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Avoid Online Fraud

Ten golden rules

It's a dark night in a foreign town. You're a tourist. Do you a) wander around unlit back alleys flashing your Rolex, speaking English loudly and constantly referring to your Lonely Planet guide or b) stay in well-lit good neighbourhoods and get advice from your hotel where they are It's obvious really.

But when it comes to the internet, a depressing number of people (and businesses) lack the street smarts to avoid becoming a victim of online crime. You might think it won't happen to you - and by following a few simple rules, it won't - but cyber-fraud is on the rise. For example, Americans filed over a quarter of a million complaints about online fraud last year with losses totalling more than $200m.

A scary recent development is phishing. Criminals create a website that looks exactly like a well-known bank, an online auction site or a credit card company, even down to a similar-sounding online address. Then they send out millions of spam emails instructing people to update their details at the bogus site and creating a rich harvest of credit card numbers, bank account details and secret passwords.

Get Poor Quick

Phishing is just the start. There are a staggering number of ways to lose money on the internet, besides investing in a failed dot.com:

Online auction rip offs. You send the money but the 'seller' never sends the goods

Work from home email scams which offer easy profits but never pay

Identity theft where criminals apply for new credit cards in the your name or use your existing credit cards to buy things

Illegal theft from your bank account

Advance fee frauds, ranging from the widespread Nigerian dictator's Swiss bank account to request for prepayments to secure competition winnings or loans. Every year hundreds of people in the UK fall victim and losses of hundreds of thousands of pounds are common

Non-delivery of online purchases

Criminals exploiting your eCommerce site by placing hundreds of orders rapidly with stolen credit cards or applying for credit using a bogus company

Online Criminals are Smart

Criminals know what they are doing. Conning people is a business and they are well-practiced. They know that flashy websites create an aura of respectability but cost very little to create. They have no trouble in producing a website that looks exactly like your bank's home page. They know that people are often greedy, technologically unsophisticated and trusting. They target known suckers and share their details - some people are taken in again and again by different cons. They are good liars and totally unscrupulous.

Don't be a Victim: Ten Golden Rules


If it sounds too good to be true, then it is. Cross-check information. It's easy to do on the internet


Be extremely wary of anything that is offered in an unsolicited or spam email


Don't be suckered into paying up-front for a prize, a loan or an ex-dictator's fortune


Don't enter personal or financial information unless the web address starts with 'https://' and there is a small padlock at the bottom of the web browser window


Don't give out personal information unless you initiated the contact or are sure you know who you're dealing with


Think twice before purchasing goods or services from online sites that are not reputable


Use a credit card. This may give some protection against non-delivery. But stay wary. Entering your credit card details into a criminal's computer is never a good idea


If buying from an online auction, ask the seller questions, check feedback on them from other users and consider paying via a reputable escrow service


If selling online, validate new customers and suppliers using published information (e.g. address or phone number) and obtain a credit status report before shipping goods on credit. Consider paying extra for merchant services that take over the risk of non-payment and carry out extra security checks for you


Ensure your computer is properly secure: install a firewall, have an up-to-date virus checker, update your operating system regularly and use strong passwords

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Where Next?

Helpful tips from the BBC about buying online

Very detailed advice about preventing online fraud from the FBI

How to prevent identity theft, according to the US Federal Trade Commission

Information from the UK Police National Criminal Intelligence Service and National High Tech Crime Unit

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