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. 

In the recent blog, “Online Trust Remains Risky Business,” I discussed how most of us have at one time or another told some kind of little white lie on the Internet. Would this be cause for criminal prosecution? Probably not. However, if the intent is to steal or commit some type of crime against another person or business, the lie could be a violation of corporate policy covered by the Computer Fraud and Abuse Act (CFAA), which criminalizes “exceeding authorized access” of a computer.

While DoJ spokeswoman, Alisa Finelli, says it’s not the DoJ’s position that lying violates the CFAA, its current position is one that could be open for change.

“We understand the concern that is motivating these criticisms of the statute, and we are willing to work with Congress on legislative proposals in this area.”

While Congress works on legislation that clarifies what would be grounds for prosecution when it comes to lying on the Internet, to protect their members and online environments dating sites need to take action by deploying anti-fraud detection tools that help them identify risky behavior. At the moment, there may not be an actual online “lie detector” that can distinguish when a member is telling the truth or not, but there are tools available, such as iovation’s device identification service, that helps detect online scammers, spammers and bad actors attempting to mine the identity details of legitimate members.

According to the article, “Online dating scams harm ‘thousands’ in Lee County,” Stacey Payne of the Lee County Sheriff’s Office community relations department says oftentimes those seeking love online either don’t want to believe it, are embarrassed, or simply don’t mind that the person they are in love with is a scammer.

“Oftentimes the victims don’t care they are being scammed – they want that companionship. Or they don’t believe they’re being scammed. They’re in love. If a person is of sound mind they can give their money to whomever they want to give their money.”

Payne estimates that 30% of online relationships, at least in Lee County, are based on lies. Contributing factors such as an aging population and affluent places such as Gasparilla Island can make such areas prime targets for online scammers, Payne says.

Because online perpetrators focus on the emotional heartstrings of their victims, Internet dating websites need to continually educate their members on how to spot potential sweetheart scams before victims get emotionally involved. While keeping members up to speed on fraud schemes and providing tips on how they can avoid being scammed, anti-fraud security tools also play a pivotal role in identifying and stopping online fraud before it happens.

Leading fraud prevention services such as iovation ReputationManager 360 uses device reputation to not only identify and re-recognize when Internet-connected devices with a history of fraud or abuse log onto a dating website, but also reveal hidden associations between fraudulent devices and other online accounts that are already active within a community.

Just since January 1, 2011, iovation has already flagged 15 million fraudulent activities for its dating and social networking clients, further protecting the client’s brand reputation and ensuring its members have a safe experience.  Many of those activities had to do with online scams and solicitations and take place all over the world.

Exposing the connections between fraudsters working together is critical for helping online dating sites reduce fraud rates and remove bad accounts that impacts its customers’ trust and confidence.

I like to expose the flaws in our systems, to find what makes us vulnerable. Much of my “research” (or my “antics,” as some would say) is prompted by my desire to learn more about the scumbags of society, who prey on others. So I sign up for online dating sites, create a profile as a woman, and wait for men to contact me. My research has led me to discover some particularly shady methods scammers use to target emotionally vulnerable victims. The most common is an advanced fee scam involving a wire transfer.

A divorced mother of three in Britain was taken for £80,000 by a scammer posing as a US soldier. It began when a man who called himself Sergeant Ray Smith introduced himself on a dating website. Soon they were chatting and emailing regularly, and then he was calling her on the phone and asking her to wire him money.

Twenty years ago, online dating wasn’t even a thought. Ten years ago, it was weird. Five years ago, it was new and exciting. Today, it’s as normal as milk and bread. If you are looking for a mate online, you will eventually find someone. Most of my friends who’ve tried it were successful. But by the time a new technology becomes normalized, scammers, who are usually ahead of the curve, are lying in wait. As online dating gradually gained popularity and acceptance, scammers were coming up with ways to take advantage and perfecting their craft. And now it’s a full-time job for them. They know all the new scams and come up with better ways of executing the old ones.

It blows me away that these scams are even possible. In many cases, the same scammers maintain multiple profiles on different dating sites, and the dating sites do almost nothing to prevent or police this.

We caught up with anti-fraud provider iovation to see what dating sites around the world were reporting about fraudster activities.

In the last 90 days, 230,000 fraud and abuse attempts were reported to iovation from dating sites alone, including:

• Spamming – 90,000
• Scams and solicitations – 30,000
• Inappropriate content – 20,000
• Chat abuse – 17,000
• Profile misrepresentation – 15,000
• Credit card fraud – 14,000
• Identity mining / phishing attempts – 12,000

iovation has many more categories specific to dating, including bullying, account takeovers, under age members, and so on. What’s unique to their globally shared system is that their clients can choose what to take action on or not. For example, a dating site may choose to not care about cheating in online gaming sites, but set up rules to trigger multiple account creations looking for profile misrepresentation. Dating sites can specify which type of behavior to protect their users from.

