Aussies Collaborates With Nigerian and Ghanaian Authorities to Fight Online Fraud.

An initiative to combat online scams is being trialled by the Queensland Police Service via its website. The portal will give fraud and scam victims the chance to report their case to Ghana police or the Nigerian Economic and Financial Crimes Commission.

It will also provide information on fraud and scams, as well as how to protect yourself.

It will be co-launched with the Nigerian High Commission next month, says Queensland police Detective Superintendent Brian Hay. Internet fraud and scams come in many guises, preying mainly on lonely hearts and businesses that can be easily fooled into sending cash to places such as Nigeria.

According to Hay, these types of money-hungry scams derive mostly from parts of western Africa, predominantly Nigeria and Ghana.

"It will make the process far more efficient and give people instant connectivity, which is something they would have struggled with in the past," he says.

"We would like to expand that to the rest of the countries in Africa and other places globally, so that people can go onto one spot in Australia. It's a long-term process, which we're looking to make far simpler and efficient."

Hay was awarded recently for his efforts in educating the public on cyber crime and online fraud. He played an instrumental part in investigating the Nigerian advance-fee fraud scam, which had cost vulnerable Australians $36 million a year.

Hay also leads the Queensland Fraud and Corporate Crime Group, which embarked on initiatives aimed at preventing and reporting cyber crime. As part of a collaborative effort with Western Union, it developed a fraud prevention early-warning system that indicates when money is sent to high-risk countries.

"We're doing a whole lot of new research at the moment," Hay says.

"In the early stages, we're having some wins. Some of those investment and inheritance scams are reducing but the big problem that we've got now is we've seen a 100 per cent increase in romance and relationship scams. It's just gone through the roof."

Hay says investigating new scams requires a new approach.

"We're trying to look at what drives people, what traps them and what age groups are more susceptible," he says. "It's very sad when you see these victims of romance scams. It's just amazing how much more money is still going to countries like Nigeria and it's being driven at the moment by relationship fraud."

The police service plans to host an identity crime symposium on the Gold Coast in October.

Sphere: Related Content

Using Identity Theft To Rob A Bank

When Bank One notified Houston veterinarian Mike Janney that he owed $85,000 on his line of credit, he was stunned.

"I'm thinking, 'How can this be?' I've never even used this account."

Janney fell victim to fraud when a bank employee sold his personal information to an identity theft ring. His bank had to cover the loss, along with another $12 million stolen from other customer accounts during a two-year identity theft blitz that ended in 2002.

Janney said he considers such thieves to be no better than common bandits from the era of Bonnie and Clyde. "Instead of blowing through the front doors of a bank, guns ablazing, they took my identity," he said. "That was their mask."

Sophisticated and ingenious techniques have allowed these modern-day crooks to use thousands of stolen identities to drain billions from banks and other financial institutions. Meanwhile, the average stickup guy gets about $7,200 in a bank heist, according to the FBI, and is more likely to get caught.

"Not only dollar for dollar, they get more money this way, but it's [also] safer," said Assistant U.S. Attorney Jay Hileman of Houston, who prosecuted many of the 30 conspirators in the Bank One fraud case.

Identity theft has become the most common way to steal from a bank.

A 2003 Federal Trade Commission report estimated identity theft losses to financial institutions at $47 billion, roughly the combined gross domestic products of Afghanistan, Madagascar and Jamaica.

In comparison, there are about 7,600 bank robberies a year, amounting to roughly $77 million in losses to the institutions, according to the FBI.

Putting the identity theft ringleaders behind bars barely makes a dent in what prosecutors describe as the nation's biggest white-collar crime.

"I think that we're going to always be one step behind, chasing the crooks," Assistant U.S. Attorney Jim Buchanan of Houston said. "They're always thinking up a new tactic."

The banks fight back with ever-improving methods to detect and deter the frauds, but the identity thieves are constantly fine-tuning their methods as well. "The criminals are like water: They see an obstacle; they try to go around it," said Nessa Feddis of the American Bankers Association.

