Since when did hackers start worrying about moral turpitude? In the underground cybercrime economy where lies, deception and maintaining complete anonymity are the key attributes for success, I find it ironic that trust, yes trust, has climbed the ladder of qualifications that today’s online fraudsters need to profit in the digital black market.

In the article, “Cybercrime is now a booming industry,” the new Global Risks for 2012 report says that along with a steady increase in cyber attacks on businesses and governments around the globe, the top concern for illegal digital data sellers is maintaining trust with their customers.

According to an ethical hacker in India, the digital black market has become so competitive that entrepreneurial cyber criminals depend on their trustworthiness, along with free trials, discounted offers and money-back guarantees on stolen goods, to succeed in the shady underworld. (more…)

Turns out, crime does pay, at least for hackers committing identity theft over the Internet.

In the article, “Why Internet crimes go unpunished,” security expert Roger Grimes breaks down some interesting numbers around cybercrime, and how hackers are (to put it mildly) beating the odds. According to the FBI’s 2011 Internet Crime Report, of the more than 300,000 complaints that netted criminals $1.1 billion in 2010, law enforcement agencies convicted an average of one crook for every 50,635 victims. In other words, as Grimes eloquently states:

Steal someone’s identity and your odds of being caught are almost infinitesimal.

With all the hacks and fraud headlines 2011 will be remembered for, that’s definitely not the way we want to ring in the New Year. But as Grimes also warns, if we aren’t careful we could see history repeat itself as criminals not only continue defrauding computer users, but launch recycled attacks against the explosion of worldwide mobile device users, who could fall victim to the same old PC tricks. (more…)

Some say shopping on your smartphone or tablet is still in its infancy stage. While this may be true to a certain degree, however, several new holiday shopping reports show that mobile commerce is growing up pretty fast.

In the article, “Mobile commerce played an integral part of the 2011 holiday season,” online retailers capitalized on the smartphone and tablet phenomenon by boosting their m-commerce promotions during the past holiday season. As a result, a company spokesperson at Gilt Groupe, a US-based shopping website, said mobile-only promotions contributed to 20% of all sales during November and December, with mobile traffic and sales increasing well over 100% in December 2011 compared to December 2010.

“Mobile continues to play a large role in driving Gilt’s business. And we continue to utilize mobile as a channel to reach both existing and new customers wherever they are.”

North America electronics retailer, Crutchfield Corporation, also saw triple-digit increases in mobile traffic and sales, a trend the Crutchfield’s director of e-commerce, Todd Cabell, believes will continue to climb in the new year. (more…)

Getting to know someone on an Internet dating site requires the exchange of personal information. Things like where you grew up, your hobbies, pet’s name and favorite shopping destinations provide personal data that is essential to building an online relationship. Unfortunately, it’s also the same information that fraudsters use to steal peoples’ identities and commit ID fraud and a host of other unwanted activities.

In the recent article, “How to steal an identity in seven easy steps,” software developer, Herbert Thompson, shows us just how easy it is to collect personal information that allows fraudsters to gain access to somebody’s personal and financial online accounts. This is disturbing news, especially when you consider that roughly 40% of web users are ‘likely’ or ‘very likely’ to provide their personal information in one of six online scams, like the Ponemon Institute, commissioned by PC Tools, recently discovered after interviewing over 1,000 UK web users.   (more…)

Every online user, including fraudsters, were granted a free pass by the Justice Department earlier this week for lying on the Internet. Okay, I know what you’re thinking: “How can we prosecute somebody for lying?” Fibbing is an age-old human behavior that even the DoJ says it doesn’t have the time or resources to bring cases against everyone who lies on dating websites.

