMS that you wake up to than what meets the eye.

Some of the easy touchpoints for online fraudsters are as follows:

• Spam emails
• Spam calls
• Redirecting website traffic to websites of their choice
• Inserting malware into smartphones
• SMS and instant messaging

What makes Online Fraud prevalent?

Despite all the firewalls built around to prevent online fraud, fraudsters still get away with committing fraudulent crimes. It is becoming increasingly difficult to track them down since with an increase in people using online services there is an even bigger soar in the surfacing of online fraudsters.

This has two potential explanations:

One: Credit card information is easy to buy off and circulate. Fraudsters usually work in teams and work for glitches to work their way through and access sensitive information.

Two: Online fraud is usually of the lowest tiers of priority when it comes to prosecution. It may not always be the first form of crime to be provided with redressal. This is due to the resource and time constraints that are attached to the sensitivity of information online. It isn’t easy to tap into private information within a short period.

Different forms of Online Fraud

Online fraud has varied forms; you must differentiate and analyse all its forms to stay better prepared. Listed below are some of the most prevalent forms of online fraud:

Identity theft

When a fraudster uses personally identifiable information that aids in illegal impersonation, it is categorised as identity theft. This is one of the most common kinds of online fraud, as it is easy for fraudsters to leak information to other fraudulent websites. This is done through various methods such as hacking passwords, getting hold of security codes, etc.

Friendly fraud

This type of fraud takes place in a very unassuming way. When a fraudster gets hold of your purchase information, it is easy for them to make changes to your purchases.

The fraudster may claim that the order never reached them or that they had made the payment twice to benefit from the service provider.

Physical fraud

This is the most predictable type of fraud: a fraudster stalls your credit/debit card and makes purchases in your name. It is important to take immediate action if you realise that your card has gotten stolen or has gone missing.

Disguised phishing

In this type of online fraud, your credit card information or other sensitive personal detail is extracted via a fraudulent SMS or email and used to make unauthorised purchases. Beware of messages that ask you to click on a link or install faulty malware. Fraudsters online often pose to look credible and promising.

Triangulation fraud

This type involves the fraudster setting up a fake website that is very similar to a real one. When you order something from this website, this transaction is used to collect your data and credit card information. Once the fraudster gets their hand on this information, they order off the real website and send the order to you. This order would have been purchased with your credit card details, and you ended up paying twice.

Preventive measures against online fraud

With adequate knowledge and precautionary measures, you can stay away from online fraudsters.

• Use an up-to-date and reliable third-party payment processor
• Use credit code verification (CVV) and address verification systems (AVS)
• Make sure all the websites you purchase from are secured with HTTPS
• If you run an online business, use updated and high-quality software to protect it
• While doing high-risk transactions, invest in a good fraud detection software
• If you run an online business, make sure your fraud risk assessment is in check

Conclusion

Online fraudsters have been better equipped than ever to access personal information.

The government has even launched a national helpline to better contain online fraud. The helpline is controlled by the state police and functions in several states and union territories. The defrauded money is tracked along its trail, and measures are taken to stop its further flow.

Even public and private sector banks are on board with the helpline and its reporting platform to better assist customers like you to stay protected against fraud online.

But prevention is better than cure, and being aware of the different perils of online fraud can help you conduct easy and secure transactions.

It is important to ask the right questions and to seek the right solutions. That is why financial advisors such as Piramal Finances are much sought after. Because when it comes to putting your hard-earned money online, it is important to be cautious every step of the way.