Saturday, September 30, 2006

buySAFE on the State of e-Confidence

Jeff Grass and Steve Swoda (buySafe) have written some excellent posts regarding the current issues facing eBay and the e-commerce world in general.

With my (sometimes) narrow focus on fraud, I found all three of these articles a great read.

What is a "Market for Lemons"?

What's Wrong With eBay? It's Simple Economics

Everyone's a critic? Not so fast

The bottom line is that in any business, the customer is king. If the customer loses confidence - the business loses, also!

Of course - going back to my narrow focus - getting ripped off can put quite a dent in a customer's confidence.

If you would like to learn more about Jeff and Steve's business - link here.

Prying1 - Digging Up the Dirt on Zango and Who Advertises for Them

Paul Young - author of "Digging a Little Deeper" did a great post about Zango and slammed (rightfully) the Guardian Unlimited U.K. for what some of us would consider deceptive advertising.

In Paul's own words:

But as I was surfing for more information I came across a Guardian Unlimited (UK) webpage that had a short Macromedia Flash shot. "YOU WON'T BELIEVE YOUR EYES" it says. Then it shows a kid running in front of a bus and laying down in front of it. Looks lke his plan is to be lying between the bus wheels as it passes over him. "SEE WHAT HAPPENS NEXT! NOT FOR THE SQUEAMISH." in the middle of the advert is a forward arrow (>) for you to see what happens next.

Not being squeamish I clicked on it and a new window opened for whose slogan is, "With Zango – You’re Good to Go(TM)" - They also give this blurb - Zango offers a vast network of free ad-supported games, videos and downloads powered by proprietary and revolutionary time-shifted advertising technology. Zango allows users, publishers, content providers and advertisers to connect within one unique online community. - Also on the page was a lot of screenshots of various videos you can watch.

Link to prying1, here.

In case anyone is unaware of Zango, using them normally causes a lot of "unwanted" spy/adware to be loaded on your system.

That way - Zango's sponsors can track your every move - and the spy/adware will probably slow your system down to a snail's pace.

And if you want to clean up the mess it will make - it's going to cost some money.

HP Investigators Used the Same Tools as Phishermen and Fraudsters

Technology has taken away a lot of personal privacy. We often "cringe" when fraudsters and phishermen try to steal our personal information, but the sad truth is that there are many "so called" legitimate people out there doing the same thing.

Jon Schwartz of USA Today reported:

In snooping on a reporter to pinpoint internal news leaks, Hewlett-Packard used high-tech tools common to spammers, phishers, retailers, suspicious employers and investigators.

Those tools, including phishing-style e-mail and tracing software, underscore the growing use of electronic surveillance to monitor consumers' every digital move, computer-security experts say.

Misleading e-mails from HP investigators to CNet reporter Dawn Kawamoto "smacked of phishing tactics" to trick her into divulging information, says Dave Jevans, chairman of the Anti-Phishing Working Group.
USA Today story, here.

What the computer security experts might be referring to are "keyloggers."

If you would like to see how (anyone) can use this technology, link here.

Unfortunately, it doesn't take a private investigator, or computer security expert to electronically invade someone's privacy.

My question is - with the abuses of this technology - why is it legal?

Fraudsters Use Religion to Cover their Misdeeds

I believe that the majority of people - who profess a belief in god are good people. Unfortunately, there are some out there, who use religion as a cover for their "misdeeds."

And when they do so - they steal from the "good" to line their own pockets.

The LA Times is reporting that two former executives with the Baptist Church of Arizona were sentenced of defrauding approximately $600 million from their flock.

Sadly enough - they've only been ordered to repay about half that amount and are getting six years in prison. With good behavior (I have no doubt both of them will be extremely religious), I wonder how much time they will actually serve?

Oh - and most of the people they defrauded were elderly! Some might term this "elder abuse."

LA Times article, here.

Another story broke yesterday about two priests - who are being accused of skimming $8.4 million from collection plates to pay for lavish vacations, luxury apartments, girlfriends and even an Irish Pub.

Full story from, here.

Interestingly enough, the Alabama Securities Commission issued a warning about how religion is being used a tool to defraud unwary people, here.

I guess the moral of the story is to be careful when investing, or giving to anyone. If it doesn't make sense, or seems to good to be true, it probably isn't.

Friday, September 29, 2006

Kentucky Compromises the Identities of their Own

It appears that the State of Kentucky has "bungled" and exposed a lot of their own workers.

Roger Alford of the AP is reporting:

FRANKFORT, Ky. - Letters sent to 146,000 government employees in Kentucky inadvertently displayed each of their Social Security numbers on the front, prompting Attorney General Greg Stumbo to issue a warning about possible identity theft.

"The Social Security number is the key that unlocks many doors for identity thieves," Stumbo said in statement. "With that information, an identity thief has access to a host of information about consumers."

AP story, here.

Unfortunately, data breaches seem to occur (often) and one the leading causes is "inept behavior" by those charged with protecting the information.

If you are interested in seeing a "chronology" over the past few years (courtesy of the Privacy Rights Clearinghouse) - link here.

I found this story on "Pogo Was Right," which is a great resource on privacy issues.

Civil Actions are unlikely to stop fraudulent activity on eBay

I've written a thing, or two about fraud on eBay and auction sites in general.

Now we are seeing the retail industry go on the offensive for the large quantities of "knock-off" (counterfeit) goods available on the site. Tiffany's, Louis Vuitton and Dior Coutre have all filed lawsuits.

