Computer Fraud

Addendum Written by Ginger Kastor, Millburn C.C. School, Wadsworth, Illinois
Original by Megan J. Forness, Rochester High School, Rochester, IL


Introduction

Computer fraud covers a variety of activity that is harmful to people. Computer fraud is using the computer in some way to commit dishonesty by obtaining an advantage or causing loss of something of value. This could take form in a number of ways, including program fraud, hacking, e-mail hoaxes, auction and retail sales schemes, investment schemes and people claiming to be experts on subject areas. Students who may be committing a computer fraud or being taken advantage of by a person committing computer fraud can easily be using school equipment when this takes place. That is why it is important for educators to have knowledge of this area of computer crime.

Issues

Students in any grade level can easily be victims of computer fraud. Educating the students what to look for to be able to trust the information that they are receiving over the Internet is a useful skill for the students to learn. One issue of computer fraud that educators and students will most likely encounter would be obtaining false information while researching on the Internet. Students must learn to be skeptical of information on the Internet and learn the signs of good and bad websites. The students should also be aware of other computer frauds such as hackers, health frauds, hoaxes and other scams that people try to use on the Internet. Each school should have in place an Acceptable Use Policy to protect themselves against any student who tries to commit computer fraud using school property.

Minimizing Potential

Anyone who uses the Internet is a potential candidate for being a victim of computer crime. Educating students what to look for will help decrease the chances that they will fall into the computer fraud victimization. The following guidelines are set up by the Department of Justice to help computer users in the section titled How Should I Deal With Internet Fraud?:

  • Don't Judge by Initial Appearances.
    It may seem obvious, but consumers need to remember that just because something appears on the Internet - no matter how impressive or professional the Web site looks - doesn't mean it's true. The ready availability of software that allows anyone, at minimal cost, to set up a professional-looking Web site means that criminals can make their Web sites look as impressive as those of legitimate e-commerce merchants.
  • Be Careful About Giving Out Valuable Personal Data Online.
    If you see e-mail messages from someone you don't know that ask you for personal data - such as your Social Security number, credit-card number, or password - don't just send the data without knowing more about who's asking. Criminals have been known to send messages in which they pretend to be (for example) a systems administrator or Internet service provider representative in order to persuade people online that they should disclose valuable personal data. While secure transactions with known e-commerce sites are fairly safe, especially if you use a credit card, nonsecure messages to unknown recipients are not.
  • Be Especially Careful About Online Communications With Someone Who Conceals His True Identity.
    If someone sends you an e-mail in which he refuses to disclose his full identity, or uses an e-mail header that has no useful identifying data (e.g., "W6T7S8@provider.com"), that may be an indication that the person doesn't want to leave any information that could allow you to contact them later if you have a dispute over undelivered goods for which you paid. As a result, you should be highly wary about relying on advice that such people give you if they are trying to persuade you to entrust your money to them.
  • Watch Out for "Advance-Fee" Demands.
    In general, you need to look carefully at any online seller of goods or services who wants you to send checks or money orders immediately to a post office box, before you receive the goods or services you've been promised. Legitimate startup "dot.com" companies, of course, may not have the brand-name recognition of long-established companies, and still be fully capable of delivering what you need at a fair price. Even so, using the Internet to research online companies that aren't known to you is a reasonable step to take before you decide to entrust a significant amount of money to such companies.
Legal Implications

There are many laws dealing with concentrated areas of computer fraud. There are two general laws that include fraud. Federal Criminal Code 18 U.S.C. 1029 is Fraud and Related Activity in Connection with Access Devices. This code includes knowingly and with the intent to defraud computer users in a variety of ways. The punishment for this is a fine or imprisonment of between 10 and 20 years.

Another law that pertains to fraud is Federal Criminal Code 18 U.S.C. 1030 is Fraud and Related Activity in Connection with Computers. This code relates to intentionally accessing computers without authorization or exceeding authorization access. The punishment for this is a fine and/or imprisonment of between 1 and 20 years.

