Impact of online Identity Theft on Consumers & Organisations
Essay by review • February 17, 2011 • Research Paper • 1,294 Words (6 Pages) • 1,708 Views
Essay Preview: Impact of online Identity Theft on Consumers & Organisations
Internet fraud has become a major issue due to the ever increasing population of internet users, because the internet is such an easy solution to fast sufficient services readily available for busy lives that’s is why most of us are now dependant on the internet in some shape or form and each time we use the internet we input data that are related to use from our name, address and even bank details with the assurance that the site is safe and trustworthy, but this is not always the case because the security system implemented like all things in this world has weaknesses.
Online hackers uses programs to penetrate these weaknesses of database system which holds valuable consumer information and data, which they can use for to carry out fraudulent activities such as; credit card scams using stolen identities acquired through the system, or open numerous bank accounts to make overdraft withdrawal using addresses they acquire from the database they’ve hacked. The main areas that online criminals target are bank details and financial records of customers from various organisations that they can get hold of large sums of money so it is worth the risk of hacking.
Credit card fraud scheme is when u use your card to shop online, giving details of your account in order to make a purchase, from here if you are careful you can stumble upon a mimicked site that is monitored by fraudsters using a program to record the details entered and these details is then use to make transactions from the victims account into the another account of the criminal or used for purchasing items instead of gaining hard cash,
Phishing is a scheme used by fraudsters to lure online customers to fake websites so they can reveal their bank details either through a purchase or through asking them to verify their account to make sure that the accounts is still active, this had lead to 55% rise in losses from online fraud against banks totally round about 23mil for the first half of 2006. chip and pin was introduced in 2004 in the hope to combat credit card fraud, and did decreased by 13% by the end of 2005, but even with this method in place the percentage of bank losing money from fraud carried out over the telephone, online or mail order rose by 5% and fraud using duplicate or counterfeit cards rose by 16%, this is due to the fact that criminals have access to tools and knowledge to the details of individual magnetic stripes behind a card and the card is then used in places where technology is less high-tech or used abroad because it is hard to detect that the card is being used illegally.
Another case of identity theft comes from a Swedish bank Nordea where the bank is unknowingly scammed out of around $1.1mil through a 3 month time period from customer’s account, of those who had used the internet to access their account and was targeted by the fraudsters using malicious programs to obtain personal loging details and then used these details to withdraw. The attackers use the program called Trojan (haxdoor.ki) to work over the system like nothing is going on, it then downloads, but the victim is first asked by an automated email sent to them saying that the attach file is an anti-spy ware or anti-spam ware, the Trojan works like a listen for vital details and site that the user visits and records the path that the user takes, after having recorded these information the Trojan then alerts the user that there is something wrong with the page and ask the user to resend the information again, with as little as 2 codes the criminal can access an account to withdraw or make a transfers from one account to another. Due to this big scam the bank had to close down its online operation in 2005 because the system was penetrated once.
The following are facts taken from experian white paper on internet Fraud Company base:
пÑ"? 9 of 10 fraudsters get away with their crimes because only 9% of online fraud case reported to police result in a prosecution
пÑ"? 70% of companies surveyed agreed that internet is the most risky way to the market, due to the fact that 52% of companies agree that internet fraud is a problem within their company and 55% admits that it’s a growing concern in their company
пÑ"? Retailers become aware of the criminal activity far too late to take action, 48% claims it takes up to a month before they are aware of what is happening and 18% admits it takes them up to 7 weeks
пÑ"? Only 15%of companies have automated systems in place to detect fraud and others companies are hesitate to bring in 3rd party to help verify customer details such as name and address
пÑ"? Fraudsters are more confident in their ability and the weak systems that they spend little or no time at all to cover up their tracks
пÑ"? 58% of those surveyed believe that on line fraud is a barrier preventing successful trading on the internet.
The following are facts taken from experian white paper on internet
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