WHY ONLINE FRAUD IS RAMPANT

[herbolaryo]

Why Online Fraud is Rampant

1. Online fraud exist because they know the loop hole of online shopping
a. The enforcement agency/ police is limited by territory. Fraudulent merchant from one country cannot be pursued by enforcement agency of another country. Just like diplomatic immunity… An ambassador/diplomat even if he commits a crime in another country is immune from being arrested.

b. The enforcement agency/ police has limited resources even if fraudulent merchant is in your own country. I read so many stories about enforcement agency/ police just have a division for online fraud and your case just being filed. (A division is perhaps composed of 1 or 2 people) No real enforcement power.

c. The enforcement agency/ police has limited enforcement power. If your claim is only limited to a certain amount and not involve thousands of dollar (or whatever denomination in your country). Your claim will just remain a file on their record. That is if they even bother to file it. Most likely they will point you to a different agency or "online filing centers"

d. The online shopper is scattered all over the world. The convenience of internet has its fallback. Shopper can’t really talk to the merchant and demand a refund.

e. The online shopper is embarrassed to report his incident. So victims keep piling up.

f. Rating system like the 5 stars or the opinion-based ratings seems too easy to manipulate. Ebay, Yahoo, Amazon, etc. If the fraudulent merchant receives a bad rating, all he has to do is open a free email account and put excellent and 5 stars on his ratings. In that way, he still has a high rating. This can go unnoticed by ebay, yahoo, amazon, etc since the number of complaints is outnumbered by infinite option of putting a good review by the merchant himself.

g. Website hosting seems too easy. Fraudulent merchant can just open a website and attract new victims. If caught, they can just open a new one and continue their profitable fraudulent business.

Possible Solution.
1. Since online shopper/victims are scattered all over the world. Why not make use of that as an advantage.
a. Phase I. Gathering of Complaints.
The forum is a good start to know the recent victims of the fraudulent merchants. However, since the fraudulent merchant keeps on creating new website. Searching for their ongoing activity seems a task. There will be numerous thread for each victim for every online store in that approach. May I suggest we expound the sticky on Online Scam Store” and create a dedicated folder for those under investigation and those with proven fraud listed alphabetically. So every fraud activity is assigned to the specific merchant. And every discussion is focused to the specific merchant.

b. Phase II. Early notification of “Complaint Filing Centers” and Creation of Fraud Advisory System
Since Internet Fraud Complaint Center, Federal Trade Commission, Better Business Bureau, Federal Bureau of Investigation, U.S. Postal Inspection Service , National White Collar Crime Center, Computer Crime and Intellectual Property Section (CCIPS) of the Criminal Division of the U.S. Department of Justice have limited resources and enforcement power, notifying them increases the vigilance on the respective fraudulent merchant.
http://www.resellerratings.com/forum...d.php?t=121989 (Consumer Resources: Where to file consumer complaints)

N.B. Why so many agencies for Online Fraud and yet....
Why NOT abolish all of them and create a unified Online Fraud Task Force with a greater enforcement power. Governor, Congressman, Senators can remedy this.. Just like what they did to Intelligence on Terrorist activity and Department of Homeland Security. It seems more practical to just have one.

It would raise awareness of the reputation of online merchant if they have a “Threat” level similar to the one used by homeland security
http://www.dhs.gov/xinfoshare/progra...ease_0046.shtm
Having a red, orange, yellow, blue, green “threat” advisory depending on the number of complaints on the online seller. This rating system is for negative feedback only... That way the merchant cannot create fictitious positive feedback to increase his ratings.


c. Phase III. Having a group of people using their computer/ internet expertise to pinpoint the exact location of the fraudulent merchant.

d. Phase IV Once the fraudulent merchant is located, volunteers (or the fraud victims themselves) located in the vicinity of the merchants business location, to report it to the local enforcement agency/ police.

e. Phase V. Once the Report is filed to the enforcement agency/ police, publish in the internet/ and/or in this forum the names of the detective, head of the department working on the case. The progress of the case followed up on a day to day basis.

f. Phase VI. Capture of Fraudulent Merchant.
Once the enforcement agency/ police gather enough evidence, capture can be viewed online like the ones you see on TV live. That way, this will make fraudulent merchant to think twice.