According to the Politico article, “Free pass for dating site liars,” people can take comfort in knowing that they don’t have to worry about being prosecuted or hauled off to jail for telling a little white lie over the Internet. While this certainly makes sense, at the same time we’re still walking on shaky ground when it comes to online lies, falsifications, profile misinterpretations, or whatever you want to label it. The fact is, when it comes to identity fraud, fake accounts or other crimes on romance sites, lying is typically the basis for the crime. It sets the stage for deeper criminal activity that can cost victims both emotional and financial hardships, not to mention damage to the dating site’s reputation.  (more…)

When it comes to victims of online dating fraud, we’ve heard the stories of how unsuspecting lonely hearts have lost tens of thousands of dollars. The emotional hardships and financial setbacks that victims of online romance scams go through can be devastating. This week, we saw another story that left one victim with no money, homeless, hungry, and eventually hospitalized with pneumonia in a foreign land thousands of miles from home.

In the article, “American Stranded in Ukraine in Online Dating Scam,” former write-in candidate for governor of Arizona, Cary Dolego, traveled to the city of Chernivti, Ukraine, eager to meet up with the woman he fell in love with online and one day hoped to marry. She never showed.

Turns out, Dolego was a victim of an online dating scam that stemmed from account takeover. Apparently, someone or some group hacked into a woman’s account on an international dating website and was communicating with Dolego on behalf of a woman named Yulia. While the woman later said the account on the dating site that Dolego had been corresponding with was hers, she claims she was not part of the scam. (more…)

Businesses have always been challenged with knowing whether a customer is genuine or not. It’s a critical part of any company’s daily business operations, and how they protect themselves from fraud losses that impact the bottom line. But with online merchants taking more orders from new and evolving technologies, the ability to identify the good from the bad is a great challenge.

As cyber criminals take advantage of various technologies to bypass businesses’ digital security efforts, any business that wants to succeed in today’s rapidly-changing business environment needs to have layered and effective security measures in place that allow them to know when they are dealing with a legitimate customer or a clever fraudster.  (more…)

“It seems to me that if there was any logic to our language, trust would be a four-letter word.”

This clever, yet pertinent quote from the film, “Risky Business,” has always stuck with me. Today, it’s more relevant than ever when it comes to trusting someone in an online social environment.

As much as we would like to believe what other people say over the Internet, the bottom line is that most separate our real-life persona from our online persona to a certain degree. For some, it’s an outdated photo. For others, it’s embellishing the truth or telling a little white lie. When it comes to online trust, however, the most dangerous kind if personal misrepresentation are those who make a living at deceiving others for profit or personal gain. That’s right. I’m referring to online fraudsters. (more…)

Traditionally, students seeking financial assistance to further their education were required to complete a ton of paperwork and provide in-person photo IDs and other official personal documents. While much of the required information for applying for financial aid remains the same, the growth of online education programs for colleges and universities have changed in how applicants complete applications and deliver their information.

Today, anyone seeking federal aid for the thousands of online courses can do so while maintaining their anonymity. Without the physical checkpoints traditionally used to cross-reference and validate that applicants are who they say they are, higher education online programs are being hit with what’s being dubbed financial aid fraud, or distance-education fraud.

In the recent New York Times article, “As Online Courses Grow, So Does Financial Aid Fraud,” financial aid scams have become a serious problem. In a number of high-profiled cases, distance-education fraud rings have stolen hundreds of thousands of dollars using various techniques. For example, a woman submitted applications on behalf of 23 unknowing prison inmates that she gathered information on while working in the prison’s education department. The applications were admitted and granted more than $450,000 in federal aid, including nearly $125,000 for books, transportation and living expenses. (more…)

Much like the annual gains of any financial market, the cyber crime economy is growing.

According to the article, “Cyber crime hit 431 million adults in 24 countries,” a recent Norton cybercrime report found online crime jumped 3% compared to its 2010 study, costing fraud victims more than $388 billion worldwide over the past year.

Eating up 35% of the global cybercrime bill were U.S. fraud victims, who spent $139 billion on cybercrime last year. That amounts to 141 victims per minute, an alarming statistic even for Norton’s consumer cybercrime expert, Helen Malani. (more…)

Understanding the evolving fraud threats that financial services organizations face today is crucial to preventing the damaging affects that credit application fraud, account takeovers and identity theft can have on their business, customers and bottom line.

