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The Impact of Cybercrime & How to Prevent It

Paper Type: Free Essay Subject: Information Technology
Wordcount: 3760 words Published: 8th Feb 2020

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Approximately 51% of the world’s population, or 3.8 billion people, were internet users in 2017 (Morgan, 2017). It is predicted by 2022, 75% of the world population, or 6 billion of a global estimated population of 8 billion, will be internet users (Morgan, 2017). And by 2030, it is projected that 90% of the world’s population will be internet users. (Morgan, 2017).

Cybercrime is the fastest-growing area of crime on a global and national scale. Cybercrime can be simply defined as using the internet to commit crimes. More and more cybercriminals are exploiting the Internet to commit a diverse range of crimes that knows no borders. Cybercrime poses serious threats to victims worldwide.

IC3 History

In May 2000, the FBI established the Internet Crime Complaint Center, better known as the IC3. The mission of the IC3 is to provide the public with a reliable and convenient reporting mechanism to submit fraud and scams to the FBI regarding possible Internet-facilitated criminal activity, and to develop effective alliances with industry partners. Information is analyzed and disseminated for investigative and intelligence purposes, for law enforcement, and for public awareness. (Federal Bureau of Investigations, 2017)

IC3 was established as a center to receive consumer complaints of Internet crime. If a person has been the victim of an internet crime, the IC3 wants to hear about. Victims can go to the IC3 website, fill out a form, and the complaint is filed.

There have been 4,063,933 complaints reported to the IC3 since it opened in 2000. Between 2013 and 2017, the IC3 has received an average of more than 284,000 complaints per year. The complaints address a wide array of Internet scams affecting victims across the globe. Below is a graph to show the level of complaints and level of financial losses in the previous five years.

Source: (Federal Bureau of Investigations, 2017)

In an effort to promote public awareness, the IC3 produces this annual report to aggregate and highlight the data provided by the general public. The quality of the data is directly attributable to the information ingested via the public interface www.ic3.gov. The IC3 attempts to standardize the data by categorizing each complaint based on the information provided. The IC3 staff analyzes the data to identify trends in Internet-facilitated crimes and what those trends may represent in the coming year.

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The next section of this paper will detail the top scams and frauds reported to the IC3, and how to avoid becoming a victim. The limitations of this research are that cybercrime is prevalent across the internet; all types of crime could not be covered. This does not cover serious crimes such as human trafficking, sex crimes, or terrorism. It outlines the scams and fraud most reported to the IC3 in recent years for current trends against the largest portion of the population.

Since cybercrime is a rapidly growing crime, and trends are constantly changing, resources used were internet based. Some data obtained was as recent as October of 2018.

Auction Fraud and Non-Payment/Non-Delivery Fraud

Auction fraud is when a customer believes they are making a legitimate purchase at an online auctioneer, but the item paid for never arrives. This would also fall under non-delivery fraud, because the item was never delivered to the purchaser. Non-payment fraud is when a person lists items for sale, the interested party says they will send money, the person listing the item ships it, but funds are never received.

The top seven auction sites according to Brown (2018) are eBay, eBid, Bonanza, Webstore.com, Onlineauction.com, Atomic Mall, and eCrater. The top three on that list offers dispute resolution if a customer believes they have been defrauded. The bottom four on the list offers no resolution center at all. A person should only do business if a fraud resolution process is available. For example, eBay offers a money back guarantee if a customer is defrauded. If one does business with Atomic Mall and they are defrauded, the customer is out the money.

There are several red flags to look for as a consumer when dealing with online auctions. If the seller portrays themselves to be in the United States in the listing, but says they had to leave the country for an emergency or business, it is likely fraudulent. Another sign of fraud is if an item is listed under one name, but when it comes time to pay, they ask for funds to be delivered to another name. Any request for funds to be wired by Western Union or MoneyGram is likely fraud, and there is virtually no recourse once they money is wired.  A consumer should not do business if any these signs are exhibited.

