Archive for the ‘Dating fraud’ Category

“It” refers to data. Data Privacy Day, scheduled for January 28, is about keeping data to yourself and out of the hands of cybercriminals.  This annual international celebration is designed to promote awareness about privacy and education about privacy best practices. Official sponsors for Data Privacy Day are EBay and Intel, who are joined by a host of partners including Microsoft, Intuit, Comcast, MasterCard, AT&T, Facebook, Google, the International Association of Privacy Professionals, the State of West Virginia and….

Did we leave anybody out? Probably. But it’s a long list because Data Privacy Day is an excellent cause. Without it, literally the financial, social and political structure of society is at risk. HOLD ON. Just remembered somebody we left out —ThreatMetrix™.  ThreatMetrix strongly supports Data Privacy Day.

“We have entered a world of unprecedented identity theft and surveillance for monetary gain,” said Alisdair Faulkner, chief products officer, ThreatMetrix. “Every site we visit, everything we search for, to everything we now do, buy and share online is tracked by a growing number of powerful players. Unfortunately the evidence suggests that no data is unreachable or un-exploitable by adversaries or advertisers. Whether it be due to data breaches, phishing attacks or over-sharing, the implication is that identity can no longer be relied-on to authenticate a customer online. The distribution of our identities across the net not only threatens our privacy but also makes us all preposterously easy to impersonate.”

We  should all be concerned about data security being at risk in today’s cybercrime infested environment. And the list of companies and institutions that have had data compromised continues to grow at an alarming rate. From the criminals’ perspective, it just makes good sense. Why try knocking over a bank with a gun and a good chance of getting caught or killed when you can sit back on a beach six time zones away and with your trusty laptop steal more money in one day than bank robbers Willie Sutton, John Dillinger and Baby Face Nelson and Bonnie and Clyde did in their whole lives?
Just a cursory glance at the number and types of recent breaches that compromised personal data from finance to health records and employment histories underscores the importance of calling attention to this Pandora’s Box.

• Facebook (Social Networks): A computer worm stole 45,000 login credentials from Facebook accounts in the UK and France.

• Yale University (Academic Institutions): 43,000 Yale University faculty, staff, students and alumni names and Social Security numbers were made public via Google because a File Transfer Protocol (FTP) where data was stored became searchable.

• Cyworld (Online Gaming): 35-million records including phone numbers, email addresses, names and encrypted information about the sites’ members were taken from South Korea’s largest social networking site, Cyworld.

• PBS (Communities): Thousands of user names and passwords were compromised when a PBS Website was hacked.

• Patco Construction (Online Banking): $300,000 was stolen from Patco Construction Company’s online bank account when hackers gained access to the company’s account credentials by sending employees email with Zeus, a password stealing trojan, that infected the company’s computers.

• Citbank (Financial Services): 360,000 Citibank customers (originally Citibank said it was 210,000 customers) had their account numbers and contact information stolen by hackers.

• Pittsford, N.Y. (Government): $139,000 was stolen from the hamlet of Pittsford, a town of 25,000 near Rochester, N.Y. when cyberthieves logged onto the town’s online commercial bank account. Initiating a small batch of automated clearing house (ACH) transfers, the thieves covering their tracks by sending the transfers to “money mules” around the country.

• Comerica Bank (Banking): $560,000 of Experi-Metal Inc. (EMI) hard-earned cash slipped away when Comerica Bank let fraudsters waltz away with it.

• Sony PlayStation (Online Gaming): 70-million Sony customers were put at risk when hackers broke into Sony’s PlayStation Network (PSN) and stole credit card details. The security breech caused Sony to take down the network for “maintenance.” Subsequently, 93,000 Sony customer accounts were hacked in a separate incident. Sony believed those customers used the same Sony login credentials to logon to other sites and that the other sites were hacked, providing access to the customers’ PII (personally identifiable information).

• Sega (Online Gaming): 1.3 million users had personal information put at risk by a Sega online network breach causing the company to temporarily shut down its online network.

• Washington Post (Media): Either 1.27 million, 1.3 million or 1.6 million user IDs and email addresses were ripped off from the Washington Post’s job section.

