Glossary of Fraud Terms
Adware – Adware is a category of software that often comes with free downloads. Some adware displays advertisements on your computer, while some monitors your computer use (including websites visited) and displays targeted ads based on your use.
Advance Fee Fraud - a very common scam in which a fee is demanded from the victim in advance of the victim receiving a lottery winning, a loan, money from a dead relative, etc. Often these scammers are based in Nigeria, the Netherlands or China.
Anti-virus Software - Protects your computer from viruses that can destroy your data, slow your computer's performance, cause a crash, or even allow spammers to send email through your account. This is essential software for every computer connected to the internet.
Business Opportunities (or Bizopps) – Many are schemes that typically involve extravagant and unfounded earnings claims and are actually fraudulent business ventures.
Browser - A program that allows a user to find, view, hear, and interact with material on the Internet. These might include Internet Explorer, Safari, Firefox.
Browser Hijacker - A common spyware program that changes your web browser's home page automatically, even if you change it back.
CAN-SPAM Act - A law that prohibits senders of unsolicited commercial email from using false or misleading header information or deceptive subject lines. It requires they identify each email as an advertisement, among other provisions.
Cashiers Check (or Cheque) - A check drawn on the bank’s account, supposedly the most secure type of check. Unfortunately, these are very easily counterfeited. Always confirm all aspects of the check with the issuing bank and with the holder of the account, before considering it to be valid.
Chat Room - The name given to a place or page in a website or online service where people can type messages which are displayed almost instantly on the screens of others who are in the "chat room."
Computer Fraud - Computers are being used extensively in financial crimes, not only as an instrument of the crime, but to "hack" into data bases in order to: retrieve account information, store account information, clone microchips for cellular telephones and scan corporate checks, bonds and negotiable instruments which are later counterfeited using desktop publishing methods. In 1986, Congress revised Title 18 of the United States Code to include the investigation of fraud and related activities concerning computers that were described as "federal interest computers," as defined in Title 18, United States Code, Section 1030.
Cookies - A small text file that a website can place on your computer's hard drive to collect information about your activities on the site. Cookies also allow your computer to "remember" information about sites you visit frequently.
Credit report - A report containing detailed information about a person's credit history, including personal identifying information (such as name, address and social security number), credit accounts and loans, bankruptcies and late payments, and recent inquiries. It can be obtained by prospective lenders and others with access to the system, with the borrower's permission, to determine his or her creditworthiness. Consumers are entitles to view their credit report for free once per year. Each of the "big three" reporting agencies make reports available at www.annualcreditreport.com.
Cyberspace - Used to distinguish the physical world from the digital, or computer-based world.
Domain - A segment of Internet space, denoted by the function or type of information it includes; current domains include ".com" for commercial sites, ".gov" for governmental ones, and ".org" for non-commercial organizations.
Download - To copy files from one computer to another or to view a website or other web material with a browser.
Drive-by Download - Software that installs on your computer without your knowledge when you visit certain websites. To avoid drive-by downloads, make sure to update your operating system and Web browser regularly.
Encryption - The scrambling of data into a secret code that can be read only by software set to decode the information.
End User Licensing Agreement (EULA) - A provider's legal terms. You, as the "end user," may be required to "click" to accept before you can download software.
Exposure - When sensitive data is released to someone without authorization.
Extended Service Set Identifier (ESSID) - The name a manufacturer assigns to a router. It may be a standard, default name assigned by the manufacturer to all hardware of that model. Users can improve security by changing to a unique name. Similar to a Service Set Identifier (SSID).
FTC - Federal Trade Commission
Forgery - During a fraudulent transaction, a check/bond thief usually forges (fakes) the payee's signature and presents false identification. Hundreds of millions of government checks and bonds are issued by the United States each year. This large number attracts criminals who specialize in stealing and forging checks/bonds from mail boxes in apartment houses and private homes.
Fraud - a scam meant to cheat victims out of the fair settlement of an agreement by misleading and misrepresenting the facts, method or outcome, with no intent to fulfill the agreement.
"Fudiciary officer" - a misspelling of "Fiduciary officer". Scammers, being largely uneducated criminals, frequently misspell this in their scams. No legitimate company would make this mistake.
Filter - Software that screens information on the Internet, classifies its content, and allows the user to block certain kinds of content.
Firewall - Hardware or software that helps keep hackers from using your computer to send out your personal information without your permission. Firewalls watch for outside attempts to access your system and block communications to and from sources you don't permit. A firewall is essential for every computer accessing the internet.
