The Hindu Business Line : Surf with care

eBay is an auction site that is internationally renowned and inspires a lot of confidence in the seller as well as the buyer. It looks as if the more famous and popular eBay becomes, the more vulnerable it is to fraudsters.

Would you believe that its unique brand name was hijacked late last year by a 20-strong Romanian gang that duped a large number of bidders into believing that they were buying merchandise from eBay, when they were actually transacting business with a pack of scoundrels? In the process, the latter made a cool $5 million from the unwary public before the long arm of the law caught up with them.

How they went about it

The modus operandus of this particular gang was to tell unsuccessful bidders on a variety of schemes that they were getting a second chance from the seller.

Falling prey to this unusual solicitous offer, many bidders wired money to the fictitious seller or his agent. Thereafter the money vanished into the hands of unidentified co-schemers, many of whom were outside the US, especially in Romania.

There were other victims who were threatened that their eBay accounts could be terminated if they did not reply with their password and other account information. Those who responded thoughtlessly to this outrageous demand for sensitive information found their accounts seized by fraudsters who used them to take genuine account-holders for a ride.

A third modus operandus was to persuade a seller to put his money on a fake escrow account after a member of the Romanian gang bid for an item and would not pay through the accepted PayPal mode. (Owned by eBay for the past five years and operating from San Jose in California, PayPal enables quick receipt or payment of money for individuals and businesses with an e-mail address. Available in 190 countries, it claims to have 100 million account holders.) Once the seller shipped his item, the escrow account vanished into thin air.

A majority of the gang have been arrested in the Chicago area and are facing trial. If convicted, each could serve a 20-year sentence, in addition to paying a fine of $250,000.

The moral of the story is that, unless you are extremely wary, you could end up losing a lot of money when you take part in an online auction.

The safeguards built by well-organised auctioneers such as Bay do not seem to deter or outwit hardboiled thieves like this Romanian gang.

Valuable insight

The Internet Crime Report 2006 released recently by the FBI and National White Collar Crime Centre in the US is an interesting document that gives more than insight into the mind of gangsters like the above who operate in unison and misuse the Web for personal profit.

This is the sixth time such an annual compilation has been shared with the public in the hope that Netizens will take adequate care while surfing.

Based on figures assembled by the Internet Crime Complaint Centre (IC3) (previously known as the Internet Fraud Complaint Centre), the study enlightens us on several trends seen over the Net.

If one takes into account both fraudulent and non-fraudulent complaints, there was no doubt a 10 per cent drop last year. But viewed in isolation, there is a definite impression that the former category is a matter for extreme concern. This is in the context of the belief that only one out of seven frauds gets reported. Online frauds are also getting more and more sophisticated, and educating Net users seems no proof against the wiles of those who use the Net only for dishonest purposes.

The IC3 does not investigate but merely receives complaints online for being evaluated.

Those considered significant enough for an investigation are subsequently forwarded to appropriate law enforcement agencies. These complaints cover a broad spectrum that includes online fraud, intellectual property right matters, hacking, economic espionage, child pornography and money-laundering.

Interestingly, the IC3 is the recipient of a large number of non-Internet crimes as well. These are often bodily offences, for which the complainants are naturally advised to contact local police authorities.

Auction frauds (45 per cent of complaints) represented the highest number in terms of complaints received during 2006.

Non-delivery of merchandise or non-payment came next, with nearly 20 per cent. Credit/debit card frauds and computer frauds were also significant in number. The total loss suffered by the victims was a whopping $198.44 million. An essentially male-dominated crime, it seemed endemic in some of the larger States such as California, New York, Florida and Pennsylvania. Also, offenders came from various parts of the globe, especially the UK, Nigeria, Canada, Romania and Italy.

IC3 is a good experiment that encourages free reporting of Internet crime. The ease with which one can lodge a complaint accounts for its growing popularity.

What attracts interest beyond the borders of the US is the IC3's open-mindedness in taking private industry along with it. This is with a view to drawing on the latter's capacity to collect intelligence and a willingness to make available experts from different disciplines relevant to cyber crime.

What is worth noting here is that the IC3 and its partners have built a public Web site that educates potential victims. Known interestingly as www.lookstoogoodtobe true.com this site carries consumer alerts, tips and fraud trends.

eBay is one prominent collaborator with IC3 using the latter's Web site for providing an array of information to the public that could come in handy while negotiating a fellow-surfer who does not inspire confidence.

Ultimately, in spite of all your education and a supreme faith in technology's ability to protect you, it's your hunch that should guide you!

Do I sound a little too cynical? Sorry, if I do, after reading all that the Internet Crime Report tells you!

(The writer is a former CBI Director who is currently Adviser (Security) to TCS Ltd.)

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