Fraud on the Internet

Postal Inspectors Confront a New Challenge

By By Martin T. Biegelman, CFE

When asked why he robbed banks, Willie “the Actor” Sutton, a notorious gangster of the 1940s and 1950s, said, “Because that’s where the money is.” Sutton knew where the money was then, and today’s criminal knows where it is now: the Internet. A new breed of scam artists is using modern technology to swindle far more money than Sutton ever dreamed.

While some call the Internet a new frontier for fraud, it may be more accurate to view it as a new battleground for fraud, where war is being waged by those who want to use it for their own illegal ends, and those in the criminal justice system who are fighting to keep this new venue for consumers crime-free. The Internet is teeming with schemes, as swindlers learn how easy it is to exploit innocent victims via this semi-anonymous medium. Law enforcement officials and fraud examiners must be prepared to meet the challenge.

For more than 200 years, postal inspectors have safeguarded customers of the U.S. Postal Service. As we enter a new millennium, the U.S. Postal Inspection Service remains committed to its tradition of consumer education and protection. Continuing the emphasis on halting traditional fraud schemes, the Postal Inspection Service now is addressing the issue of fraud on the Internet.

What do postal inspectors, protectors of the U.S. Mail, have to do with Internet fraud? Fraud on the Internet results in mail fraud when cyberscammers receive payments for their illegal schemes through the U.S. Mail.

The Net Keeps Growing  

Studies indicate that in 1994 about one million Americans went “online,” and by May 1996, about 35 million were “surfing the Net.” Recent figures are even more astonishing: More than 100 million people are now online, and within a few years that number could double. New technology that brings the World Wide Web to your television set may speed that growth.

Young people are not the only ones using the Net: Sixty-seven percent of users are 30 years or older, and 19 percent are more than 50 years, according to the U.S. Department of Commerce. About 10 million people have made a purchase online, and electronic commerce is expected to reach $300 billion by 2002, the Commerce Department said. Internet users are more affluent than the average population – about 42 percent have incomes greater than $50,000, making them perfect targets for scammers. Internet users are also better educated than most. A better education may protect some from fraudulent schemes, but greed and naiveté often win over common sense.




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