Here are some examples of how identity thieves have developed ways of robbing bank funds:
# A bank employee sells your personal information to criminals, who then use the information to take over your account.
# Crooks use your Social Security number and date of birth to open accounts in your name to launder checks. If the police catch up, it's your name on the account -- not the crooks'.
# An e-mail scam known as "phishing" attempts to trick people into giving out their personal information and credit card numbers.
Victimless crime?

Those who steal the identities and organize the frauds often view it as a victimless crime. Even a 17-year prison sentence hasn't tempered the attitude of convicted identity thief Jason Carpenter.

"I still feel it's worse to steal from an individual than it is to steal from a bank," he said. (Read more from Carpenter)

Matthew Boyden, a U.S. postal inspector who investigates mail fraud, said that viewpoint is typical of many identity thieves. "I've had several tell me it's so easy to do, and [that] it's somewhat our system's fault," Boyden said.

Meanwhile, consumers end up paying a price, in frustration and time. A survey published in January by the consulting firm Javelin Strategy & Research found that the average identity theft victim spends 40 hours to straighten out the mess.

"We've talked to a number of victims and they've had frustration; they've been scared to death when they discover this," said Hileman, the assistant U.S. attorney. "They're angry. Some of them feel violated."

Passing the buck to customers

Just as shoplifting is built into the cost of retail merchandise, banks recoup their losses through higher customer services fees and interest rates.

Janney said he realizes that "it doesn't cost me a nickel here, but it does end up costing me down the line, because the bank is not going to sit there and take losses."

Police, prosecutors and financial institutions are nowhere near claiming victory in what has become a high-stakes battle of wits, and identity thieves are constantly remodeling their schemes to stay ahead of investigators.

"It's evolution at its finest," Boyden said.

Sphere: Related Content

Jason Michael Carpenter Said Identity Theft was easy fun

Jason Michael Carpenter, a convicted identity thief who is serving 17-and-a-half years in prison for conspiracy to commit wire fraud, and fraud in connection with access devices, says stealing identities was fun and "incredibly easy."

He spoke about identity theft tactics with "CNN Presents" from the Federal Detention Center in Houston as part of an hour-long documentary, "How to Rob a Bank." That airs at 8 p.m. and 11 p.m. ET Saturday.

CARPENTER: It was fun, not in the sense that it was fun to steal the money, but it was fun to get away with something like that. Being so young as I was and to think that I could be doing something like that. ... I didn't look at it like a big deal. I just looked at it as something to get away with. ...

CNN: ... Where did you figure out how it all works -- in chat rooms?

CARPENTER: Pretty much in chat rooms and just reading it. Since I've ... always been around computers, (the) computer comes naturally to me. ... You'd be surprised the amount of credit card information that is actually circulated around the Internet. And once you get a hold of it, you just figure out how can you use it, if you want to. ...

CNN: Describe to us what "phishing" is.

CARPENTER: Phishing is ... one big source of credit card information. Phishing would be when you are sending out e-mails or messages to people, telling them that for some reason or another, and portraying yourself as a financial institution or an official working for a company or an Internet service, (and telling them that) they need to resubmit their credit card information to you. And instead of having it done on the official Web site, it would be done on another Web site that you set up and information would be sent to you.

CNN: So you just ask for it?

CARPENTER: Exactly.

CNN: And people send it?

CARPENTER: Seven out of 10 times people will send it.

CNN: You're kidding?

CARPENTER: No. It's extremely easy. ... If I was really driven, it would take me two or three hours, and I would have your information -- Social Security number, date of birth, driver's license number, bank account numbers.

CNN: Is that because you're a genius or because it's just so easy?

CARPENTER: It's because it's so easy. It's ... incredibly easy. ...

CNN: Did you think people would be victimized by this or just the banks.