• Pentagon (Government): 24,000 military files were stolen from a defense contractor doing business with the Pentagon in a cyberattack. On a side note, the Pentagon is now consider cyberattacks as an act of war.

• Zappos (E-Commerce): 24 million customers’ personal information was put at risk when Zappos, the online shoe outlet owned by Amazon, was hacked.

• Toshiba (Computer Manufacturing): 7,520 Toshiba customers’ email addresses, telephone numbers and passwords were stolen by cybercriminals.

• NATO (Government/Military): A Gigabyte of NATO data was stolen by Anonymous which had accessed NATO servers.

• FTC (Government): More than 18,000 cases of child identity theft were reported to the Federal Trade Commission. Children’s identities provide the kind of clean backgrounds that make it possible for thieves to create entire fictional credit histories. Often the theft is not found until the person turns 18 and starts college or looks for a job.

• Credit Card Fraud: Restaurant workers, bank tellers and other service employees skimmed, swiped and scammed millions of dollars worth of personal credit information from thousands of American and European consumers. The cost to victims, financial institutions and retail business?  More than $13 million over a 16-month period.

• RSA (Security): After a junior employee at security firm RSA fell prey to a run-of-the-mill phishing attack, hackers were able to make their way into the company’s network and hack into its SecurID servers. The attack compromised RSA tokens requiring users to enter a unique number generated by the token each time they connected to their networks. Facebook, Amazon, Abbot Laboratories, Charles Schwab, Microsoft — In all 20% of the Fortune 100 had been compromised.

• Online Advertising: An East European cybergang hijacked at least four million computers in over 100 countries. Included in the half-million hijacked computers in the United States were some at NASA.  Using these computers, the gang stole $14 million in four years with a PPC and ad scheme based on redirecting traffic and replacing genuine ads with their own.

• Steam (Online Video Game Distribution): In a major hack, 35 million user accounts at Steam, one of the world’s largest distribution networks for online video games, may have been compromised exposing credit card details and billing addresses.

• Stratfor Global Intelligence Service (Security): Stratfor Global Intelligence Service, a company which helps clients with security and is famous for its secrecy and its top-secret client list was hacked resulting in names, emails, credit card details, passwords and home addresses for some 4,000 people being compromised. Additionally, this information was used to have clients involuntarily donate to charity to the tune of a million bucks.  The hackers also said they had details for more than 90,000 credit card accounts.

• San Francisco City College (Education): For more than a decade San Francisco City College servers have been stealing personal banking information and other data from thousands, or even tens of thousands, of students, faculty and administrators in what the San Francisco Chronicle refers to as “an infestation” of computer viruses with origins in criminal networks in Russia, China et al.

• South Africa’s Postbank (Government): $6.7 million was stolen from South Africa’s Postbank when cyberthieves accessed a computer from a remote location and hacked into Postbank’s server system using stolen login details for a Postbank teller and a call-center agent.

• Epsilon (Email Marketing Services): Epsilon, a large email marketing services company, reported a data breach that could affect the email addresses of thousands of customers of major banks, retail and hotel chains. This impacted financial services institutions such as Capital One, US Bank, JPMorgan Chase, Citi and Barclays Bank of Delaware. However, the only Barclays Bank of Delaware customers affected were the ones who have an LL Bean VISA card. In addition to the banks, other impacted companies included hotel brands Ritz-Carlton Rewards and Marriott Rewards, and retail heavyweights Home Shopping Network, Walgreens, Brookstone, New York & Company and Kroger. TiVo is also included in this list.

• WordPress.com (Blogs): WordPress.com, which hosts more than 19 million blogs, had its servers compromised and sensitive data taken.

• The State of Texas (Government): 3.5 million Texans had their names and Social Security numbers (and in some cases their dates of birth and driver’s license numbers publicly posted in a data breach at the Texas state comptroller’s office.

• International Monetary Fund (Banking/Government): Damage still not assessed or admitted to by the International Monetary Fund which fell victim to a large and sophisticated cyberattack that led the IMF to cut the link that allowed it and the World Bank to share confidential information.