Hacker - Someone who uses the Internet to access computers without permission.
Hidden Dialers - Programs that you may unknowingly download, which can use your computer to silently dial expensive phone calls that later show up on your phone bill.
Hoax - something intended to deceive; deliberate trickery intended to gain an advantage. Hoaxes can be relatively benign, intended for the hoaxster's amusement, or destructive and intended to lead to one of many varieties of theft.
Identity theft – The fastest growing crime in the United States, according to the Federal Trade Commission, identity theft is a fraud that is committed or attempted, using a person’s identifying information without authority. An imposter obtains key pieces of personal data, such as Social Security or driver's license numbers, in order to impersonate someone else. The information can be used to obtain credit, merchandise, medical services or other services in the name of the victim, or to provide the thief with false credentials. In addition to running up debt, an imposter might provide false identification to police, creating a criminal record or leaving outstanding arrest warrants for the person whose identity has been stolen.
Instant Message (IM) - Technology, similar to a chat room, which notifies a user when a friend is online, allowing them to "converse" by exchanging text messages.
Internet Protocol (IP) - The computer language that allows computer programs to communicate over the Internet.
IP Address - A computer's unique "address," it consists of a series of numbers separated by periods.
JPEG - Short-hand for "Joint Photographic Experts Group," a computer file format that reduces the size of graphics by using compression.
Keystroke Logger - A device or program that records each keystroke typed on a particular computer.
LAN (Local Area Network) - A network of connected computers that are generally located near each other, such as in an office or company.
Lottery - distribution of prizes by chance where the persons taking part make a payment or consideration in return for obtaining their chance of a prize. A lottery is a promotional device by which items of value (prizes) are awarded to members of the public by chance, but which requires some form of payment to participate. In other words, if you did not buy a ticket, YOU COULD NOT HAVE WON a lottery - no matter what anyone tells you! Lotteries in the United States, Canada, Australia and Great Britain, and most developed countries, are illegal, except when conducted by states and certain exempt licensed charitable organizations.
Lottery scams - A lottery is a form of gambling, which involves the drawing of lots for a prize. By definition, entrants must purchase a ticket to be eligible to win. Ticket sales provide the revenue for the cash prizes. Some governments forbid lotteries, while others endorse them to the extent of organizing a national lottery (such as Spain and the UK). It is common to find some degree of regulation of lottery by governments. Lotteries are most often run by governments or local states and are sometimes described as a regressive tax, since those most likely to buy tickets will typically be the less affluent members of a society. The astronomically high odds against winning have also led to the epithets of "idiot tax," "tax on stupidity," or "math tax.
Lotto is a game where winners are determined by matching the player's number with numbers that are drawn. If the winning numbers are not held by any player, the prize rolls over and grows. The rolling over of the prize is crucial to a modern lottery's success, because it creates a large jackpot, which has a significant effect in stimulating sales.
Malware - software designed to cause harm to the victim(s) where it is installed; such as stealing identity information, releasing viruses or worms, or presenting ads.
Money Laundering - the "cleaning of money" with regard to appearances in law, is the practice of engaging in specific financial transactions in order to conceal the identity, source and/or destination of money and is a main operation of underground economy. In the past, the term "money laundering" was applied only to financial transactions related to organized crime. Today its definition is often expanded by government regulators (such as the United States Office of the Controller of the Currency) to encompass any financial transaction, which generates an asset or a value as the result of an illegal act, which may involve actions such as tax evasion or false accounting. The Money Laundering Control Act makes it a crime to launder proceeds of certain criminal offenses called "specified unlawful activities" (SUA), which are defined in Title 18, United States Code, 1956, 1957 and Title 18,United States Code, 1961, the Racketeer Influenced and Corrupt Organizations Act (RICO). There is an increase in money laundering activities as they relate to the area of financial institution fraud, access device fraud (credit card, telecommunications and computer investigations), food stamp fraud, and counterfeiting of U.S. currency.
Monitoring Software - Programs that allow a parent, caregiver or employer to monitor websites visited or email messages sent or read, without blocking access.
Netiquette - The informal rules of internet courtesy, enforced exclusively by other Internet users. See LAN.
Network - A group of two or more computers that is able to communicate with one another.