Each of these laws are set up to protect Internet users so they are not freely giving information to others without some consequences if the other party uses the information to benefit themselves. Thought the laws are set up, Internet users should make sure they know what they are getting into before any information is given. Be skeptical of deals on the Internet and giving personal information. Also, check sources so these computer criminals are not taking advantage of the Internet user.

Frequently Asked Questions (FAQ)

Should AUPs include computer fraud?

Definitely. Acceptable Computer Use Policies are in place usually put into place so that the school district is covered and the students know exactly what is acceptable and unacceptable at school. The better informed the students are of what is acceptable, the more reasonable most will be when using the computer equipment. Computer knowledgeable teacher observation of students use of computers will also greatly decrease the amount of computer fraud the students can do while at school.

How can students best protect themselves against being misinformed or harmed by fraudulent sites?

Students can best protect themselves by using critical thinking skills. By thinking and reasoning their way through each time they visit a website, join a chat room, or read e-mail, the students can gain an understanding of what is valid and what/who they should deter their attention. Educators as well as parents should teach students that the Internet is not a place where students should trust everything. Use good judgment and follow the guidelines above to minimize their potential for having fraudulent acts bestowed upon them.

Annotated Web Site Directory

Computer Crime and Intellectual Property Section
The US Department of Justice site offers the exact wording of federal codes related to cybercrime.
http://www.cybercrime.gov/fedcode.htm

Cybercrime and Internet Issues Index
Produced by Victim Assistance Online, it is a comprehensive Resource Center that has a section just for crime. This section includes Cybercrime Reporting Organizations, and Fraud and Identity Theft.
http://www.vaoline.org/internet.html

DMOZ Open Directory Project
This site is a database of other websites available to search legal information about fraud.
http://dmoz.org/Society/Law/Legal_Information/Fraud/

Flim Flam dot Com
This site exposes fraud, confidence games, scams, rip-offs, swindles, rackets, shell games, deceptions and flimflam.
http://www.flimflam.com/

Fraud Bureau
This free service site will alert online consumers of complaints that have been filed and provides information on how to safely surf, shop and invest online.
http://www.fraudbureau.com/

Identity Theft and Fraud
This site is created by the US Department of Justice. It contains information on how to identify theft and fraud as well as what you can do about it and what the Department of Justice is doing.
http://www.usdoj.gov/criminal/fraud/idtheft.html

Internet Fraud
Another website by the Department of Justice to make Internet users more aware of fraud and answers some frequently asked questions.
http://www.internetfraud.usdoj.gov/

Internet Fraud: How to Avoid Internet Investment Scams
Produced by the U.S. Securities and Exchange Commission, this site is an excellent introduction to the myriad of ways in which the Internet is being used as a tool for fraudulent purposes.
http://www.sec.gov/consumer/cyberfr.htm

Internet Fraud Watch
A good site created by the National Consumers League that exists to help consumers distinguish between legitimate and fraudulent promotions in cyberspace and route reports of suspected fraud to the appropriate law enforcement agencies. You will find a link to an online incident report form. It also provies a link that includes some useful basic Internet tips.
http://www.fraud.org/internet/intset.htm

Lies, Damned Lies, and the Internet
This is an excellent source to inform readers on the variety of deception, ways to protect yourself against fraud on the Internet.
http://marylaine.com/lies.html

The National Fraud Information Center
Introduces a number of different types of fraud including links to telemarketing fraud , internet fraud , and fraud against the elderly .
http://www.fraud.org/

Protecting Yourself from Consumer Fraud
This site contains links to 74 different types of businesses where consumer fraud can take place, including Internet Shopping.
http://legal.firn.edu/safety/protect2.html

Self, Home, and Family: Preventing Fraud
The National Crime Prevention Council has created this site to help protect yourself against fraud and gives some advise as to what to do if someone does rip you off.
http://www.ncpc.org/1pro6dc.htm

2 August 2002

Return to Educator's Guide to Computer Crime and Technology Misuse
Developed 29 July 2002.