The month of February provided another stark reminder that cyber criminals continue to be on the prowl in online dating communities.

According to a recent Toronto Sun article, “Money scammers target online daters,” Durham Regional Police received several reports—all during the weeks following Valentine’s day—from women claiming they had been scammed by men they met online. After several months of courtship and communications with these men, women then said they were asked to wire money overseas to help with work-related charity efforts. Some women were also conned into providing personal identification and financial details to the suspects and were debited “substantial amounts of money from their personal accounts.” (more…)

For some time now I’ve been writing about the importance of businesses working together to combat cyber crime. Echoing this sentiment is retired Air Force General Dale Meyerrose, who sat down this week with The New New Internet to discuss the importance of building partnerships, the challenges of building those alliances, and the question of who is ultimately responsible for protecting critical infrastructures in cyberspace.

In the article, “Cybersecurity Partnerships are Absolutely Critical, says Gen. Dale Meyerrose,” Meyerrose, now the VP for Cyberspace Solutions at Harris Corporation, expressed his concerns surrounding cybersecurity and the economic impact of cyber crime:

“The [issue] of most concern to me is cyber crime… elements of cyber crime, particularly economically for our country, have come to the point where we need to really be concerned. There have been estimates that we’ve lost over a trillion dollars a year to cyber crime in the last couple years. And it now exceeds all other crime in terms of the amount of money.” (more…)

Identity fraud, and the number of its victims, continues to rise each year.

According to a recent article,  “Number of identity fraud victims jumps,” a Javelin Strategy & Research survey found that the total number of ID fraud victims in the U.S. rose to last years to 11.1 million—a 12% increase over the year before. The study also found that 2009 losses due to ID fraud totaled  $54 billion (in comparison  $48 billion in 2008).

But why, with so many anti-fraud management solutions and techniques available, does ID fraud continue to climb year-over-year? According to James Van Dyke, president and founder of Javelin, the continual evolution of technology is one of three main factors contributing to the increase of Identity fraud. Van Dyke sees online crime continuing to escalate, due to: (more…)

A recent survey revealed that the overall perception of online fraud continues to be a growing concern for both online merchants and consumers. The result, not surprisingly, is a lack of consumer confidence and, therefore, the loss of profits for online businesses. An article, “Online retailers see fraud as a major threat,” summarizes the findings of Cybersource’s 2010 UK Online Fraud Report, and includes some eye-opening statistics about how fraud – and the perception of fraud – directly impacts the shopping habits of online consumers and the fraud policies of Internet businesses.

From the point of view of retailers, the survey found:

• 57% of merchants see online fraud as the greatest threat to their business
• Merchants expect to lose an average of 1.8% of their income to online fraud
• Merchants reject 4.6% of online orders due to suspicion of fraud

When it came to consumer attitudes about fraud, the study found:

• 71% of all consumers had concerns about online fraud
• 50% of people still don’t shop online in the UK (representing a large untapped market)
• 78% said they would never use their mobile phone to make purchases (more…)

Love may be blind, but blind love on the Internet can cost you more than heartbreak – it can cost you your life savings.

Each year, thousands of individuals put their trust in other people that they meet online. Even when a relationship never moves out of the virtual realm, a deep emotional connection (or the illusion of one) can develop surprisingly fast. Unfortunately, this can set unsuspecting victims up for a rude awakening when an online romance results in emotional abuse, financial fraud, or both. In an attempt to educate people about this unfortunate possibility, the Office of Fair Trading (OFT) is promoting “Scams Awareness” month and warning lonely hearts of the dangers of Internet dating scams this Valentine’s Day. (more…)

A recent fraud study conducted by Javelin Strategy & Research and LexisNexis confirmed what we already knew: identity fraud is on the rise, and so are the losses that online merchants face. What we learned from the report, however, is that the impact on retailers is much worse than originally thought.

Based on the study results released by LexisNexis, U.S. retailers incurred losses of $191 billion in 2008 due to identity theft, stolen merchandise and fees associated with chargebacks. Even more alarming is the fact that, between the three primary groups surveyed—merchants, financial institutions and consumers—the cost of fraud to retailers is almost 10 times greater than the losses absorbed by financial institutions and 20 times greater than the losses suffered by individual consumers. (more…)

After a three-year investigation by the FBI and the UK’s Serious Organized Crime Agency (SOCA), British authorities announced they have arrested the sophisticated network of cyber criminals behind DarkMarket, one of the world’s top criminal websites. The site, which operated out of an unassuming London Internet café, was an international cyber supermarket for stolen credit card and bank account information that officials say has cost the banking industry tens of millions of dollars. (more…)

Velocity-based rules have long been used by merchants to help identify potentially fraudulent online behavior. Typically, velocity-based rules function by looking at commonalities in personal information, across accounts and transactions. For example, a warning may be set off if multiple accounts, or multiple orders, all have different names but the same shipping address. Another example might be if multiple accounts were all set up using the same password.