Keep it to yourself. Protect your data with ThreatMetrix solutions. Without relying on passwords, user names and cookies to protect its clients, the ThreatMetrix™ Cybercrime Defender Platform uses anonymous data from the computer, its connection to the Internet and contextual data from a transaction to sniff out cybercriminals. The ThreatMetrix Cybercrime Defender Platform is the first industry solution that integrates sophisticated malware detection and advanced device identification technologies in a single, unified platform. This unified approach to cybersecurity is a game changer. By integrating malware detection and device identification with shared, centralized intelligence, ThreatMetrix delivers the unique ability to protect the integrity of entire online transactions.

The lady was looking for love in all the wrong places and found it—  to the tune of $500,000. Heard this story before? Or a similar one? Scratching your head as to how somebody could be so gullible?

According to an ABC report, the fifty-five year old woman, who’d been recently widowed, found her perfect match online.  He was Army Major General Wayne Jackson, who’d only gone online himself seeking love and companionship at the insistence of his sister.

Soon it was clear this was a match destined to end in “happily ever after.”  So why not lend Wayne a few hundred to help his son?  Then, how about a few thousand to open a business they could run together?  After all, you can’t make love 24/7.

You can see where this is going so let’s cut to the chase. The lovelorn lady cleaned out her personal savings, her husband’s life insurance and 401K. When she ran out of cash, she took out loans. It was only when she sent her online companion money for a plane ticket to come see her in Castle Rock, Colorado, and Major General Wayne Jackson never showed up, that she realized she was the victim of a scam. Wiser. But $500,000 poorer.

“I could just kick myself,” Esther Ortiz-Rodeghero said, leafing through a stack of wire transfer receipts. “I will never, ever, give another man another dime. This dating website thing is not for me.”

Maybe online dating would’ve been for her if she’d used a site protected by ThreatMetrix. “The online dating and matching market is under attack from the predatory practices of online scammers,” said Reed Taussig, president and CEO, ThreatMetrix. “ThreatMetrix provides a systematic and reliable way to identify fraudsters and make sure that once identified, they can’t return to their dating sites.”

“We were struggling with handling online fraud as we were always in reactive mode, dealing with relentless repeat fraudsters,” said Samuel Bates, co-founder and CTO at Chellaul Corporation, a leader in niche dating sites. “With ThreatMetrix, we are now able to proactively deal with repeat fraudsters, without seriously disrupting the customer experience. What makes ThreatMetrix fraud prevention solutions so special is that we’re able to nab a higher percentage of fraudsters without compromising customer safety, privacy, or the integrity of communications with other members. The reality is, consumers have many choices when it comes to which dating sites they use. The key to keeping users coming back is providing a smooth and secure customer experience – and that’s what ThreatMetrix is helping us to deliver.”

“Our members’ privacy, safety, and security is a top priority,” said Doron Kim, president and founder of EDating for Free, Inc., parent company of Christian Dating for Free, Catholic Dating for Free, and Black Christian Dating for Free. “With ThreatMetrix, we can see the bad guys right away. Now we see the true data, true city, true IP, and true ISP. In less than five seconds, we can determine if a user who claims that they are in Boston is actually using an IP in Lagos.” ThreatMetrix device identification solutions profile the computers used in online transactions to determine which customers are legitimate and which are fraudsters. ThreatMetrix data is integrated to a Christian Dating for Free home-grown dashboard so that their staff can quickly and easily review registrant data to determine whether or not to block or take action upon a user.

CEO of EDating For Free, Inc., David Perez says, “We typically process over 350 new registrations a day. We’ve significantly reduced the number of scammers that gain access to our site’s functionality while reducing the time spent determining who to register or deny to less than 30 seconds. ThreatMetrix is a ‘no-brainer’ for dating sites like ours. It has made our site a safer, better protected community while enhancing the user experience.”

In online dating, what (or whom) you see is not always what you get. Long before online dating, stories of con men and women preying on people seeking companionship have been the grist of crime dramas and real-life tragedy. You don’t have to strain your memory much to remember actor Robert Blake’s trial for the murder of his wife, Bonny Lee Bakley a few years ago.

