The Dark Web is Empowering Financial Crime

Financial fraud and digital economic attacks are occurring more than ever thanks to the rise of new technologies and the Dark Web—the portion of the internet unavailable through traditional browsers and only accessible via specific protocols and encrypted networks. Financial crime is hardly new, but this online underbelly has given it new life and levels of sophistication.

The Growth of Financial Crimes Online

Over just the past few years, startling data has tracked the rise of financial digital fraud. As of 2018…

Financial Crime Statistics

5 Major Types of Financial Crimes

There are numerous ways that financial crimes happen online, but many of the most popular methods fall under the following categories.

  1. Phishing is one of the most common and worrying attacks because it is incredibly effective and relatively easy to implement. Criminals use fraudulent communication, such as fake emails, SMS, or websites to steal private information which is then sold or used to access further company data.
  2. Malware is software designed to damage or compromise networks or devices such as computers, tablets, or mobile phones. The gleaned data is often used to infect other devices and access financial accounts.
  3. Identity theft is the stealing of personal data which is used to impersonate the individual. While this can be done by absconding with physical IDs, virtual identity theft allows criminals to use info such as names, addresses, birthdays, Social Security Numbers, and more to create fake online profiles and accounts.
  4. Money laundering occurs online because the Dark Web allows illicit funds to be transferred to and from multiple anonymous accounts, helping thieves secure ill-gotten gains.
  5. Carding is the use of stolen credit cards to purchase goods or make fraudulent purchases of fake or virtual items as alternate forms of money laundering. Modern criminals can simply use digital numbers to enact these attacks, and this card info can be bought from other hackers who’ve stolen the data from compromised networks.

A lot of these attacks are often used in tandem with one another, making them highly complex schemes that are difficult to detect.

Dissecting the Anatomy of an Attack

With any financial fraud attack online, there are basic similarities common to all.

  • Pre-Attack: The target is defined and vulnerabilities are researched. Materials such as fake emails, websites, and malware are readied to launch the fraud campaign.
  • Active Attack: Victims are contacted with engineered communications. Any who fall for the fake outreach or make any purchases or payments through fraudulent channels are then fleeced for their private data.
  • Post-Attack: Criminals take the stolen data and develop new attacks or sell it to other would-be-crooks. Funds are laundered and secured in anonymous accounts. When the company becomes aware of the attack, they must spend extensively to recover from the blow, while the next fraud campaigns are already being set in motion.

Tracking Financial Fraud Trends

Month-to-month, new financial fraud strategies gain popularity, especially in countries that lack the digital security infrastructure necessary to actively defend against such crime. By remaining aware of these trends, companies can be proactive in setting up effective procedures to negate or mitigate their vulnerabilities.

One trend is Brazilian-based phishing, where fake copies of online stores are made, with emails and SMS messaging used to lure users into purchase products or services through familiar logos. Fraudsters even go the distance to follow up with victims via WhatsApp – a popular messaging app, to ensure purchase of the product occurs. Even if the purchase is legitimate, the data used to log into these sites is stolen.

The Dark Web’s anonymous server networks allow hackers to keep fake websites active longer, since even scam websites must have web hosting to be accessible. Rather than relying on well-known, legitimate hosting, private servers are used, letting false sites stay online and be used in ongoing fraud campaigns.

Lastly, fraudulent AirBnB and home rentals are also being used, with fake accounts and ads acting as go-betweens for money laundering.

The Impact of Financial Fraud

In all instances, financial crime is committed purely for the profit, with stolen data used to infiltrate financial accounts or sold to the highest bidder. As virtual currencies continue to rise and the financial industry grows increasingly reliant on digital tools such as online banking and funds exchanges, companies must be vigilant in protecting themselves against financial fraudsters. What financial corporations can do is invest in proactive, protective measures by enlisting financial crime experts such as FraudWatch International.

Discover how FraudWatch International actively monitors the pulse of financial fraud online, analyzing known perpetrators and their attack techniques and methodologies to help businesses fight these crimes more effectively.