Why Aren’t Governments Doing More To Combat Online Fraud?
Internet scams are several types of fraud made possible by thieves via the internet. Scams can take many forms, including phishing emails, social media, text messages on your phone, phony tech support calls, scareware, and more. Credit card theft, obtaining customer login and password details, and even identity theft are all common goals of these types of scams. Scams on the internet are always changing. In 2019, the FBI reported a total loss of $3.5 billion due to cyber crimes, which is a new high. Con artists are most likely targeting a computer or mobile device near you right now. Here are some of the most prevalent internet frauds and what you can do to protect your data and pocketbook.
It is common knowledge that before you pull your credit card out of your wallet and provide billing information online, you need to be certain you are not dealing with crooks. You also look for some sign of security assurance on a website before clicking on the ‘pay’ button. That’s something you probably wouldn’t do before handing your credit card over to the cashier at the department store or the supermarket. Have you ever wondered why? The main reason for the lower levels of trust in online shopping, contrary to belief, isn’t security breaches. Just like hackers can steal information from a website, they can probably do the same from the computer at the store. In fact, most people are reluctant to provide billing information online because they are afraid of no other than the seller. They are afraid that they will have nowhere to turn if they get cheated.
Think about it – if you buy a bad pair of earphones at the electronics store, you know you can always go there physically and demand a refund. However, there’s more to it than just that. A lot of people feel there is no control over what happens on the world wide web, that the authorities don’t really take action against dishonest websites and portals. Let’s try to understand why.
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The biggest problem governments have with internet scammers lies in the argument regarding the authority of any official body to act against them. Can the American government, for example, take action against a website that has stolen money from Americans but operates from Chile? Does the USA need to turn to the Chilean authorities for help? Sure, there are international cyber protection bodies, but it seems like they lack the tools to do anything against these scams since the governments themselves can’t reach an agreement that will enable them to really act. Be sure that if these crooks even have an official location where they operate, it’s a place where regulation is very, very lax.
The internet crooks know what they’re doing; you can be sure of that. They will most likely do anything they can to make tracking them down nearly impossible. They also gear up with the best lawyers possible, so if you do manage to get hold of them and drag them to court, you’re in for a really unpleasant experience. Take forex trading scams, for example. The minds behind these frauds are clever; they operate from different locations but list themselves in countries where they know it would be hard to bring them to justice. They call you from unlisted numbers; they switch emails constantly, they have several billing addresses, and so on. That makes serving them a lawsuit very hard – but not impossible, as you will see if you keep reading.
A Blinding Eye?
Keeping in mind the jurisdiction problems and the sophistication of the crooks, it’s clear why governments find it hard to operate against the online scammers – hard, but not necessarily impossible. If countries really wanted to, they could form a mechanism that effectively tracks down the scammers and makes them pay for their deeds. Sadly, there just isn’t enough motivation for that, and sometimes ego and politics are what prevent effective action. In other words, governments prefer to look away rather than take action, which requires putting politics aside and joining hands, nationally and internationally. That is certainly something that the scammers are aware of – and take advantage of.
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All Isn’t Lost
As we’ve seen, authorities and institutions aren’t giving online scams a good fight back. That does not mean, though, that all is lost for victims. Where governments aren’t acting, private companies are filling the gap. We at The Global Payback specialize in finding the masterminds behind the manipulations that make people lose their money and make them pay. This work demands technological and legal tools combined. Sadly, sometimes shedding light on the hole that the thieves are hiding in isn’t enough, and legal action is unavoidable. That’s also part of the service we offer, though, and the nearly $10M we’ve already managed to recover can attest to that. If you’re in this situation and you don’t know what to do, give us a call. We may just be able to help you retrieve your money (or at least a significant portion of it). Because scams are continuously evolving to discover new ways to target victims, there will never be a point where we can say goodbye to scams for good, no matter how hard the government and industry try.
This isn’t a result of a lack of effort. The government has now caved in to business pressure and added paid advertisements to the ambit of the online safety bill.
In practice, this means that social media sites and search engines will be required by law to prevent paid-for fraudulent advertisements from appearing on their platforms. This is in the hopes of reducing the number of people who are conned using this strategy. While any effort to combat scams is commendable, the term “closing the stable door after the horse has bolted” comes to mind. The administration appears determined that scamming is not a crime that should be taken seriously. If the government is unable to change this mindset, policies and procedures to prevent scams will be enacted after it is too late, and too many people have lost hundreds of thousands of pounds to con artists. The situation is deteriorating. More than £30 million was lost to pension scammers between 2017 and August 2020, according to data, but this is only the tip of the iceberg because many cases of fraud go undetected.
