Fraud has become widespread and insidious on the Internet.
And it's not only consumers who are at risk.
"Businesses are a common target," says Auburn, Calif.-based security consultant Dennis Dalton.
Last year, more than 55 percent of the 300,000 fraud complaints received by the Federal Trade Commission were Web-related. Internet Fraud Watch, a Washington, D.C., organization that tracks online crime, reports that the average loss per instance rose from $468 in 2002 to $527 last year.
"Criminals are getting more aggressive and clever, and the virtual nature of online communications creates greater risk," says Dave Nielsen, founder of FightIdentifyTheft.com, a Web site that provides news, information and tips about online fraud and identity theft.

The faces of fraud
"Phishing" is Internet lingo for schemes in which scammers trick victims into volunteering personal data such as Social Security and bank account numbers.
But phishing is the only scheme being perpetrated by scammers. The list of online crimes is growing. Although identify theft and outright non-delivery of purchased goods receive the most attention, criminals also are turning to credit repair schemes, charity scams, cramming (unauthorized charges on a bill), slamming (changing your phone service without authorization), bogus invoices, and other techniques.
In some cases, crooks steal data, including credit card numbers, from a PC by hacking into it and installing software.
One of the most common ploys for stealing sensitive data is when a scammer sends an individual or business an authentic-looking e-mail message stating that the individual or business bank account or credit card will be blocked unless immediate action is taken.
When the recipient clicks on the link provided in the message, he or she lands at a phony Web site that collects account numbers, Social Security data and other sensitive information. "The thief can then use the business' name and reputation to commit crimes," says Dalton.
Another vexing problem is spyware, programs that install themselves on your computer without your knowledge, allowing the perpetrator to glean information directly from the PC, even with a secure browser connection.

Fraud protection
Combating Internet fraud requires a focus on key areas. Nielson says that a recipient of an authentic-looking e-mail from a bank or the IRS never should click on it and respond. "[Financial institutions] do not send out requests for information via e-mail," he says.
If there's a need to check information online, it's essential to navigate directly to the Web site and conduct business there. Better yet, call the company and verify the request for information.

Avoiding scammers
· Educate your employees about the threat of online fraud and instruct them not to reply to suspicious-looking emails.
· Install antivirus software on your company server and update it regularly.
· Install a spyware detection program, such as Lavasoft's Ad-Aware or Spybot-Search&Destroy, and security patches, on each of your company's PCs.
· Check your statements thoroughly and question any suspicious charges immediately.
· View your business checking account activity in real time with online banking services.

Small businesses tips

Young Businesses
· Establish bank, credit card accounts and Internet service with large, reputable companies that you know
· Don't respond to email ads and spam from unknown companies
· Get bids and business agreements signed in written, not just electronic form.

Established Businesses
· Check all bills and invoices carefully, particularly bills for the Yellow Pages and business directories
· Don't provide financial or account information to anyone who emails or calls
· Educate employees about fraud

Mature Businesses
· Steer clear of unknown charities or check an organization out before donating
· Ensure that only authorized employees have access to account information and core business data

Source: Wells Fargo Bank