At the trial, the defense successfully contended that Blake was only one of scores of men who wanted her killed for having scammed them. Her modus operandi was pretty much the same as today’s online cyber criminals. She would place an ad in a magazine or newspaper along with her picture, then begin a correspondence with the men who answered her ad. Once she’d formed a relationship through letters, she’d ask for money for airplane tickets to see her marks, or she’d come up with a story about needing money for a surgical procedure, or for a lawyer to finalize her divorce or to start a business – whatever she thought it would take to get men to send her money.

According to a recent Wall Street Journal article, the FBI says it receives thousands of complaints a year from people who have been swindled by those they’ve met on dating sites. While the online dating industry claims scammers are a small fraction of all profiles submitted to their sites, Mark Brooks, an industry consultant who’s worked with Cupid and PlentyofFish concedes that, “Scammers are aggressive.”

FBI Cyber Division section chief, Tim Gallagher, says most scams are run from abroad, especially West Africa and the former Soviet republics. Typically, the scammer creates a fake profile using photos of an attractive individual often copied from a social-networking site. Showing far less creativity than Bonny Lee Bakley, the written part of the profile is generally copied verbatim from a real profile or recycled template.

With varying degrees of success and effort, online dating sites have attempted to stop the criminals. IvyDate.com and DateHarvardsq.com have a membership committee that reviews every profile and photo submitted to check for grammar, spelling and other inconsistencies that might suggest they could be the work of an overseas scammer unfamiliar with English. Hmmm. What if the scammer were an American?

Global Personals, the British owner of U.S. sites including Texasdating.com and Theseniordatingagency.com, says it has a person check every photo, profile and message. The company says it gets 8,000 new members a day of which about a dozen are scammers whose profiles it pulls down immediately.

On Iloveyouraccent.com, members can opt to pay for a background check of anyone on the site.

Match.com warns users about anyone who claims to be recently widowed or an American working overseas, or who quickly asks to communicate on an outside email or messaging system.

Christian Dating for Free (www.christiandatingforfree.com), the largest 100% free Christian dating site on the Web, with 15 million page views per month, 800,000 visits and a customer database of over 120,000 users, uses ThreatMetrix to control online fraud and abuse.

Doron Kim, president and founder of EDating for Free, Inc., parent company of Christian Dating for Free, Catholic Dating for Free, and Black Christian Dating for Free chose ThreatMetrix as the first line of defense because, “with ThreatMetrix, we can see the bad guys right away. We see the true data, true city, true IP, and true ISP. In less than five seconds, we can determine if a user who claims that they are in Boston is actually using an IP in Lagos.”

ThreatMetrix device identification solutions profile the computers used in online transactions to determine which customers are legitimate and which are scammers. ThreatMetrix data is integrated into the Christian Dating for Free home-grown dashboard so that the staff can quickly and easily review registrant data to determine whether or not to block or take action upon a user.

David Perez, CEO of EDating For Free, Inc., added, “We’ve significantly reduced the number of scammers that gain access to our site’s functionality while reducing the time spent determining who to register or deny to less than 30 seconds. ThreatMetrix is a ‘no-brainer’ for dating sites like ours. It has made our site a safer, better protected community while enhancing the user experience.”

Explorer 9 and Firefox 4 upgrades permit users to prevent sites from using cookies to track their movements. But, to delete Adobe Flash local shared objects (LSOs) or cookies, users had to go to the Adobe Flash Website.

Now Google Chrome, which is bundled with Flash, makes clearing Flash cookies as easy as…well…pie. All it takes is a few clicks from within the browser and no LSOs. That may be great for user privacy, but it’s hell and dollars to pay for online merchants, banks and social networks, all of whom depend on cookies stopping fraudsters. In fact, today, banking on cookies detecting fraudsters has about as much chance of success as Osama Bin Laden’s relying on messengers.

So what do “smart cookies” do when cookies don’t work?  They turn to ThreatMetrix SmartID™ which detects fraudsters even if they’ve wiped their cookies. Without cookies or cookie equivalents, ThreatMetrix SmartID enables companies to stop online fraud, and, at the same time, protect customer privacy.