Auction Fraud — Romania

Many of the internet frauds attributes overlap one another. Romanian auction fraud has many similarities to the above auction fraud, but this is a very aggressive type based in Romania. The fraudsters are very good at listed every item in high demand, and make it look like they are willing to work with the purchaser. This is done by the listing fraudsters allowing victims to pay for half of the item up front, and the other half when the item arrives. The problem is the item never arrives. The fraudsters aggressively use wire transfers, and also claim to be in the United States up front, but the money always has to be sent overseas.

One recent trend with Romanian Auction Fraud is the fraudster requests a bank-to-bank wire transfer through a large United States based bank. Unbeknownst to the customer, these accounts are routed to Bucharest, Romania or Riga, Latvia. (FBI: Internet Crime Complaint Center (IC3), n.d.). With any auction, do not wire money!

Escrow Services Fraud

Like many other frauds, the person committing the fraud is very convincing in the requests and offers made. For example, in Escrow Service Fraud they fraudster comforts the victim by offering to put the money in a third-party account, an escrow. The victim believing it’s a legitimate escrow account, deposits the requested funds. The fraudster has created a website that looks real, even like a legitimate escrow provider. By the time the victim discovers they have been defrauded, the website is shut down and the victim is out the money.

Counterfeit Cashier’s Check

The counterfeit cashier’s check scheme targets individuals that use Internet classified advertisements such as Craigslist to sell goods. It is common for the interested party to be located overseas. The interested party convinces the victim a cashier’s check will be mailed to them by an associate located in the United States. When the cashier’s check arrives to the victim, it will be thousands more than it was supposed to be. The victim is told to deposit the check, and when it clears, to wire the excess funds back to the fraudster, usually going to a bank in Nigeria, West Africa. Since most banks do not put a hold on cashier checks beyond a day or two, the funds are available quickly.  The victim then wires the funds overseas. Shortly after the cashier’s check was deposited, the bank contacts the victim the check was fraudulent, and the victim is responsible for funds that were wired. The victim would be out thousands of dollars before the fraud was even discovered.

As stated before, do not participate in wire transfers.

Credit Card Fraud

According to Green and Hanbury (2018) of Business Insider, the following companies have had credit card data breaches since January of 2017; Cheddars Scratch Kitchen (from 23 United States), Macy’s, Adidas, Sears, Kmart, Delta Airlines, Best Buy, Saks Fifth Avenue, Lord and Taylor, Under Armour’s MyFitness Pal app (150 million people affected), Panera, Forever 21, Sonic Restaurant, Whole Foods, Gamestop, and Arby’s. (Green & Hanbury, 2018)

The same article states cybersecurity company Shape Security revealed that nearly 90% of login attempts made to online retailers was made by hackers using stolen information.

Debt Elimination

This is a scheme that is a double-edged sword. The fraudster convinces the victim that for only $1500 to $2000, all of the credit cards or even mortgage can be paid off. The second part is the victim fills out a power-of-attorney form which exposes personal information such as full name, date of birth, and social security number. This not only exposes the victim to fraud, but also identity theft. The fraudster claims to issue bonds and promissory notes to the credit card or mortgage lender that satisfies the debts of the victim.

Parcel Courier Email Scheme

Have you ever received an email stating that “your parcel was undeliverable” followed by a long reference number that looks like it is from UPS or another delivery service? This is a phishing scam that increases in popularity around the holiday season. According to the USA Today article, this is a $445 billion scheme.

The fraudster sends an email that looks legitimate from a major courier in an attempt to get the consumer to enter personal information including checking or credit card information.

Identity Theft

Identity theft occurs when a victim provides personal information to the scammer. This is often accomplished by the scammer posing to be a victim’s bank, credit card company, or employment website asking the consumer to provide or update their personal information. If a scammer is able to gain the personal information of the consumer, and opens a credit card in the consumers name, this is an example of Identity Theft. Another costly example of this is if the scammer obtains the victims personal information, and detailed mortgage information, scammers have actually sold the victims property to another victim purchasing it.

