Swindle Internet Banking - Essay Example

Internet Banking Frauds By Introduction The implementation of internet technologies has become an essential activity of organizations. Since, the organizations now understand the value of internet. Now people want easy ways of accessing information, shopping, and banking. By seeing this extensive growth of the internet, now banks are offering enhanced services and facilities through internet. This process is known as internet banking. Internet banking offers a lot of benefits to the customers; however, there are a lot of issues also associated with the internet banking. Moreover, the cases of internet frauds and crimes are emerging day by day. This paper presents a detailed analysis of internet banking frauds. The aim of this research is to identify the nature of internet frauds and their impacts on the users. Internet banking sector is by no means an exception to internet mania. With the passage of time, the internet banking is becoming an exhortation. Since, internet banking means that account can be opened and maintained from home and even while sitting in your bedroom via a internet equipped PC or laptop. The global wave of information technologies (ITs) development and implementation has turned out to be a driving force in approximately every part of human undertaking. In this scenario, the internet that is a main element of this global wave has developed into a double-edged weapon offering a lot of openings and facilities for individuals and corporations (such as banks), however as well as bringing with it a significantly increased information security risk (Salifu). As the electronic methods of finance grows quickly all the way through the world, security and integrity concerns become sensitive. Moreover, at the present, the customer satisfaction and trust in Internet transactions and the security measures implemented by online financial services (banks) are recognized to be insignificant and possibly the major limit in the acceptance of internet banking services (Dandapani). Few years ago, information thieves were detected and arrested reaching and accessing the files of the U.S. Social Security Administration, getting secret prohibited records, and selling the information. Moreover, thieves have also broken the security of the computers of the various credit banks and retrieved credit and account information, which they have utilized for shopping otherwise sold to the interested people. However, internet banking is useful for the people but internet can also be used in negative ways, as a car can be employed to help do a criminal activity, in the same way a computer (internet, e-commerce software) can be used to perform various negative activities. In this scenario (Hutchinson and Sawyer) give an example of information theft and losses in result of those thefts. For instance, four students on New York’s Long Island who met via the internet utilized a special computer program to get credit-card numbers, after that they went on a one-year, $100,000 shopping trip, said by the police. They were arrested after one year, and charged with grand robbery, forgery, and conniving to deceive. Additionally, financial frauds have emerged to cyberspace. Since, a lot of people at the present make use of the internet banking or online services to run their stock portfolios through banks and brokerages hooked into the services. Scam artists can use internet for performing various negative activities such as presenting nonexistent investment deals, manipulating stock prices, and phony solicitation (Hutchinson and Sawyer 14.18). Usefulness and simplicity are the key reasons of why more and more people are adopting internet banking and avoiding traditional banking. Since, the use of online banking is increasing in USA, day by day. Thus, banks also like to offer the choice of internet banking for the reason that they can save on services expenditures. On the other hand, throughout the attractiveness of internet banking, almost 2 million U.S. citizens experienced deceptive bank activity in 2004. And this figure further increased in the next years. In addition, the customers outlined an average loss of $1, 200 for each bank fraud. Furthermore, a number of market researchers outlined that the ratio of frauds is increasing in internet banking (Spam Laws). There is another example of financial fraud in which a Russian hacker ruined into a Citibank electronic funds transfer system and stolen approximately $10 million by transferring this amount to various accounts throughout the world. After that, Citibank, which is one of the largest banks of the world and processes transactions of more than a trillion dollars per day, changed its security measures and implemented improved security procedures, asking clients to make use of electronic devices that generate new passwords very frequently (Turban, Leidner and McLean 690). In various cases, internet banking frauds look like conservative crimes (frauds) and they can come into the view in many forms. In mostly cases, the computer (bank server) can be the target of the crime. For instance, a criminal can steal the computer software or destroy it, or develop a virus to destroy data on server. In addition, the computer can be used as a source or tool of the attack, for producing a setting in which a fraud or crime can happen. For instance, fake or dirty data are inserted into a computer system (bank server) to deceive customers checking the account information on the bank’s system. Moreover, the criminals can use computers to intimidate or deceive. For example, an insurance broker stole more than $50 million by compelling his customers