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Internet Banking Scheme Exposed - Abstract - Brief Article

Internal Auditor, June, 2001 by D. Salierno

THE INTERNATIONAL Chamber of Commerce (ICC) recently uncovered an online fraud scheme involving 53.9 billion worth of fake bank guarantees. The fraud included at least 29 different Web sites, which were shut down by the ICC's Commercial Crime Services after a six-month investigation.

To lure potential clients into their finance schemes, the Net fraudsters designed some of their Web sites to look like they were run by an international clearinghouse for financial securities. Other sites gave the impression that they were operated by Bloomberg L.P., the financial news and information company.

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"We were informed that advance fees of hundreds of thousands of dollars were paid for the issue of these fraudulent guarantees, and that Web sites were used to validate the documents," said Jon Merrett, assistant director of the ICC's Commercial Crime Bureau and Cybercrime Unit. "The amounts represented on the fraudulent site ranged from $50 million to over $400 million."

Although the scam operated in the United States and the Far East, false guarantees had been presented to banks in several countries, according to Merrett. The sites were hosted by a U.S. service provider.

"The problem with the Net is that it is not secure because Internet service providers don't run identity checks on their clients," Merrett said. "It is very easy to set up an e-mail account and Web page on an ISP offering free Web space, and no checks are done on the people setting them up.

Responding to the rapid growth of cross-border Internet fraud, several countries have joined forces to launch Econsumer.gov, a Web site that gathers e-commerce information and complaints. The site allows consumers to report fraudulent activity and also provides general information about consumer protection.

Countries participating in the anti-fraud alliance include Australia, Canada, the United States, Mexico, New Zealand, and the United Kingdom. Agencies from each of the countries will share information submitted to the site among each other and with consumer protection law enforcers.

Business Services Industry

Internet Banking Scheme Exposed - Abstract - Brief Article

Internal Auditor, June, 2001 by D. Salierno

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