Sky News UK has reported on the results of research into victims of online fraud.  The survey revealed that some fraud is never reported due to embarrassment, indifference, or simply not being aware that the fraud has even occurred.

These reasons might seem strange to some people who would assume that any fraud victim would want to see justice and would immediately report the matter to authorities.  Unfortunately online fraud caused by spam, phishing, and other scams often does go unreported.  Let’s take a closer look at the reasons for this, and why those reasons should be put aside in favour of more reporting.

Embarrassment

There are a few different reasons why someone may be too embarrassed to report a fraud.  The first is if the amount of money lost is very high.  Being scammed out of your life savings would be a devastating and embarrassing event that a lot of people would feel so ashamed about they may want to keep it secret.  An attitude of “I should have known better” can sometimes play a role in this.

Another reason is when the nature of the scam is sensitive and embarrassing.  Examples of this include Russian mail order bride scams, and fake male enhancement drug scams.  In both cases a person could easily be too embarrassed to admit they were attempting to purchase those items in the first place, on top of the embarrassment of being a fraud victim.

It takes a lot of bravery to come forward and admit you were fooled.  Two things should be remembered here – firstly these are professional criminals often with very effective methods for tricking people.  Secondly, reporting your incident to authorities can help prevent other people from becoming victims in future.

Indifference

Say what you want about criminals, but they usually aren’t stupid.  It might seem strange to look at them this way but a lot of online criminals are basically malicious marketers, and have all of the skills that honest marketers have.  One of these is an understanding of human nature, and one of the natural instincts of a lot of humans is not to bother with trivial matters.

If you lose $10 somewhere it’s no big deal, but if you lose your wallet with $500 in it you’ll turn your house upside down looking for it.  Online criminals know this, so they will often aim to scam a little bit from a lot of people in the hopes that most will be indifferent to their loss.

For example sending 10 million spam emails and fooling 1% (100,000) of those people into losing $50 each has just earned the spammer $5,000,000.  Collectively that is big win for the spammer, but how many of those 100,000 victims will bother reporting their $50 loss?  Not many I would think.  Most would just chalk it up as a lesson learned and get on with their life.  They may even get scammed several times per year and never report any one incident.

The big danger here is that scammers are free to continue raking in millions of dollars as long as they don’t hit any single target too heavily.  Given the size of the internet population there is a huge potential for this type of fraud to continue unabated.

Instead of this lazy approach people should view each minor incident as a part of a bigger picture, and report the matter to authorities.  The more small reports that are received the better the chances that the bigger picture becomes clearer and authorities can eventually track down and prosecute the criminals.

Awareness

A slightly more complicated reason is if the victim is not even aware that they have been scammed.  There are a few ways this might happen.  Ordering online goods with a 6-8 week shipping time might result in a person just plain forgetting they ordered them and not noticing they don’t arrive.

Other scams are packaged up in ways that could easily go unnoticed  PDF reader software scams could go completely unnoticed as long as the person’s computer continues to successfully open and read PDF files.  A $5/month ringtone subscription scam would go unnoticed by a person who doesn’t closely inspect their monthly cell phone account.

I’ve written here several times in the past about how the end user (that’s you) is the last line of defense again spammers and online fraud.  We must all raise our awareness of these matters and take note when we become victims of fraud that is cleverly hidden from us.  Paying closer attention to credit cards and automated payments, and investigating software authenticity before buying or downloading are ways to make sure that these things don’t slip through.

Does Reporting Online Fraud Really Help?

The short answer is yes.  Just this week Australian authorities were able to prosecute one of the world’s biggest spammers thanks to complaints made by victims.

These types of victories are only possible if we all maintain awareness of the problem and report all incidents in which we become victims ourselves.