Perhaps we can raise funds to have a bounty hunter capture them. And still watch the capture live on TV or internet. Like the ones you see in reality TV "Dog the bounty hunter" and "America's Most Wanted List" ... Or even include a segment on this shows about "Online Fraud and their capture"
Imagine if every victim will contribute just once cent to raise this funds...Considering the number of frauds committed every second literally.

It would be great if resellerratings.com can facilitate in raising the funds.

g. Phase VII. Prevention of Fraud.
After learning the different modus operandi of fraudulent merchants, a letter to your government officials (governor, congressman, senator) to remedy the loop holes in the law and increasing the resources of enforcement agency. International law is another aspect. Perhaps the “immunity” of the fraudulent merchant can be removed.

Provide stricter rules on creating a web site for online shopping. Creating an international agency with a greater enforcement power(if still not existent) of blacklisting or suspending the fraudulent web site immediately as soon as the fraud is committed. Similar to a preventive suspension when a suspicion or complaint is filed to a government employee/ official.

Publish the letter in the internet/ and/or in this forum the names of the government official working on it. The progress followed up on a day to day basis. At times, a spotlight must be focused on politicians for them to act.

Kindly VOTE in our poll If you think online fraud will continue to rise...

[herbolaryo]

I hope our forum provides the guidance and Solution to the Escalating Online Fraud problem.

[michaels39]

[QUOTE=herbolaryo;1132714]
Why Online Fraud is Rampant

f. Phase VI. Capture of Fraudulent Merchant.[/COLOR][/B]
Once the enforcement agency/ police gather enough evidence, capture can be viewed online like the ones you see on TV live. That way, this will make fraudulent merchant to think twice.

Perhaps we can raise funds to have a bounty hunter capture them. And still watch the capture live on TV or internet. Like the ones you see in reality TV "Dog the bounty hunter" and "America's Most Wanted List" ... Or even include a segment on this shows about "Online Fraud and their capture"
Imagine if every victim will contribute just once cent to raise this funds...Considering the number of frauds committed every second literally.

It would be great if resellerratings.com can facilitate in raising the funds.


I'd love to turn Dog loose on Monarch Computer,that would be worth every dollar!
Seriously,the best defense against fraud is consumer education and vigilance,people need to check out online vendors at sites like this before buying.Monarch is a perfect example,anyone who checked this company out here would have known months ago that they were scam artists,but they were getting orders right up to the bitter end.(Their building has been seized by the GA tax commission).And they have to learn to use only credit cards for online purchases(not debit cards!).Credit card companies will initiate a chargeback of funds at the consumers request if they feel they've been defrauded.

[Admin RR]

Fraud is frustrating and indeed angering, but there is little the consumer can to do "go after the bad guy". The best approach is:

1) Only shop online with a credit card. Credit card companies protect consumers and will give you your money back if you don't receive merchandise. NOT so with cash, western union, check, etc - even Paypal isn't as fool-proof as simply paying by credit card.

2) Report fraud to the attorney general in your state or in the state where you believe the business to be located. If enough people complain, they will investigate. However, this is a long, drawn out bureaucratic process and you will only come to lead a bitter stressed out existance if you try to take an active role and try to control this process in hopes of getting revenge against the scammer.

ResellerRatings exists to help identify good and bad stores - ultimately the point is to help you avoid delays and frustration of dealing with a store that has poor service. However, it's up to you to protect your money by paying by a credit card. No amount of advice or store ratings will get your money back when you pay by cash or bank transfer, and that is how 99% of these scammers are operating. If you transfer cash to a fraudulent merchant, no government, no legal system or lawsuit, is ever going to recover your money.

