Recognizing and Handling Online Fraud and Scams Using Company IP

In Part One of this article, in the December 2010 issue, the author detailed some recent online frauds and scams involving the use of a company's intellectual property. Part Two finishes that examination and provides some preventive measures that can be taken to avoid being the target of those scams.

Search Engine Optimization (SEO) Scam

Scammers are always looking for the next best option. In this scam, the scammer tries to anticipate the next hot search topic. For example, if a company is about to release a new product, odds are that the company and product name will be heavily searched on Google and other search engines. The scammer, through the use of questionable search engine optimization techniques, attempts to get its fraudulent site to appear very high on the natural search results. The fake site may use a confusingly similar domain name or other company intellectual property in an effort to trick a searching party. Once the searching party clicks on the scammer's site, it could lead to identity theft or malware infection.

e-Card Scam

The scammer designs official looking e-cards that look as if they are coming from legitimate card companies, such as Hallmark. Once the e-card is clicked on and activated, it can deliver malware, spyware, or other problematic viruses. The scammer may even research the recipient through Facebook and try to find a name to act as the sender.

Companies involved in the e-card and related businesses should monitor these scams closely and include warnings on their main sites.

Mystery Shopper Scam

Similar to previous “deposit and wire back” scams, the scammer claims to be from a legitimate mystery shopper organization or company. The victim is sent a check for thousands of dollars (say $5,000) that is to be used for the shopping. The victim then is asked to wire back to the scammer a portion of the money. Soon thereafter, the original scammer check bounces and the victim is on the hook for the money it wired back plus whatever he/she spent buying products.

Fake News/Delivery of Malware Scam

The scammer circulates a fake e-mail to victims in a particular geographic area. The e-mail includes information about a fake bomb explosion or some other local disaster. The e-mail includes a link to a fake news site where the remaining information can be found. If the victim visits the fake news site, malware or other harmful elements will be downloaded on the victim's computer.

The “catch” in this scam is that through the use of IP location technology, the scammer is able to tailor the fake e-mail, site and news to the victim's geographic location.

Swine Flu Scam

While this one involved a scam pretending to be the U.S. government, it could easily have been a site designed to look like a pharmaceutical or other health-related company.

A virus was spread through spam e-mail messages that urged recipients to visit a fake site where swine flu vaccinations (or information) were offered. The spam e-mail was meant to look as if it came from U.S. Centers for Disease Control.

Fraudulent Sweepstakes and Contests

The scammer sets up a fake site and/or sends out a fake e-mail promoting a brand owner's sweepstakes or contest. If a person falls for the scam, he/she may lose the paid entry fee or become a victim of identity theft.

The scammer may also notify a potential victim by e-mail or other means and state that the person has won a company's sweepstakes. The victim is then prompted to wire a processing fee in order to have the prize delivered. If the scam is tied to a specific celebrity or company, the scammer may require that the victim wire money for airfare in order to collect the prize.

While not done over the Internet, these scams have also used fake caller ID displays to call potential victims in order to commit the fraud over the phone.

Search Engine Keywords

Certain search engines allow for the purchase of keywords so that when the keyword is searched, the purchasing party's advertisement and site link appear in a prominent place on the first page of the search results.

It is not uncommon for companies to purchase as a keyword the trademark of a third party. While the legality of simply purchasing the keyword is still unsettled, the content of the resulting advertisement can at times raise trademark infringement and unfair competition issues. This is especially true if the trademark is used in a manner that suggests that the resulting advertisement originates from the brand owner.

Fake Invoices and Delivery Notifications

These fake notifications are designed to look as if they are coming from major shipping entities such as FedEx, UPS, and the U.S. Postal Service. The scammer requests additional information through the notification, including possibly a credit card number, in order to complete the transaction. Identity theft is the goal.

Suggestions for Combating IP Scams on the Internet