Internet Extortion and Ransomware

Ransomware is more common to places of business, such as the healthcare industry. If the system they are hacking has weak internet security that easily penetrated, all that is needed in one employee to open an email containing a virus that will lock the whole system down. The fraudster then demands a ransom to unlock the virus, otherwise the entire system is useless. Internet extortion involves hacking into and controlling various industry databases, promising to release control back to the company if funds are received. Similarly, the subject will threaten to compromise information about consumers in the industry database unless funds are received.

Investment Fraud

The U.S. Securities and Exchange Commission website (n.d.), www.investor.gov, lists, alone, 15 types of investment fraud. A common theme to many of these schemes is high returns on investments, investments that are not registered, investments sold by scammers unauthorized to sell stocks or bonds, difficulty for the investors to exit the investments.


Ponzi or pyramid schemes is one investment fraud that collects money from newly scammed victims and pays previously scammed victims from the newly acquired funds. The scammers convince new victims of high returns with little to no risk (U.S. Securities and Exchange Commission, n.d.). This scheme was names after Charles Ponzi, who in the 1920’s promised a 50%-100% profit on a postal stamp scheme. He would pay previous investors from new investor’s funds. Ponzi ran this scheme for a year before it collapsed, and victims were swindled out of $20 million dollars.

A pyramid scheme is very similar but involves more people. It still collects funds from new victims and pays previous “investors” or victims (U.S. Securities and Exchange Commission, n.d.).


The lottery scheme is when a victim is contacted by email that they have won an international lottery. The fraudster will either ask the victim to pay a small fee ranging from $1000 to $5000, and the winnings will be wired back to the victim. Like any other scheme above, the victim should never wire money or give checking account numbers to the fraudsters. Remember, once money is wired it is gone. And giving out checking account information is equally as bad, because the fraudsters make withdrawals before the victim realizes it’s a scam. The email message usually reads similar to the following:

“This is to inform you of the release of money winnings to you. Your email was randomly selected as the winner and therefore you have been approved for a lump sum payout of $500,000.00. To begin your lottery claim, please contact the processing company selected to process your winnings.” (FBI: Internet Crime Complaint Center (IC3), n.d.).

A few other red flags that the lottery is a scam include; emails that contain misspelled words and poor grammar, phone calls from outside the United States, if the scammer tells you to keep the winnings and communication confidential, and if the scammer says the winnings are from the World Lottery Association (WLA). The WLA is a legitimate global organization that helps real lotteries establish best practices, a person cannot win anything from the WLA (World Lottery Association, n.d.).

Nigerian Letter Or “419”

Section 419 of the Nigerian Criminal Code outlaws this scam that originated in Nigeria. In this scam, the fraudster asks for the victim to help them transfer a large sum of money out of Nigeria and the victim is told they will receive a reward for doing so. The scammer targets victims by email, text message or social media. The scammer will provide an elaborate story about how there is a large sum of money that is trapped due to a civil war or coup. The scammer will offer the victim a large sum of money for helping move the money to a foreign account. The scam occurs when the fraudster convinces the victim to pay fees to release the money, or taxes.

Personal Data Breach

If a person uses public unsecure Wi-Fi, this can leave the individual exposed to a data breach. A data breach occurs when an untrusted source gains access to private, personal data on a private computer.  With a few tools, a scammer can even “hijack” your internet session by taking over on whatever webpage a consumer may be on. The best solution for a consumer to protect the data transmission is to establish a Virtual Private Network, better known as a VPN. There are many VPN providers available. Having a VPN encrypts an individual’s data before it ever hits the internet. VPN’s can range in cost from around $3.00 – $10.00 a month (Smith, 2018).