that he had a computer program which could be used to raise their profit on investment by 50 percent every month (Turban, Leidner and McLean 690). Internet banking frauds come under the paradigm of cybercrimes, which are the crimes done on the internet. In addition, these crimes can be done by outside individuals who infiltrate a computer system (frequently via communication lines) or by insiders (employees of the banks) who are allowed to access the computer system (bank server) but they mistreat their authorization. Following are the insiders and outsiders who can perform internet frauds (Turban, Leidner and McLean 690-697): Hacker: is an external individual who can access a computer system (bank server) for illegal intentions. Cracker: is a mean hacker, who can create huge troubles for an organization. Moreover, the crackers and Hackers can involve unsuspecting insiders in their crimes, this process is acknowledged as social engineering, in which computer criminals or banking people construct a bad trust affiliation with internal workers for the reason of attaining restricted information or unlawful access rights. Identity Theft: Identity theft is an increasing cybercrime issue, in which a person (can be acknowledged as identity thief) poses as someone else. Normally, these thieves steal passwords, account details, and credit card numbers, accessed from the internet, to perform fraud, for instance, to purchase products or use services that the target individual is required to pay for in a while. Moreover, the major loss to the person whose identity was stolen is to re-establish the stolen credit rating (Turban, Leidner and McLean 690-697). Additionally, a large number of people suffer with phishing, with e-mail messages that send-up, or imitate banks, credit card companies or other business like Amazon and eBay. However, these messages seem genuine and try to obtain victims to disclose their personal information. However, e-mail messages are simply one little part of a phishing scam (Wilson). In simple words, the Phishing is an e-mail fraud technique in which the criminal distributes legitimate-looking email in an effort to collect personal and financial information from target (TechTarget). There are following forms of internet crimes or frauds: (Turban, Leidner and McLean) Virus: It is most common form of crime in which the secret instructions are added into code (or data) that are unknowingly executed while performing normal activities on the system. Moreover, these secret instructions can remove or modify data, and spread inside or among computer systems. Worm: A program that copies itself and target to a suitable computer system. Additionally, it is distributed inside a network and on internet. Trojan horse: It is a prohibited program that is integrated inside another program that “sleeps” until some particular activity takes place that triggers the prohibited program to be activated and cause damage. Spoofing: Generating an e-mail address or web page that looks like similar to the bank’s web site, to deceive people to provide information or send money. Denial of services: In this type of crime, a criminal generates too many requests for service, which crashes the bank’s web site. Password cracker: A tool that generates passwords, it can be very accurate. Sniffer: It is some kind of program that searches for content or passwords in a packet of data as they navigate the internet. War dialing: These are the programs that repeatedly dial a lot of telephone numbers in an endeavor to recognize one established connection with a modem that can be used to break or access databases and systems. Recommendations As community bankers think about the range and rapidity of their internet facilities and strategies, a suitable risk management structure must also be implemented in order that strategy and technology may progress efficiently (Potter). To improve the security internet users should install firewalls in their systems. Since a firewall stops an illegal access to the system. In addition, the banks should implement higher security measures to uphold customers trust. Moreover, the access to the bank’s systems should be limited to the authorized workers. Conclusion This paper has presented a detailed analysis of the internet banking frauds. Internet banking has become a routine activity of almost every person. In addition, the increasing ratio of internet frauds cannot reduce the value of internet banking however it can gain mores customers’ trust by decreasing the ratio of internet banking frauds. This paper has discussed various cases and examples to show the nature if internet banking frauds. This paper has also offered the ways to minimize the frauds. I hope this paper will offer a deep insight into the internet banking frauds. Bibliography Dandapani, Krishnan. "Growth of e-financial services." Managerial Finance Volume 34, Issue 6 (2008): 361-364. Hutchinson, Sarah E. and Stacey C. Sawyer. Computers, Communications, Information A users introduction, 7th Edition. New York: Irwin/McGraw-Hill, 2000. Potter, Mike. "Internet Banking & Fraud: Making Business Less Risky." Community Banker Volume 9, Issue 7 (2000): 42. Salifu, Adam. "The impact of internet crime on development." Journal of Financial Crime, Volume 15, Issue 4 (2008): 432-443. Spam Laws. Internet Banking Fraud: Why is Online Banking so Popular? . 2009. 14 April 2010 . TechTarget. Phishing. 08 October 2009. 14 April 2010 . Turban, Efraim, et al. Information Technology for Management: Transforming Organizations in the Digital Economy . New York: Wiley, 2005. Wilson, Tracy V. How Phishing Works. 23 November 2005. 13 April 2010 . Read More