Findings from the recent AWPG report reveal that fraud remains a serious issue in the credit card/payments information category. This is often downplayed to account for rises in cases of smaller categories such as Classified Advertising and Banking. These categories, however, only account for less than 10% of all phishing cases. Statistics show that more than one-third of phishing attempts to steal credentials are directed at collecting credit card/payments information, making this the largest category affected by fraudsters.

One reason this issue may not seem as relevant might be the decrease in brand attacks since 2009. It is important to keep in mind, however, that while the number of brands hijacked by phishing attacks is down 22% from October 2009, fraudsters are finding unique ways to target specific brands through personalized phishing attempts that make these efforts more difficult to track.

According to ThreatMetrix Chief Product Officer Alisdair Faulkner in a recent Security Week article, the attacks on the credit card/payment information category may be decreasing, but continue to affect the largest number of people: “‘Unfortunately the pain is not just felt by the brands targeted by phishing attacks, it is every other online business that is then attacked with the stolen identity and credit card information,’” he said.

Within a period of 24 hours (from Feb. 1 – Feb. 2) ThreatMetrix detected 135,000 fraudulent transactions attempted against 350 of the top online companies, data we pulled for Security Week.

Stolen consumer information continues to be a serious issue. It is essential that innovative efforts continue to block fraudsters before they have the opportunity to cause significant damage. Statistics like those gathered from the AWPG report illustrate the rapid pace the fraud protection industry needs to move in order to maintain a solid approach to fraud prevention.

I am blogging this while standing at the ThreatMetrix booth on the last day of iDate 2010 Miami Beach.  The online dating world is an interesting industry – a global industry comprised of many interconnected pieces.  The online dating world has all the essential ingredients to make a great story:  love, sex, money and crime commingling at Internet speed.  Human desire is the engine that drives the online dating world, and online ads and money are the lubricant.  Where you find love, sex and money you’re going to find fraudsters.

There is a dating site for just about any kind of whatever-it-is that attracts people to one another that you can imagine – and some that you probably can’t.  In fact anyone can start their own niche dating site—yes you too can use a web dating application platform to build your own niche dating site that caters to whatever crowd hasn’t been sliced off into a niche dating site yet.  How about a dating site for dating site scammers…or perhaps something narrower like a dating site for dating site scammers who read Shakespeare?  Web dating has a tribal quality to it that helps makes it all work.  Of course scammers have figured out that hope springs eternal on dating sites where there’s an endless supply of people, many of whom will fall for their scams.

Most dating sites are aware of the scammer element to the business and the risk they pose to their members and their brand.  Scammers are their arch nemesis; I spoke to a few at iDate who described scammers in very personal terms—they really want to nail them—it’s personal. The larger the membership, the more the business has to invest in people and technology to try and keep the creeps away from their customers.  It’s not unusual to hear of a large dating site with 10 or more full time fraud analysts dedicated to staying ahead of the scammers.  Device identification has become more common in the online dating and social networking world.  The ability to bypass a hidden proxy to get the true IP address and IP geolocation in real time of the computers visiting a website is one of the most effective ways to spot a scammer on a dating site (just ask our customers).

Dating sites are susceptible to all three types of fraud: account origination (new member fraud), login fraud and payment fraud (CNP, or card not present). The ability to conveniently and securely accept web payments and avoid chargebacks is critical to the online dating business.  Payment processors and alternative payment services are a key part of making it all work.

And what’s next big thing in online dating?  Mobile of course.  When I asked conference attendees what their big takeaway was from the conference, anything to do with mobile was top of mind.  One person explained that mobile is hot to online dating “because it gives people a way to react instantly any time and anywhere…they don’t have to limit themselves to the time they’re tethered to their computers.”

The brave new world of online dating gives new meaning to the old proverb love is blind: when anyone can be someone else online, how can you be sure that lovesyababy422 in Miami is the hotty she claims to be flirting with you—or an offshore scammer named Gromyko setting you up?