CARPENTER: What I thought at the time was that most of the credit card companies earmark so much money every year for fraud and ... I thought the person would, at most, have to pay $50 or $100. And then the charges would be ... removed from the credit cards, and the credit card company would absorb the loss. But they made so much money that anyway, I didn't mind. I didn't see it as such a big deal.

CNN: So ripping off the credit card companies or the bank, in no way equates to ripping off a person?

CARPENTER: I don't see those things as being equal. Ripping off a financial institution or a bank or a large business, it's not the same as if you're taking the money directly from somebody's pocket or their bank account. ...

CNN: Did it surprise you that each step of the way you were getting away with more and more and more?

CARPENTER: It was very surprising how easy it was. That was the reason that I kept doing it -- just because it was so easy to get away with something like that. That's what really kept me doing it.

CNN: Was it like an addiction?

CARPENTER: Almost, almost because I would just do more and more and more just to see if I could get away with it. ...

CNN: Are the robbers winning this one in the cops-and-robbers game?

CARPENTER: They are because there's a lot of things ... that go on that they're never going to find out about. And when they do find out about them, it'll be a long time. And the amount of people that are doing these crimes ... it's not something that they have enough manpower and enough knowledge ... to catch them all.

Sphere: Related Content

Australian Government To Launch Alert On Online Scam

A national alert service designed to protect home users and small businesses from cyber threats will be launched by the Federal Government.

The industry is being invited by the Department of Communications, Information Technology and the Arts to put forward proposals for setting up the service, aimed at protecting home internet users from online threats such as phishing, ID theft, banking frauds and other scams.

The project is part of a $13.6 million package over the next four years to strengthen home user and small business security.

Reaction to the proposed service has been mixed.

Simon Clausen, chief executive of Australian PC security software maker PC Tools, says those most likely to sign up for the service are the ones least likely to need it. "They're the people who already think twice before opening attachments and visiting dodgy web sites."

Nishad Herath, senior researcher with security software maker McAfee, says the service could work if it were well promoted. He says a wealth of information about security is already available to home users and small business. The trick is to convince end users they need to educate themselves.

"If you are interested, there are so many existing sources of information. There's nothing to stop you from finding this information for yourself now," he says. "I'm not sure there's a problem with the industry's lack of focus to the consumer. I think it's more to do with the fact that the average consumer has very little motivation to actively look for solutions."

Karl Hanmore, operations manager of not-for-profit IT security information centre AusCERT, is more upbeat: "Providing a good central place for information is a positive step. It's definitely a step in the right direction. High level, it looks good."

Sphere: Related Content

Dont Get Caught-Up In The Soaring ID Theft

ID fraudsters are becoming more sophisticated and are starting to use other avenues to steal from consumers. There has been an increasing amount of mobile phone fraud, current account hijacking, and car leasing and cloned car number plate fraud throughout Britain.

Credit card and loan frauds are now the most popular forms of ID theft, where fraudsters gain information from one person to carry out as many fraudulent activities as they can before the fraud is discovered.

The fraudsters create credit card accounts and run up huge bills which will never be paid. They take out personal loans which get defaulted on, leaving the victim with a bad credit rating.

The average amount an individual is defrauded is currently £6,000. Many consumers are not aware that identity fraud has taken place in a number of different ways and are still not protecting themselves and practicing good methods of identity protection.

Most consumers do not know what to look out for to discover whether they have fallen victim of an identity theft crime.

Identity theft can happen in a number of different ways and only just a few personal details are needed to commit a crime.

Often these personal details can be obtained through phone calls, phising, mail interception and other methods. The personal information gained through the methods can then be used for fraudulent purposes such as account takeovers as well as taking out mobile phone contracts.

Over the last year there has been over a 300% increase in the number of serious fraud cases. Fraudulent cases that included the take over of a current account were up by 24% in the first three months of this year with mobile phone contract crime up by 22%.

Sphere: Related Content