Nigerian Scam - Con artists pretend to be government officials, business people, or the surviving spouses of former honchos in Nigeria or other countries, whose money is somehow "tied up" for a limited time. They offer to transfer lots of money into your bank account in exchange for your willingness to pay a fee or "taxes" to help them access their funds. If you respond to the initial offer, you may receive documents that look "official." Then they ask you to send money to cover transaction and transfer costs and attorney's fees, as well as blank letterhead, your bank account numbers, or other information. They may even encourage you to travel to a foreign country to complete the transaction.
Online Profiling - Compiling information about consumers' preferences and interests by tracking their online movements and actions in order to create targeted ads.
Operating System - The main program that runs on a computer. An operating system allows other software to run and prevents unauthorized users from accessing the system. Major operating systems include UNIX, Windows, MacOS, and Linux.
Opt-in - When a user explicitly permits a website to collect, use, or share his or her information.
Opt-out - When a user expressly requests that his/her information not be collected, used and/or shared. Sometimes a user's failure to "opt-out" is interpreted as "opting in."
P2P, Peer-to-Peer - An informal network that allows users to share music, games, software, or other files with other users online. These P2P networks can be riddled with viruses and spyware.
Parental Controls - Tools that allow parents to prevent their children from accessing certain Internet content that they might deem inappropriate.
Personal Information – Often referred to as PII (Personal Identifiable Information) that can identify you, like your bank and credit card account numbers; your income; your Social Security number (SSN); or your name, address, and phone numbers.
Phishing - is the act of sending an email that is designed to trick the recipient into believing that it is from an established legitimate business, in an attempt to scam the recipient into providing personal information that will be used for identity theft. When the recipient clicks on links in the email, it sends the recipient to a website where they are asked to update personal information, such as passwords and credit card, social security, and bank account numbers, that the legitimate organization already has. These websites are fake and set up only to steal the recipient's information. For example, there have been phishing scams targeting Bank of America, Pay Pal and eBay. The eBay scam claimed that the user’s account was about to be suspended unless he clicked on the provided link and updated his credit card information.
Ponzi Scheme - A Ponzi scheme is closely related to a pyramid because it revolves around continuous recruiting, but in a Ponzi scheme the promoter generally has no product to sell and pays no commission to investors who recruit new "members." Instead, the promoter collects payments from a stream of people, promising them all the same high rate of return on a short-term investment. In the typical Ponzi scheme, there is no real investment opportunity, and the promoter just uses the money from new recruits to pay obligations owed to longer-standing members of the program. In English, there is an expression that nicely summarizes this scheme: It's called "stealing from Peter to pay Paul." In fact some law enforcement officers call Ponzi schemes "Peter-Paul" scams.
Promotions, also called Premiums - Premiums are gifts that companies make available to all recipients who respond according to the company’s instructions. For example, a travel bag received with a new magazine subscription. When everyone who responds to the offer receives the same gift item, without any element of chance, the offer is not a sweepstakes.
Pyramid Scheme - Pyramid schemes generally share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure. There are two telltale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. Inventory loading occurs when a company's incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. If this occurs throughout the company's distribution system, the people at the top of the pyramid reap substantial profits, even though little or no product moves to market. The people at the bottom make excessive payments for inventory that simply accumulates in their basements. A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.
Pop-up Messages or Ads - Unsolicited advertising that literally "pop up" on your computer screen or appear in their own browser window.
Router - A device that connects two or more networks – typically you have a router/modem combination to connect multiple computers at home to the internet. A router finds the best path for forwarding information across the networks. Common brands are Dlink, Airlink, Buffalo, and Linksys.
Scam - A confidence trick, confidence game (or con for short) is an attempt to intentionally mislead a person or persons (known as the mark or victim) usually with the goal of financial or other gain. The confidence trickster, con man, scam artist, con artist or scammer often works with an accomplice called the shill, who tries to encourage the mark by pretending to believe the trickster. ...
Scammer - one who creates or perpetrates scams
Social Networking Sites - Websites that allow users to build online profiles; share information, including personal information, photographs, blog entries, and music clips; and connect with other users, whether it be to find friends or land a job. Popular sites include Twitter, Facebook & Linked In.
Sock Puppet - A secret alias used by a member of an Internet community, but not acknowledged by that person.
Software - A computer program with instructions that enable the computer hardware to work. System software — such as Windows or MacOS — operate the machine itself, and applications software — such as spreadsheet or word processing programs — provide specific functionality.
Spam - Unsolicited commercial email, often sent in bulk quantities. Also see zombies, below.