Unfortunately, these kinds of velocity checks are of limited value against more sophisticated fraudsters who have the information, the technology, and the general savvy to set up multiple accounts that all, on paper, look completely different—different names, different credit card numbers, different shipping addresses, different IP addresses. (more…)

Well it’s been a good year for our blog. We’ve tried to address a number of topics all relevant to helping businesses fight online fraud. As the year wraps up, I thought it would be a good time to summarize some of the themes from the year and highlight some of our posts. While we touched on a number of topics, a few main themes remained consistent:

Device reputation is an important component of best practice fraud management – 2009 was a difficult year for business, but one trend that emerged was an increased visibility into how valuable device fingerprinting and reputation solutions can be as part of any sophisticated fraud prevention architecture. Some of our articles on this topic:

• The First Five Benefits You Will See From Device Reputation
• Not All IP Addresses are Created Equally
• Device Fingerprinting Techniques – Several Choices

Online retailers are under attack – Online retailers continue to find themselves under attack and we touched on this topic a number of times this year. Here are some of the highlights: (more…)

There was a time when spam wasn’t considered dangerous; it was merely obnoxious. Unfortunately, it seems that time is quickly coming to an end. For example, take the recent article on CNN.com: “Cyber crime poses threat to e-commerce.” The article—about increasing trends in online spam and related fraud—cites a statistic from antivirus-software provider Symantec which claims that the percentage of spam that contains malicious software has increased 900% over last year.

Additionally, as perpetrators of online crime get smarter and savvier, it’s becoming increasingly difficult to distinguish between legitimate email and spam. Especially during the holidays—a busy time for fraudsters, as we’ve already discussed—there are plenty of opportunities to take advantage of the upswing in online shopping for Christmas. For example, take a look at the top 10 subject lines for seasonal spam, as reported in the December issue of Symantec’s monthly report, State of Spam: (more…)

If you’re curious to know what’s topping people’s wish lists this holiday season, just take a look at online sales. No big surprise, electronics are where it’s at. Based on information provided by fraud prevention experts (and iovation partner) Retail Decisions (ReD), the top-ten list of products sold online during Black Friday was dominated by GPS systems, televisions, digital cameras and video game consoles.

Besides providing statistics on what online purchases people were spending their hard-earned money on during Black Friday, ReD also noted that online criminals were out in force, busy spending other people’s money. “Whilst online retailers witnessed a huge upturn in sales this Black Friday, fraudsters are also ’spending’ more, with an average value of $248 per transaction online, 23% more than the average genuine customer,” said ReD’s CEO, Carl Clump. (more…)

According to ComScore, a Virginia-based firm that tracks online shopping, consumers have already purchased over $19 billion worth of products online this holiday season. That’s an increase of 3% over last year. While that’s good news for online merchants, Mike Cronin points out in his article, ’Tis the season to be wary of online scams, that it also provides new opportunities for online scammers.

Much like online businesses, cyber criminals are working around the clock this time of year. But instead of sending out legitimate emails promoting online sales, fraudsters are sending out emails containing bogus links that closely resemble real retail websites. While their intent is to steal credit card information from unsuspecting online shoppers, the real victims in this crime will end up being online merchants. (more…)

There was a blog post recently on Wallet Pop titled “Online theft not the main cause for identity fraud.” In it, author Josh Smith does a good job calling out the differences between identity theft and identity fraud. In short, identity theft is when someone’s personal identity information has been stolen; identity fraud is when that stolen information is used to commit financial fraud or some other kind of crime. While the two are inevitably related to one another, they are not the same thing.

In the case of identity theft, it’s a common myth that malware, botnets, and other internet scams are to blame; however, Smith cites a study done by Travelers Insurance that actually shows that the majority (78%) of incidents of identity theft actually occur offline. This indicates that peoples’ fears may have been, at least in part, misplaced. Individuals would benefit from an increased awareness and vigilance in all aspects of their life, not just online.

This being said, there still remains the question of identity fraud: what happens once someone’s personal information has been compromised? This is where online businesses still need to be on high alert, because online sites (and not physical stores) will likely remain the No. 1 target of identity fraud. Here’s why:  (more…)

This week the U.S. House of Representatives is debating over whether online gambling should be regulated or simply prohibited. At the same time, the recent release of a study, commissioned by WiredSafety and conducted by Harvard professor Malcolm Sparrow, asserts that regulation, and not prohibition, would best mitigate the risks posed by online gambling. This line of thinking may be in part why implementation of the Unlawful Internet Gambling Enforcement Act (UIGEA) has been delayed, and why many are now discussing a separate bill, H.R. 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act.

(more…)

We have exciting news to share! Now that the nomination phase of the  first annual 2010 Internet Dating Industry Awards is complete, iovation has been named a finalist for the Best New Technology.  This award recognizes the best individual technology created by a vendor for dating or matchmaking sites. The award will be announced at the 7th Annual Internet Dating Conference. (more…)