When a person goes fishing, they drop a line in the water hoping to catch a fish. Phishing is the same principal. Fraudsters send out tons of email posing as a legitimate site such as eBay, or PayPal asking the potential victim to update personal information. The websites look legitimate but is not. If the fraudsters send enough emails, they are likely to get a “bite” in a victim. 

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Spoofing, meaning to hoax or trick, is another popular internet scam. It is most commonly associated with email fraud. It appears to the victim as a legitimate email address from a user they are familiar with, when it is actually an altered address from a scammer. Again, they may email the victim asking them to update sensitive account information or a link to pay a bill. The best way to avoid these scams, is to verify the sender. Usually if one replies to a spoof email, the email address does not match the legitimate address.


Reshipping is another scam based overseas. The fraudster posts work-at-home help wanted ads on internet sites to recruit victims. What the scammer does is has merchandise that is stolen or fraudulently obtained shipped to the victim’s residence. The victim then ships these items overseas. When the victim receives payment, it is by a counterfeit money order.

The best way to avoid this scam is not to reply to the job advertisement.


Like many of the frauds and scams intersect each other, spam can be tied to phishing. It is where a scammer sends thousands of emails at one time hoping to get a victim to click on the advertisement. The top spammed topic is for international pharmacies. Spam can also be a link to malware or a virus.

A good email client will have a spam folder established already, but due to the large volume of email transmitted, a spam scam can get to a victim’s main inbox. So, if one receives an email making an offer for weight loss, online casino, or replica jewelry, do not click on any links.

Third Party Receiver of Funds

Similar to the reshipping scam, an overseas scammer posts a work-at-home job on a legitimate job board. The scammer claims to run online auctions in the United States and needs a third party to receive the funds because the scammer claims difficulty in receiving funds in their country. So, the scammer not only defrauds the individual on the auction site, they set the third-party up to receive the funds and wire them overseas. The first victim never gets the merchandise they paid for, and the third-party never gets paid.

And just like with reshipping, the best way to avoid this scam is not to reply to the job advertisement.

Employment/Business Opportunities

As with previous scams, the scammer is overseas and posts work-at-home jobs on legitimate jobs board. With this scam the fraudster asks for your personal information for employment purposes. This scam can also involve reshipping or receiving third-party funds, and once again, wire the money overseas. This scam can also involve the same methods used with cashier check fraud.

Stay away from online overseas job advertisements!


The global demand for Information Security Analyst careers will grow to approximately 6 million positions by 2019. Cybercrime will cause triple the number of career openings to 3.5 million unfilled Security Analyst positions by 2021, with a global unemployment rate in this profession at zero-percent.

The United States Department of Labor reports there will be a 28% increase in demand for Information Security Analyst between the years of 2016-2026. The 2017 median annual pay for these careers was $95,510 (U.S. Department of Labor, n.d.). 


After presenting many of the current trends of frauds and scams in this paper, based off of the FBI IC3 data, and many other sources, it is obvious to this author not enough is being done to combat cybercrime on a national or global level. This paper touched the tip of the iceberg with the various crimes, the enormous number of victims, and financial loss on a global scale. It seems law enforcement is trying to play catch up with cybercrime, but the cybercriminals are miles ahead in this pursuit of justice.  Law enforcement agencies globally need to unify against cybercrime. FBI and Interpol share information, but are they truly work together to combat cybercrime. It took a horrific event in the 9/11 attacks for local and federal law enforcement agencies to truly start working together. Hopefully agencies on a global scale can work together before cybercrime gets out of hand.


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  • Federal Bureau of Investigations. (2017). 2017 Internet Crime Report [Data file]. Retrieved from https://pdf.ic3.gov/2017_IC3Report.pdf
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  • Green, D., & Hanbury, M. (22, August 2018). If you shopped at these 16 stores in the last year, your data may have been stolen. Retrieved from https://www.businessinsider.com/data-breaches-2018-4
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  • World Lottery Association. (n.d.). WARNING: Beware of fake lottery scams. Retrieved From https://www.world-lotteries.org/services/scam-protection


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