Online payment fraud can occur
when payment transactions are artificially created. Genuine transactions may be
inflated or manipulated at the discretion of fraudsters to target innocent people with fraud, while benefits go to the
criminals.
Due to the loopholes in internet
technology, it is possible for fraudsters to alter financial records and
payments for unfair commercial gains. Online payment fraud can occur in the
following ways:
- Opening Bogus accounts and receiving payments
This type of online payment fraud
is an extension of identity fraud. Fraudsters who have stolen the identity of
bank account holders gain unauthorized access and receive payments in many
ways:
- By effecting electronic funds transfer
- By forging signatures and getting self-payments from banks
In addition to this, they may
open fresh accounts in other banks and avail of facilities like loans. The online payment fraud also involves a situation where the fraudsters impersonating the victim send payment notices to debtors and collect the
receivables.
- Advance Fee Scams
This is a widely committed online
payment fraud, where loan seekers are made to pay an amount as advance fee or
processing fee. The offers from the fake loan companies are enticingly worded.
The companies offer huge amount as loans with minimum documentation and
unimaginably low rates of interest. People fall into the trap of online payment
fraud and make these payments with the hope of receiving loans.
- Excess payment scams
This online payment fraud is
committed by paying a seller a cheque drawn for an amount exceeding the
contract value. The seller is asked to bank the money and return the excess. In
reality the cheque is a fake instrument and the seller is liable to indemnify
the bank for any amount that may be used, on the hope that the cheque will be
realized.
- Sweepstakes winning scams and lottery scams
The online payment fraud
originates in the form of a fake email announcing winning a lucky draw contest,
sweepstakes or a huge online lottery scheme. Millions of dollars are quoted as
having been won. The fraudsters demand a small percentage of winnings as
processing fees in order to enable them bank the winnings into the person’s
account. Many gullible internet users, unaware of the online payment fraud,
succumb to these scams.
- Inheritance scams
This is quite similar to that of
the lottery scams, but the misleading email originates in the form of
unsolicited mails from wealthy foreign nationals who need intermediaries to
accept and transfer huge inheritances that are due to them. Processing fees is
requested and people end up losing the same.
- Retaliation
Being proactive always pays.
Cyber-crime prevention cells advocate awareness and alertness among people. By
ignoring spam emails, securing confidential information and not responding to phishing
emails, online payment fraud can be brought down to a significant extent. A
measure of critical analysis and logical reasoning must be applied when taking
up online job offers or doing online shopping. Any huge benefit that is
supposed to accrue must be founded on logical grounds. Where there no practical
explanation for undue financial gains, something is certainly fishy and its
time to get skeptical and probe the bottom line.