To help European financial services leaders understand how to thwart these increasing risks, iovation is scheduling one-on-one meetings with Europe’s major financial institutions at the upcoming Financial Services Technology (FST) Summit, October 4-6, in Lisbon, Portugal. If you are interested in learning about the latest online fraud trends and best practices for fraud prevention in retail banking and commercial banking, please reserve some time for us to talk.

As the world’s leading provider of fraud preventative device reputation services, iovation helps businesses assess online transaction risks before they happen. Our active partnerships with leading credit issuers, foreign exchange service providers and banking clients around the globe are designed to stop account takeovers, ID theft, ACH or debit fraud, credit application fraud and more. (more…)

When it comes to studying the impact of online fraud, the discussion always turns financial. For online retailers whose business models rely on Internet transactions to generate revenue, fraud losses that range anywhere from tens of thousands to millions of dollars a year can have a significant impact on their overall business profits.

This is why combating increasingly sophisticated fraud techniques requires online merchants to identify fraudulent orders faster and boost the efficiency of their fraud management functions, without increasing overhead. For one North America retailer whose fraud losses were eating into profits and affecting the customer experience, implementing the right fraud prevention service enabled them to drop annual fraud losses from a peak of $2 million to $180,000.

In our newly downloadable case study, “Online Retailer Uses New Fraud Detection Systems To Cut Fraud Loss Rates,” Forrester Research principal analyst, Andras Cser, shares how the online merchant was able to reduce fraud loss by $1.8 million after deploying iovation’s ReputationManager 360 along with our partner’s case management system. (more…)

For banks around the globe, protecting customer accounts is becoming more challenging as cyber criminals work together to create more sophisticated attacks with the aim of defeating existing security measures. In fact, fraudsters have become so efficient at figuring out new ways to access critical data from a bank’s IT system that the article,“European banking industry lacks guidance to combat cybercrime,” suggests that the entire ecosystem — from government to banks — should take a cue from the criminals themselves.

Three months. That’s how long financial institutions have before they are obligated to comply with the Federal Financial Institutions Examination Council’s compliance requirements, which kick in January 2012. At this point, the question on everyone’s mind is, “Is my bank ready?” If not, iovation is here to help. We’ve just released a new white paper to help financial institutions meet the FFIEC guidelines, and also protect themselves against future security threats.

The fact that cyber criminals have figured out ways to circumvent virtually every single authentication technique financial institutions use today, it’s become imperative that banks not only meet the FFIEC’s upcoming security guidelines, but exceed them, if they expect to stave off increasing security attacks.

One of the keys to stopping innovative fraudsters from compromising banks’ cyber defenses is utilizing a system of layered security. This is something the FFIEC has reinforced with a supplement to the original Authentication in an Internet Banking Environment guidance, along with updated supervisory expectations for customer authentication, layered security, and other controls for authorizing transactions for financial institutions that offer Internet-based products and services. (more…)

Sometimes finding the right fraud prevention solution is the easy part. The real challenge comes when you have to sell the project to your executive team.

Does this scenario sound familiar? If so, you’re in luck. On September 20th, iovation’s senior sales executive, Cory Swick, along with one of our online global marketplace clients, will share their unique perspectives on how IT fraud professionals can properly sell their fraud prevention projects to upper management. The presentation will take place at this year’s Merchant Risk Council Fall Platinum meeting in Chicago, beginning at 4:00 p.m. in the Grand Ballroom at the Drake Hotel.

The presentation, “Selling Your Fraud Strategy Internally and Overcoming Challenges Deploying Third Party Tools,” will demonstrate how focusing on things like brand protection, company image, customer acquisition and retention, and boosting profits can strengthen your case when lobbying for fraud prevention projects that help reduce fraud rates and improve the health of your IT environment. (more…)