Microsoft took a different approach and is going directly after the sellers.

And counterfeit goods aren't the only fraud category on auction sites.

eBay has the distinction of being one of the most "phished" brands. And besides counterfeit goods, fencing operations are common on eBay. In fact, I was recently told that Target dedicated a full-time investigator to watch for their stolen goods on eBay.

Will this lead to additional civil actions?

Brian White (Blogging Stocks) hits the problem right on the head in a recent article:

Although eBay likes to let its buyers and sellers meddle with each other without oversight, this stance alone, combined with the unusually high numbers of Internet visitors eBay sites get, has made it a huge hotbed of forgery, fakes and fraud in every imaginable category. This should have been widely expected -- the formula for fraud contains a few things that the Internet promulgates -- larger visitorship, buyers ready with "cash" in hand and a low level of policing by the administration. Hmm, 2+2 definitely equals 4 here, yes?

Link, here.

From the criminal point of view, eBay has a business model that makes it easy to commit fraud. The Internet has made it much easier to commit crime and disappear in an "electronic mist." Coupled with a ever-growing identity theft crisis - it's very easy for the criminal element to use a legitimate person's identity and once it's compromised move on to another persons.

Another thing to consider is eBay - although considered the guru of the industry - isn't the only player in it. You can find "fraud, phishing and financial misdeeds" on any of the auction sites out there.

In the end -- although action is being taken -- it's unlikely that any of these lawsuits are going to do much good for the consumer, or hurt the criminal element operating on auction sites.

The sad truth is litigation costs a lot of money and expenses (including fraud) normally end up getting passed on to the consumer.

Perhaps the money being spent on litigation would be better spent on going after the people causing the problem?

Of course -- in order to do this -- all the corporate giants involved would have to work together and go after the core problem instead of attacking each other.

And there is a financial incentive for them to do so - consumer confidence is a key economic factor. If the rapid increase in fraud (driven by technology) continues, they are likely to lose the reason for their lucrative margins, or to put it (quite simply), their customers.

Wednesday, September 27, 2006

QChex Shut Down by California Federal Court

Bob Sullivan of MSNBC is reporting that Qchex has been temporarily shut-down by a California Federal Court after (it seems) - Qchex check scam artists targeted government agencies - including the FTC (Federal Trade Commission).

This is good news because Qchex - who e-mails checks without verifying them properly - has victimized a lot of people in their (not very ethical) quest to make money.

According to the article - the FTC is taking civil action against Qchex, also.

MSNBC story, here.

If you would like to learn more about Qchex and how check fraudsters use their service, here is my most recent post on them:

If You Receive a Qchex (Check), Extreme Caution is Recommended

Sunday, September 24, 2006

The Shopping Group Inc. is a Secret Shopper Scam Outfit

The Shopping Group Inc. of Kitchener, Ontario (Canada) is sending out counterfeit checks recruiting people to become secret shoppers. The mission - should they choose to accept it - is to cash a fraudulent check and wire the money back to their superiors.

Of course - if caught, or when they are - The Shopping Group Inc. - only cares that the proceeds are wired back to them, preferably by MoneyGram, or Western Union.

It seems (as usual) - they are asking their employees (victims) to shop Walmart - probably because Walmart offers both "check cashing" and "wire transfer" services.

Although - I am taking a light hearted approach to this - anyone who falls for this ploy is likely to be out of a lot of money and (maybe) will lose their freedom.

If you receive one of these checks (being sent unsolicited) - take a deep breath - and put it in your "shredder."

To read the story from about this - link here.

Here is the most recent post, I've done on Secret Shopper scams:

According to Google - The Secret Shopper Scam is Acting Up Again

In most of these scams, counterfeit cashier's checks are used, here is a post I did on that subject:

Counterfeit Cashier's Checks Fuel Internet Crime

Richard Clarke's Views on Identity Theft

Richard Clarke - former National Security Advisor and Special Advisor to the President on Cyber Security - has opinions on the current identity theft crisis. And although (to some) his opinions are considered controversial - he is no doubt a person with a great deal of experience.

Four leaders of the "free world" have listened to his opinions.

After leaving government service -- he nows heads a private firm (Good Harbor Consulting LLC) -- which consults on security matters, to include identity theft issues.

Jack Kelly of the Pittsburgh Post-Gazette covered Mr. Clarke's speech at Carnegie Mellon University in 2005 and quoted him as saying:

"Identity theft -- which is being conducted more and more by international criminal gangs based in countries where law enforcement is lax -- is primarily a crime problem, but is also a national security problem."

In this speech - - he also covered the fact that obtaining (high-quality) fake identification is easy and that despite all the security at airports -- there is no attempt to verify, whether or not an ID is legitimate.

Link to full article (speech), here.

Clarke also supports "immediate disclosure" when data-breaches occur and spoke of this in an article, where he was interviewed by Dan Briody (published in CIO Insight). In this article, he also aptly points out the problem of data-mining companies.

Link, here.

Not everyone is going to agree with Richard Clarke, but he does seem to have a lot of valid insights into what has become an international problem.

It would be interesting to see what his opinion is on President Bush's Identity Theft Task Force and the direction they are going.

Sometimes people are "controversial" to raise the "awareness" level on an issue. Come to think of it -- from a historical perspective -- there are a lot of famous people, who were considered "controversial," that were later proven correct.