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Information Technology: Cyber Fraud
The Organization for Economic Co-operation and Development states that the electronic marketplace is yet to realize its potential due to the consumer’s concern about fraud (1). This type of fraud is known as the cyber fraud. The article written by OECD analyses different types of cyber frauds that have made consumers lose both money and confidence in this area of technology. The banking sector is the most affected in this line of e-commerce. Thousands of consumers are falling for this type of fraud world wide, despite the many measures that have been put in place to curb this activity. The objective of analyzing this sector will be to make the public aware of the different types of frauds in the banking sector, the way people fall for this fraud, how it has affected the society and what to expect in the future.
Place and Impact of Cyber Fraud in the Banking Sector
The most common types of frauds in the banking sector are denial of service, identity theft, credit card frauds, phishing, ATM frauds, just to mention but a few. According to the statistics retrieved from the U.S Federal Trade Commission by Paget of McAfee, the complaints filed for identity theft had reached a toll of 250,000 by the year 2008. The complaints filed for internet fraud related cases and other frauds were 200,000 and 400,000 respectively (3). The most notable increase change took place in the year 2007. Unfortunately, Olasanmi (1) finds out and concludes that the total eradication of these types of crimes dominating the banking sector cannot take place. However, these crimes can be substantially reduced through the thorough implementation of internal control measures within the structures of any bank organization.
Many fraudulent activities take place through people’s emails. They originate as spam messages, but if the fraudster is good enough, they can come through the usual inbox messages. In most cases, the fraudsters pose as government officials, members of a royal family or persons from a foreign country trying to transfer money out of or into a country. These people offer an attractive amount of money if the required services are offered (OECD 2). When it comes to credit card fraudulent activities, the persons involved either are masters of IT technology or have been taught how to engage in the activity. In other cases, these fraudsters are so good in computer technology that they can hack into a banking system, thus access the information/accounts they want, stealing people’s deposits or engaging in any transactions they wish to engage in.
According to Olasanmi (4), “Old generation banks to do not experience more computer crimes as the new generation banks”. This is because the new generation banks have engaged in activities, which involve the use of the internet and computer more than the old generation banks used to. For example, most of the deposits and the withdrawals used to be done manually over the banks’ counters. In the new generation banks, customers are encouraged to use ATMs as much as possible in order to avoid the long queues in the banking halls and the slowness that comes with manual work. In fact, there are banks, which charge exceptionally high fees for over-the-counter withdrawals and charge nothing for the ATM withdrawals. Such policies and activities encourage very many people to work through ATMs thus increasing the fraudsters’ target market.
OECD also found out that the consumers/customers who fell for these fraudulent activities were not the naïve ones only unlike the popular perception. The most net-savvy consumers also fell for these activities as the fraudsters are coming up with new ways of deceiving people every day. As earlier noted, there are those who engage in fraud through the banking systems.
Just as it has been difficult to eradicate crime, it will be hard to eradicate cyber crime in the banking sector. The banking systems should use the technology, which is constantly being invented in order to reduce these crimes as much as possible. The customers should also be educated on ways of avoiding these crimes from taking place so that they become alert of those common ways the fraudsters use. The suspects found guilty of these acts should be given harsh sentences in order to discourage this act. After all, technology is here to stay, and it will only be wise to work on the weak areas rather than condemning it as a source of ‘evil’.
My Thoughts and the Impact on my Community and the Future
In my opinion, it is true that cyber crime is affecting the consumers’ confidence in the banking sector. However, the banks are working hard to ensure that they are winning back the consumer’s confidence through implementing strict measures to curb different activities. However, the consumers should stop pointing fingers at everybody else except themselves. They learn ways in which these fraudsters work so that they can be on the look put.
My community has been greatly especially because most of them are average earner thus making them vulnerable to the promises made by the fraudsters. However, these will reduce in future as cyber crime education is taking place in schools, offices, and other places whether the computers and the internet are frequently in use. Additionally, today’s generation is more technology literate than the previous generations. This generation will become grow older finding ways of eliminating such problems, which are anticipated to happen even in the future.
Works Cited
Olasanmi, Omoneye Olufunke. Computer Crimes and Computer Measures in the Nigerian Banking Sector. Journal of Internet Banking and Commerce, 2010, 15 (1): 1-10. Web. February 7, 2012. www.arraydev.com/commerce/JIBC/…/OLASANMI-JIBC%20Doc.pdf.
Organization for Economic Co-operation and Development. Protecting Consumers from Cyber Fraud. Policy Brief, October 2006: 1-8. Web. February 7, 2012. www.oecd.org/dataoecd/4/9/37577658.pdf
Paget, Francois. Financial Fraud and Internet Banking: Threats and Countermeasures. McAfee, 2009: 1-26. Web. February 7, 2012. www.mcafee.com/hk/resources/…/rp-financial-fraud-int-banking.pdf
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