Recession Adds to the Online Fraud Woes

Online frauds such as phishing attacks increased in 2008 and are likely to increase more in 2009, as there is a greater chance of vulnerability of innocents fall pray in a downturn. According to Federal authorities, online fraud increased by 33 percent in 2008, rising for the first time in the last 3 years. In a similar report by Gartner shows that, 5 million online customers lost money to phishing attacks during the year ending September 2008. Experts feel that people with economic woes are an easy pray to online fraud, as they tend to accept mails such as job vacancies, lotteries, inheritances and overseas money transfers.

Online Fraud Grew Rapidly in 2007 and 2008
Online fraud losses reached a record of $264.6 million in 2008 and the first three months of 2009 are showing more brisk rates. Online fraud in 2007 accounted for 239.1 million, where it was just $18 million in 2001. This jump in the online fraud rate is seen as a result of the economic problems of people who fall into the traps of the scammers who persuade in return of money or some other benefit.

Phishing Attacks Increased By 39.8% In 2008
5 million US consumers lost money online due to the phishing attacks in 2008, with an increase of nearly 40% from the previous year. Phishing attacks involve a spam email that fakes an original institution such as a bank that asks for personal details. In 2008 alone about 80% of the online adult population received spam mails linked to a phishing attack, increased by 14% from 2004.

PayPal Is the Most Targeted Brand
The customers of PayPal, eBay and BofA are the biggest targets of online fraud, according to Gartner. PayPal which is a subsidiary of eBay continued as the most targeted brand by phishing attacks. Spam mails related to lotteries and other promotional offers are the second most popular in phishing attacks. eBay followed by all banks combined stood at third and fourth places. Among banks BofA is the most vulnerable, as it is the most popular with largest bank accounts in US.

Even though online fraud is not new to the E-commerce world, the rate at which it is growing is only adding the woes of downturn to the companies as well as innocent people. The claims of fraud are adding up to the losses to the companies while many looser don’t report a fraud. People should be more careful while they are online as scammers adopt more sophisticated and innovative methods to trap in a downturn.

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