Fraud Ring Overview
It's common for people to hear about fraudulent acts in the news. These acts are usually committed by individuals or celebrities who attempt to defraud their clients, family members or the government. You also hear about organized crime groups that deal in drugs or human trafficking. In the past, you rarely heard about fraud rings, but today, you hear more about this growing problem
What Are Fraud Rings?
Due to the Internet's popularity, there are many rings that involve cyber crimes, such as identity theft and hacking. The rates of online fraud have increased dramatically. It's easier to defraud people over the Internet than in person or through the mail.
A fraud ring can consist of 10 criminals or tens of thousands of them. Most rings are devoting to committing specific types of fraud. Some rings are devoted to committing fraud against ecommerce websites, while others are devoted to defrauding charities, businesses or government agencies.
Types of Fraud Committed by Fraud Rings
Fraud occurs in any activity that involves the exchange of money. There are different types of fraud that include:
- Identity theft
- Mail fraud
- Tax fraud
Internet fraud is a new trend that makes up a significant portion of fraud overall. Millions of consumers are filling out online forms that require them to submit their personal information, such as credit card numbers, Social Security numbers, street addresses, etc. Identity theft is the most popular type of Internet fraud.
People are more likely to commit fraud online because they're less likely to get caught. It's possible to use special software to hide an IP address. Hacking is designed to infiltrate websites to steal personal information. Hackers are continuously discovering new ways to exploit vulnerabilities using worms, viruses, spyware or Trojan horses. For this reason, computer users are regularly advised to buy new versions of antivirus software.
Methods Used by Fraud Rings
There are many known cases of rings that have carried out insurance fraud. One type of ring involves staging traffic accidents to file false claims and collect money from auto insurance providers. Fraudsters exaggerate claims by causing injuries or vehicular damages that were not caused by the accident.
Bank fraud rings consist of multiple criminals who perform various tricks to steal from financial institutions. They may steal large quantities of checks and forge signatures, complete false loan applications or use stolen credit card numbers. Many identity thieves steal personal information to apply for bank accounts or debit cards.
Protections Against Fraud Rings
There are numerous methods of detecting and preventing the activities of fraud organizations. Verifying personal information is one way to detect fraud. Verifying a person's identity by asking for a photo ID or Social Security number is another detection technique. This prevents people from opening bank accounts or receiving credit cards in other people's names.
Individuals buy antivirus software to avoid having malware installed on their computers. Owners of e-commerce websites use encryption tools to prevent hackers from viewing personal accounts. They work with companies that prevent fraud as online financial transactions are being made.
Business owners conduct audits regularly to check for fraudulent activities. They hire accountants to check if the numbers add up and if any money is missing from accounts. They take note of new, unusual activities from their employees that could indicate theft or embezzlement.
All business owners and website owners should be aware of fraud rings. International rings may consist of thousands of experienced identity thieves from a dozen different countries. Some local fraud rings consist of a small group of individuals. A fraud ring can do more financial and psychological damage than any individual fraudster ever will. Make the effort to prevent this type of fraud from affecting your business.
Ready for the next step?
Fraud Detection & Prevention
Spot user behaviors and device information that’s suspicious, and stop those fraudsters in real time. We track billions of devices and our fraud analysts add evidence to make this intelligence even more effective.
See More Resources