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Pulling the hype out of online fraud.

By unstable in MLP
Sat Nov 18, 2000 at 11:55:46 PM EST
Tags: Internet (all tags)

In this story on E-Marketer they basically say that online fraud is the same old tricks on a different media (well duh)

What I find the more interesting thing is the stats on what types of fraud is most reported.
With 87% auctions have a huge lead over general merchandise (7%), internet access service (2%), and computer equipment sales (1.2%), with stuff like pyramid schemes (0.1%) and adult services (0.2%) at the bottom.
How accurate do you think these numbers are? What do you think the percentage of NON-reported acts of fraud?


Voxel dot net
o Managed Hosting
o VoxCAST Content Delivery
o Raw Infrastructure


Have you ever been the victim of a scam? (online or offline)
o Yes. 15%
o No. 45%
o I run a pyramid scheme. 17%
o The great and almighty Bob. 21%

Votes: 183
Results | Other Polls

Related Links
o this story
o E-Marketer
o Also by unstable

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Pulling the hype out of online fraud. | 10 comments (8 topical, 2 editorial, 0 hidden)
unreported Fraud (3.57 / 7) (#1)
by jabber on Wed Nov 15, 2000 at 12:57:09 PM EST

I'd think that the unreported fraud types are more likely to be of the 'obvious scam', 'not expensive' and 'illegal' variety.

What causes people to report instances of fraud is financial loss. Honestly, we may be outraged and insulted by lots of kinds of fraud, but if it doesn't cost us anything, we are not likely to go through the hassle of reporting it. Admitting to having been scammed must be very embarassing for people. Many must really work hard against their denial, and their pride, to even think about seeking help.

And the most common kind of unreported fraud? The people who got scammed out of money they spent on things that are illegal... I'm sure very few people admit to having been ripped off when trying to buy kiddie porn, cable descramblers or drugs.

[TINK5C] |"Is K5 my kapusta intellectual teddy bear?"| "Yes"

unreported fraud also comes from shame (4.33 / 3) (#6)
by Speare on Wed Nov 15, 2000 at 03:34:56 PM EST

You address two camps: victims-who-seek-illegal-gains, and ashamed-but-blameless-victims.

There are thousands of gullible people scammed out of their money every year, for things that would be perfectly legal for the victim to be engaged in doing.

These people have financial loss. These people did nothing illegal. They just don't want to have lots of attention brought onto themselves as the victim.

How many married men lose money to shady porn companies (porn is legal, fraud is not), but don't chase after the loss because the wife would be outraged? (With 0.2% reported, what's the real number?)

How many elderly are swayed by charming "investment strategists" who suggest that they should try a few higher-return investments to leave a great legacy nest egg for their kids?

[ e d @ h a l l e y . c c ]
[ Parent ]
Statistics on statistics (2.33 / 9) (#3)
by rednecktek on Wed Nov 15, 2000 at 01:26:09 PM EST

Of the 16% of the people who believe that the moon is made of cheese, 93% of them believe 87% of statistics having a total of less than 100% are made-up.

Just remember, if the world didn't suck, we'd all fall off.
Irrelevant... (1.66 / 3) (#4)
by SbooX on Wed Nov 15, 2000 at 01:31:30 PM EST

After all 87% of all statistics can be made up by anyone!


god is silly. MGL 272:36
[ Parent ]

roundoff (2.00 / 2) (#7)
by plastik55 on Wed Nov 15, 2000 at 10:27:37 PM EST

If you conduct a poll and ask 300 people to choose between 3 options, and 100 people pick each option, how do you report it as percentages?

The most accurate way is to be honest: 33% voted for each option. Problem is that 33% * 3 = 99% -- one percent went to round off error.

You can't say that the percentages were 33%, 33% and 34%, because that would be more innacurate and you'd have to arbitrarily pick one of the options to misrepresent.

If you add up the listed percentages in the article linked to (hint: if you read the writeup carefully, you notice it leaves open the possibility that there are percentages that weren't listed in the writeup) you get 99.1%. That's totally reasonable given the expected amount of round off error.

[ Parent ]
Just out of curiosity (2.00 / 1) (#8)
by skim123 on Thu Nov 16, 2000 at 07:34:21 PM EST

A decent percentage of the poll responders said they have been taken by some sort of fraud (either on or off line). Just curious as to what type of fraud that might have been...

Money is in some respects like fire; it is a very excellent servant but a terrible master.
PT Barnum

I'm too Jung to know much about Fraud (2.50 / 4) (#9)
by freebird on Fri Nov 17, 2000 at 08:49:01 PM EST

I don't see why everyone makes such a big deal about fraud. Let bygones be bygones, that was another century. What's a little cocaine and victorian incest fantasy. Sometimes a cigar is just a cigar. And they build rockets that shape for the aerodynamics, you naughty boy.

I don't understand why anyone would auction fraud, but if 87% want to, it's a free country. Given the content matter, I'd expect much more than .2% of fraud to be adult - have you read any of that stuff? Sheesh! I bet fraud gets filtered in most public libraries and school around the world.

Finally, I'm sure pyramid scheme fraud is a very serious matter, especially the kind with the big eye in the middle. If the illuminati get ahold of fraud, watch out, because they'll know what you're dreams mean. And where will you hide from the Men In Black Helicopters then, Mr. Psycho Analyst?


Worth noting... (2.00 / 1) (#10)
by Miniluv on Sat Nov 18, 2000 at 07:52:42 PM EST

Fraud, like most other forms of computer crime, hasn't actually changed much with the move to the "digital world". I find it interesting that there is such continuity in human endeavors, that schemes haven't become more complex, in fact if anything they've gotten cheaper and simpler for the criminals to use.
Fraud, in this case, isn't really any different than any of the other crimes that have moved to the 'net and fraud targeted at consumers (like pyramid schemes and auction fraud) is really pretty small change compared to the vast syndicates perpetrating credit card and check fraud.
For more on this topic, check out the first couple chapters of Bruce Schneier's newest book Secrets & Lies, he makes the same points I just did, and supplies some evidence, though mostly anecdotal.
"Its like someone opened my mouth and stuck a fistful of herbs in it." - Tamio Kageyama, Iron Chef 'Battle Eggplant'
Pulling the hype out of online fraud. | 10 comments (8 topical, 2 editorial, 0 hidden)
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