Spammer - Someone who sends unsolicited commercial email, often in bulk quantities.
Spyware - A software program that may be installed on your computer without your consent to monitor your use, send pop-up ads, redirect your computer to certain websites, or record keystrokes, which could lead to identity theft.
Sweepstakes - a sweepstakes is an advertising or promotional device by which items of value (prizes) are awarded to participating consumers by chance, with no purchase or entry fee required to win and NO FEES or taxes to be paid prior to receiving the prize(s). If any purchase or payment is required to collect winnings, then, by definition, it cannot be a sweepstakes or promotion, but may be a lottery. It is not possible for an event to be both a lottery AND a sweepstakes.
Sweepstakes Scams - A sweepstake is technically a lottery in which the prize is financed through the tickets sold. In the United States the word has become associated with promotions where prizes are given away for free. In other words, they specifically do not require a purchase to enter (these are called prize draws in the United Kingdom). Sweepstakes sponsors are very careful to disassociate themselves from any suggestion that players must pay to enter, as this would bring them into conflict with lottery laws. The popularity of the term sweepstakes may derive from the Irish Sweepstakes, which was very popular throughout the world from the 1930s to the 1980s.
Sweepstakes typically involve aggressive enticements to enter a contest for fantastically large prizes like cars or large sums of money; there should be no cost to the entrant to enter for the prize, with the exception of possibly being placed on a promotional mailing list. Winners should also not be required to pay a fee of any type to receive their prize.
Among the commonly known sweepstakes in the United States are the American Family Publishers Sweepstakes (now defunct), Publisher's Clearing House and Reader's Digest Sweepstakes, each of which strongly persuade entrants to purchase magazine subscriptions by placing stickers on contest entry cardstock, while promising multi-million dollar winners who will be "announced on TV". The American Family Publishers sweepstakes traditionally used paid advertisements during NBC's The Tonight Show to announce its grand prize winners (for many years, its celebrity spokesman was Ed McMahon).
Telecommunications Fraud - Telecommunication fraud losses are estimated at more than a billion dollars annually. One of the largest "markets" for this type of fraud is the cloning of cellular telephones, a relatively simple procedure that can be done with the purchase of over-the-counter electronic equipment. When an individual transmits with a cellular telephone, the telephone emits a burst of electronic information. Within this burst of information is the electronic serial number (ESN), the mobile identification number (MIN) and other electronic identification signals, all of which can be illegally captured through the use of an ESN reader. Once captured, this information is transported through a computer onto microchips in the cellular telephones. These new telephones can be used for up to 30 days before the fraudulent charges are discovered. Cell telephones are being used extensively by organized criminal groups and drug cartels, as well as several Middle Eastern groups.
Trojans - Programs that, when installed on your computer, enable unauthorized people to access it and sometimes send spam from it.
Upload - To copy or send files or data from one computer to another.
URL - a website's address usually starts with "http://" or simply "www."
Virus - A program that can sneak onto your computer — often through an email attachment — and then replicate itself, quickly using up all available memory.
Wi-Fi Protected Access (WPA) - A security protocol developed to fix flaws in WEP. Encrypts data sent to and from wireless devices within a network.
Wired Equivalent Privacy (WEP) - A security protocol that encrypts data sent to and from wireless devices within a network. Not as strong as WPA encryption.
Wireless Network - A method of connecting a computer to other computers or to the Internet without linking them by cables.
Work-From Home Scams - Advertisements promise steady income for minimal labor — i.e. medical claims processing, envelope stuffing, craft assembly work, or other jobs. The ads use similar come-ons: Fast cash. Minimal work. No risk. And the advantage of working from home when it's convenient for you. The ads don't say you may have to work many hours without pay, or pay hidden costs to place newspaper ads, make photocopies, or buy supplies, software, or equipment to do the job. Once you put in your own time and money, you're likely to find promoters who refuse to pay you, claiming that your work isn't up to their "quality standards." The Federal Trade Commission reports that they have yet to find ANYONE who has gotten rich stuffing envelopes or assembling magnets at home, or other similar work-from-home schemes.
World Wide Web - An Internet system, which distributes graphical, hyper linked information through a browser.
Worm - A program that reproduces itself over a network and can use up your computer's resources and possibly shut your system down.
Zombies - Computers that have been taken over by spammers who then enlist them to send unsolicited email in a way that hides the spam’s true origin.