If more sites incorporated device reputation checks for suspicious computer history and investigated for characteristics consistent with fraudulent use, they’d be able to deny criminals, often before the first time they tried to sign up.

According to the article, “Website offers forum on avoiding romance scams,” fraudsters continue to successfully scam unsuspecting lonely hearts by using stolen credit cards to join online dating sites and set up fake profiles. From there, they quickly lure their victims off the dating sites and onto more personal lines of communications such as instant messaging and email before romance sites can discover the stolen credit card and pull their fake profiles.

Barbara Sluppick, the founder of Romancescams.org, said the problem continues to escalate despite having more information.

“I am sorry to say scams are growing all the time. Phonebusters, the Canadian organization that deals with online scams, recently said that more money is earned in online scams than in the drug trade. Australia recently put together a commission to deal with these scams, as they have discovered their losses are topping $1 million a month.”

While Sluppick and other anti-fraud advocates are doing everything they can to educate the public about scammers and their evolving methods, including posting photos of scammers, as long as fraudsters are able to successfully bypass fraud management tools and techniques to create false identities, the industry will continue to see similar increases in online dating scams.

With scammers continuously providing new information to create multiple profiles, we cannot expect to effectively catch them with tools that solely rely on identifying the person or the false data they provide. As they evolve, so should the methods to detect them. New techniques that don’t rely on personal information to identify and stop fraud are needed to provide a defense-in-depth approach that complements and enhances online dating sites’ existing anti-fraud security strategies.

On July 20th, iovation CEO and co-founder, Greg Pierson, presented to 800 webinar registrants, a comprehensive way to detect criminal activity online, without collecting personally identifiable information (PII) or interrupting the user experience. Over 300 major brands (including more than 30 major dating site providers) use iovation’s fraud protection service to protect their members from romance scams, spam, financial fraud and many other forms of online fraud and abuse. To watch the webinar, please visit www.iovation.com/risk-mitigation.

As we’ve discussed in previous posts, we have a lot of experience working with companies in the online dating and social networking space and are thrilled to have our fraud protection service recognized within the industry. While it may be an overlooked fact for many, online fraud prevention is a big aspect of running any online community.

Our device reputation service provides an approach to fraud protection which is not only transparent, causing no unnecessary hassles for legitimate users, but one that actually helps identify and shut down repeated offenders exhibiting unwanted behavior, such as financial fraud, identity theft, romance scams, predatory behavior and more. Our goal is to make online dating sites as safe as possible, and as our nomination for “Best New Technology” suggests, there are a number of people in the dating industry who think we’re doing a pretty good job!

Now that the nominations have been announced, voting for the iDate awards takes place through January 7th, 2010. We encourage you to visit the awards website to see a full list of awards and the final nominees in each category. Voting is open to anyone, and you are welcome to participate.

iovation is attending the Internet Dating & Social Networking Conference in London this week and evidence of this industry’s continued growth is easy to find. Just this weekend, the Detroit News reported on the success of the online dating industry, despite, or perhaps because of the tough economic times. In fact, based on statistics from Forrester Research Inc., the article states:

Online dating is the third largest producer of revenue out of all paid content sites, generating $957 million in 2008, a figure that the firm predicts will grow 10% by 2013.

Unfortunately, the increased popularity of online dating is also good news for scammers who are always happy to take advantage of new, unsuspecting users. This month PRWeb reported that, according to trends revealed by Google, search terms like “online dating” and “free dating” are getting the most hits from fraudsters in African countries, looking for sites where they can con those looking for love online.

Once these online scammers set up accounts at a legitimate site, they begin targeting other users, with consequences that can be anywhere from mildly annoying to completely devastating. For a look at the variety of different scams in play, and the techniques used to lure people into a scam, check out the site Romance Scams. This site not only details the warning signs but also provides links to some of the actual profile photos used by the scammers.

Romance scams aren’t new, of course—taking advantage of an individual’s emotions is a technique that has been used by con artists for centuries. What is new, however, is the level of anonymity and safety that the Internet gives to scammers. The relative ease with which anybody can set up an account using a stolen identity, a fake photo and made-up personal information makes these scams highly attractive to online criminals. Instead of having to focus on a single face-to-face con, the scammer can be running multiple cons at once without a problem.

With this in mind, it is very important for individuals to protect themselves and for online dating companies to take every step to ensure that their sites are safe for their users. One of the important ways we help companies in the dating industry is by raising the bar for re-identifying scammers, by focusing on the computer they use, rather than the personal information (often fake) that they provide. With device reputation, it is much easier to identify scammers trying to return to a site and repeat their scam or con. Because of the impact our fraud prevention service has had, we were mentioned in a ComputerWorld article discussing how iovation helped eHarmony fight online scams and we were also featured in a separate article in the same publication on how we are helping the online dating industry in general.

If you happen to be at iDate London this week, let us know. We would love to meet with you.