[herbolaryo]

The Live ON TV Capture of Fraudulent merchant is just to spice things up. Just being creative in this truly Frustrating & angering process.
Of course, the reality of bureaucracy, privacy laws between countries sets in... But that is another issue...

If committing online fraud is profitable...
why NOT make catching them profitable too... Those who participate in the capture (from filing a complaint, searching their location, to capture) will receive a portion of the funds raised. Then having an active role is NOT that hard to take...
I am sure any company who starts this fund raising will make a killing. Perhaps the next Ebay phenomenon... You can hear how small time unheard company starts from a great idea... hearing opposition.. and despite that continue on...
From the view of the company who will eventually start this... imagine the service you will make and be compensated for it in the process... Your customers (the victims) are worldwide and like ebay... profit is also boundless..
Another way is to create an "insurance". Like when you mail your package you pay for an insurance in case it is lost. This time... It is an Insurance for scam. No merchant will dare to commit fraud if he knows there is a set amount for his capture. I hope such a company will emerge.
It just need the right people with expertise on this field to set it up.

There are times that vigilance and a passive stance of checking out honest versus fraudulent merchants is helpful.
But since they can always create new shopping websites where there is NO negative feedback yet, new victims always arise.

Let us say an unwilling buyer gets a merchandise from a fraudulent merchant. It takes 3 days to 2 weeks for shipping. After that, you have to contact the merchant and this will take you several days if you have the time.

After several weeks or months (after a list of victims and hefty profit), the website closes. Ready to open a new online shopping site. And the cycle goes on...ready for a set of fresh victims.


This is NOT the only tactic they use, they may have already figured out the loop holes in credit card, paypal, complaint center routine.
And they are just committing fraud as a hobby on their spare time.
It won't be a surprise that the perpetrator is just a kid just like most hackers are...
Because of technology, it seems they are always one step ahead of the victim and the law.

There is also a time for action.... So the root cause is removed. (...the less travelled road)

Although I would admit, it is easier to take the passive stance...
I took the passive stance... I read the guidelines published by BBB, IFC, FTC on online shopping.
I research merchant's ratings. Did NOT use wire transfer, cash or money order.
I found out later on... Eventhough initially their ratings may be good, they can always fabricate positive ratings.
Eventhough they have negative feedback, I found out that there are software programs to divert you away from this websites. This is what some telemarketers do to lure you in their "positive" site when you do a google, froogle or yahoo search. It is amazing what programs/ hacks are available in the internet.
They can always make their online shopping site professional looking with all the "hacker-free", "customer service department", "accepts visa, mastercard, paypal", seal of safe shopping... and the works...
and still fall victim even if you are the most careful shopper.

From the words of one fraudulent merchant....
"This is the life, ones get scammed and ones scam. "do lunch or be lunch", harvard teacher wrote this. I'm writing this to announce you that we are retreating, you won't see us any more, you may be see other scam sites, but ugly, non professional websites, you must admit that my website look good. Don't hate scammers, they are already ugly and stupid (trust me), only a few (like me) are good looking and smart. You may write me and maybe a will answer you, sorry again, be smarter next time (New Scammers: EusaTech Electronics, more..)."

Then if action is NOT taken then let us just play this hit and run game...
Let the scammers laugh their way out.

And just hope we will not be the prey the next time around.
As they say... this approach is NOT always fool proof

[michaels39]

There's always one good rule to observe -"If it sounds too good to be true,it probably isn't".Buying from someone with extremely low prices and only a handful of reviews and a short rating history is risky at best.I'm especially wary of merchants on Ebay and Yahoo,they have to have a long history and a large amount of positive reviews before I even look at them.And I never go by reviews on a dealers website,I come directly to sites like RR to research them.I can honestly say I've never been burnt following these guidelines.As for government involvement,I doubt they'll be much help,there's a kind of love/hate relationship there with online commerce,it may help the economy,but not being able to collect taxes on a large amount of online sales probably doesn't encourage them to give consumer protection a high priority.