Scammers are adapting while the government takes a back seat on this issue. Pre-paid ads being included in regulation may act as a deterrent to scammers, but they will simply find another way to get around it. The pensions cold-calling prohibition in 2019 is an example of this. Fraudsters were no longer allowed to call people about their pensions in an attempt to persuade them to part with their money, so they turned to the internet, which is sure to happen again. The harshness of enforcement action against offenders will determine the new measures’ success. We are unsure as to how this will play out just yet, but it’s probable that only large fines and possibly prison time will be enough to dissuade spammers.
While it is necessary to target fraudsters, more should be done to educate the general public.
Even as a financial journalist, I’ve come close to falling for their ruses because it’s impossible to identify the difference between a scam message and real communication. This is what I believe we should focus on first: removing the perceived humiliation of being duped by a con artist. If we can accomplish this, more frauds will be reported, strategies for defrauding individuals will be found, and the government will be able to take action sooner rather than later. Stopping fraud does not have a one-size-fits-all approach. Consumers, suppliers, advisers, website operators, and legislators must all collaborate.
Will we ever reach a moment where there are no more scams? Unfortunately, I don’t believe so. However, anything that can be done to prevent as many people as possible from being victims of a hoax should be publicized.
Here Are 7 Ways That Government Agencies Should Take To Combat Fraud
1. Start with a good tone
Writing a code of conduct is an excellent method for governing bodies and upper management to establish an accountability culture. This code should explicitly establish the company’s perspective on corporate ethics, clarify what constitutes fraud, and explain the repercussions. The code can be as short as a three-sentence declaration that outlines how the government complies with statutory duties and interacts with employees, vendors, and constituents internally and externally. Many examples may be found online to help you draught your own code.
2. Put in place internal controls
Internal controls aid in the safeguarding of assets, the appropriate recording of transactions, and the achievement of the organization’s goals and objectives, including regulatory compliance. The following are the top three internal controls to concentrate on:
- Separate responsibilities. Separate the recordkeeping and asset physical custody responsibilities.
- Keep an eye on who has access. Monitor employee access to recordkeeping systems to ensure that duties are truly segregated as anticipated.
- A review of management. Perform meaningful reviews of nonstandard journal entries, details of reconciliations, transaction records, and monthly financial information, as well as access and exception logs.
3. Set up a hotline for reporting fraud/partner with recovery agencies
It’s crucial for fraud prevention and detection to be able to inform employees, clients, contractors, service providers, and other third parties that you have a hotline. Assuring that reports can be made without fear of retaliation is an important aspect of a hotline. There should also be a proper process in place for handling tips so that each one is thoroughly investigated and resolved in a consistent manner. This aids the government’s defense in the event of a lawsuit. In general, hotlines are cost-effective. There is normally a small monthly hosting price beyond the initial setup fee. One of the advantages of using the hotline is that you will receive customized monthly reports to assist you in identifying trends.
4. Employees that are ethical are hired, promoted, and trained
Conduct background checks on potential candidates, review resumes and applications, and teach managers to conduct thorough and skilled interviews. All personnel should receive fraud education; awareness and knowledge are extremely useful in combating fraud.
5. Dispense discipline in a fair and equal manner
Even in cases when small fraud is identified, deal with it quickly and consistently. Ascertain that the sanction is consistent with the code of conduct.
6. Risks must be identified and measured
Assess your company’s fraud risk, calculate the likelihood of fraudulent conduct, and respond appropriately. Financial integrity should be preserved, risk should be identified and measured, systems should be improved, and fraud should be prevented proactively.
7. Don’t put your faith in a financial audit
By attesting to the quality and completeness of financial statements utilized by third parties, audits give a demonstrable advantage. A financial audit, on the other hand, is unlikely to reveal fraud. Audit procedures are not designed to detect fraud and are performed on less than 100 percent of activities.
These procedures are part of a larger risk management strategy. While your organization may not be able to execute all of these suggestions, you should do at least two of them: adopt an ethical tone and establish strong internal controls. All other policies and processes are built on the foundation of these two actions. Set a three-year strategy once they’re in place.
A Victim of Online Scams? Report Your Scam & Get Your Money Back in 30 Days or Less!
If someone asks for your bank account or personal information, it’s reasonable to think you’re being conned. Never give out personal information to someone who contacts you directly over the internet. If you must conduct business online, be sure you do so on a secure server and through a trusted site. If you think you’ve been duped, change all of your passwords right away and delete any dangerous software you might have downloaded, as well as call your credit card provider if required. To report the scam and seek help with the following steps, contact your local law enforcement authorities. You can also notify the scam the FED, the FTC, the United States Postal Service, and your state’s attorney general’s office.