Cyber Fraud Online: The Fraud Examiner

Looking back at the recent history of technological innovations, the mid-1990s is generally considered the period of time during which the Internet revolutionized the way we do business. The ability to sell goods and services across vast distances and international borders with just the tap of the keyboard or a click of a mouse created almost endless opportunities for businesses large and small.

With this new frontier also came new opportunities for fraud – no surprise, perhaps, in a world where fraudsters follow the money and look for the latest scheme to help them increase their haul. What some might find surprising, though, is the level to which cyber fraud/cyber crime continues to flourish today, roughly 20 years after the beginning of the Internet revolution. In fact, if many experts are correct, it is actually increasing considerably.

In February, online protection firm iovation identified the top continents for online fraud during 2012. Those statistics are based on billions of transactions that were analyzed for geographic trends, and they reveal that credit card fraud, identity theft, and account takeover or hijacking attempts were the leading cyber crime schemes in 2012. Fraud examiners working with corporations who do business across international borders should take heed of this current landscape to better understand the threats most likely to surface:

Africa — Seven percent of all transactions were fraudulent, with the highest percentages from Nigeria and Ghana. The majority of fraudulent transactions originating from Africa targeted online dating and retail websites. The continent’s top offenses included credit card fraud, identity theft, profile misrepresentation, and online scams and solicitations.

Asia — Five percent of all transactions were fraudulent, with higher than normal percentages from Bangladesh, Vietnam and India. Nearly half of all fraudulent transactions targeted retail websites, with online dating and massively multiplayer online gaming fraud making up a solid third. Major offenses in retail included credit card fraud, identity theft and shipping fraud, while gaming offenses included gold farming, chargebacks, chat spam and theft of virtual goods through account hijackings.

South America — Four percent of all transactions were fraudulent, with Chile and Brazil recording the highest percentages for the region. Seventy percent of fraudulent transactions targeted retail websites, with credit card fraud and identity theft once again topping the list. The majority of fraudulent transactions targeted gaming and online dating, followed by financial services.

Europe — Two percent of all transactions were fraudulent, with the highest percentages from Poland, Romania and Portugal. Transactions originating from Europe that were deemed fraudulent were more evenly spread across various industries including retail, dating, gaming, gambling, financial services, travel and telecommunications.

North America — One percent of all transactions were fraudulent, with Mexico leading the list. Like Europe, fraudulent transactions from North America were spread across a diverse group of industries including retail, gaming, financial services, travel and logistics. Credit card fraud, identity theft, spam and solicitations, and account takeover attempts were most prominent.