- Tom

The online dating world will converge in Miami in a few weeks at the annual iDate 2010 conference billed as “the largest industry gathering of the year” that covers all business aspects of the dating and social networking markets.   ThreatMetrix will be exhibiting at iDate in booth #506, if you’re attending the conference let us know and we can set up a time to meet.

Online dating and matchmaking is over a $1.1 billion dollar industry in the U.S. alone, according to IBISWorld (www.ibisworld.com), the world’s largest independent publisher of U.S. industry research. The heightened awareness in the online dating world around scams and scammers is likely to push the topic into the sessions and conversations at iDate.  ThreatMetrix helps dating sites identify and stop online dating scammers.  Dave Perez, CEO of EDating for Free—a ThreatMetrix customer—underscores the importance of fraud prevention for his online dating sites this way: “We typically process over 350 new registrations a day.  We’ve significantly reduced the number of scammers that gain access to our site’s functionality while reducing the time spent determining who to register or deny to less than 30 seconds.  ThreatMetrix is a ‘no-brainer’ for dating sites like ours. It has made our site a safer, better protected community while enhancing the user experience.”

Online dating companies – like any other online community or subscription site – are subject to fraudsters around the world. In the case of Christian Dating for Free, one scenario involved overseas fraudsters from Nigeria who pretended to be located in the U.S. and then attempted to extract money using a money order scam.  After establishing the confidence of another community user, the overseas fraudster would send a fake money order and ask the U.S.-based user to deposit it into their bank account and wire money back to them in Nigeria via Western Union. Unfortunately, in most instances the money order turned out to be fraudulent and the user was responsible for paying back the money to their bank.

Once a scammer is tagged by ThreatMetrix, they do not receive a confirmation email on their next registration attempt. ThreatMetrix data is integrated to a Christian Dating for Free home grown dashboard so that their staff can quickly and easily review registrant data to determine whether or not to block a user.

Doron Kim, president and founder of Edating for Free, Inc., parent company of Christian Dating for Free, Catholic Dating for Free, and Black Christian Dating for Free explains that “With ThreatMetrix, we can see the bad guys right away.  Now we see the true data, true city, true IP, and true ISP. In less than five seconds, we can determine if a user who claims that they are in Boston is actually using an IP in Lagos.”

Trust is the bedrock on which online dating services are built. Members must trust one another and they must trust their dating sites to do their best to protect them from scammers. Nobody wants their mystery date to be a dud—let alone a scammer.

David Evans, a dating industry expert who publishes the Online Dating Insider has some great pre-conference tips for the Internet Dating conference that I recommend you check out if you’re headed to iDate 2010 in Miami.

- Tom

Thankfully our comic strip illustrator Andy Warner returned from an extended break with a new episode in our ongoing cartoon series starring  two online fraudsters Gromyko and Natasha. Every comic tells a different story of web fraud through the schemes of these two determined cyber criminals.

The latest installment is based on the very real challenge of online dating fraud that exposes millions of consumers around the world to scammers trolling dating sites using love to mask their true intent. Here it is:

If you want to learn more about online dating scams check out this earlier blog entry Fraudster seeks SWF with loaded bank account willing to be duped then read how Chellaul uses ThreatMetrix to keep the scammers out of their dating network.

You can read all the ThreatMetrix comic installments here.

- Tom

“Will your mystery date be a dream…or a dud?” That was a line I remember from a commercial for a board game called Mystery Date that was popular in the late sixties. I remember my sister playing the game with her friends, each trying to assemble the perfect matching outfit for a shot at a “dream date.” Forty years ago game maker Milton Bradley’s idea of a dream date was bowling, skiing, beach or a formal dance. Now with online dating the norm, a dream date would mean your mystery date isn’t a fraud trying to fool you into sending them money.

Trust is the bedrock on which online dating services are built. If members start to feel unsafe in the dating pool then they’ll opt out or try a different service. Online dating services understand this dynamic and some go to great lengths to try and keep the criminal element out. These are often sophisticated criminals working from offshore. CTO and co-founder of Date.com Chris Covino told Inc. Magazine that they “found many crime rings employed multiple teams that focused on different parts of a fraud operation. Read the rest of this entry »