Appendix 1: Common Types of Online Fraud

Online intellectual property theft

You have intellectual property rights to any material you’ve created. This means you own exclusive rights to use, publish or sell that material. But when this material is in electronic form on the Internet, it could easily be copied and used without your permission. Text, images and multimedia you’ve created for your own website could turn up on someone else’s site, for example. Or perhaps that software program you wrote gets illegally copied and distributed for free when you intended to sell it. Whenever your intellectual property is stolen via the Internet, you’re a victim of online intellectual property theft.

Identity theft

It’s easy to store and access personal information on the Internet. Unfortunately, that means it’s also easy for people to obtain this information illegally. This is identity theft. Stolen details such as names, addresses, birth dates, and account or card numbers all build up an identity that can be used to commit fraud. Because online trading isn’t face-to-face, it’s easy for someone to hide behind a stolen identity and make fraudulent purchases or requests.


Any email or website that requests private information such as credit card numbers, account numbers or passwords may be an attempt at ‘phishing’. Any information you send to a phisher may be used unlawfully. Even if the request looks genuine, it is still sensible to make independent checks on its validity. For example, if you receive an email from a bank asking to confirm an account number, don’t reply immediately. Ring your bank to confirm the request, and don’t use any phone numbers included in the email - they could be fake.


If you click on a link and find yourself at an unexpected website, you may have been ‘pagejacked’. This happens when someone steals part of a real website and uses it in a fake site. If they use enough of the real site, Internet search engines can be tricked into listing the fake site and people will visit it accidentally. The fake site could contain unwanted or offensive material. As an online merchant trading via a website, you need to know that your site isn’t being stolen in this way. Unfortunately you can’t prevent pagejacking; you can only deal with it after you know it’s a problem.

Advance fee scams

An advance fee scam is fairly easy to identify – you will be asked for money or goods upfront in return for giving you credit or money later. These advance fee scams can seem convincing and have taken in many people. One example of an advance fee scam plays out in online auctions. If a buyer sends you a check for much more than you asked, be suspicious. If you accept the check and refund the extra money to the buyer, you may find out later that the check was bad and that you’ve lost the whole amount.

Bad check scams

Always be wary of unusually large orders, even when the customer is paying in advance by wire transfer (an extremely safe method of payment when performed bank-to-bank). Though the transaction could be perfectly legitimate, pay attention if the customer asks for your bank’s address or suddenly asks to pay by check instead of by transfer. In both cases, the customer may be about to pull a bad check scam. Both scenarios allow the customer to deposit money into your account by check. If the check is a clever fake and you accept it as payment, you lose both the money and the merchandise.

Fake money orders

Usually a money order is one of the safest ways to receive payment. The amount is prepaid by the customer, and a bank passes the amount on to the merchant. Because the money is handled via a third party and can be transferred internationally, many online transactions are made using money orders. They’re difficult to counterfeit, but be especially cautious of money orders from high-risk areas such as Asia, Africa, Eastern Europe, the Middle East or Russia, as counterfeit money orders from these areas are unfortunately becoming more common.

Wire transfer fraud

As long as you avoid transfers via cash offices and stick to transfers performed bank-to-bank, wire transfer is a very safe way to move money around. This doesn’t apply if you’re asked to accept money and then pass it on to someone else via wire transfer. If that happens, be suspicious, especially if you’re asked to do this by anyone you don’t know well. You may think you are helping someone, but actually this is a form of money laundering used by organized crime. Though your money isn’t being stolen, falling victim to wire transfer fraud can get you into trouble with the authorities.