Sleuthing for Internet Fraud: Click Laundering

You’ve heard of laundry, and money laundering but have you heard of click laundering? Are you a small business owner? Do you use ads or affiliate links on your website? Find out about the latest round of internet fraud scams that can cost business owners and consumers money.

Ever heard of click laundering? It’s here! The term is a play on the legal definition of money laundering, and involves a relatively new Internet crime that is a sophisticated form of “click fraud.” Bogus ad-revenue-generating Web-link “clicks” are disguised to appear as legitimate online enquiries.
Internet fraud is evolving from the days of fake emails and phishing scams to entail e-commerce and online businesses. This newest form of fraud cost legitmate businesses and you, the consumer.
Microsoft Senior VP and General Counsel Brad Smith said: “Online ad fraud is evolving in sophistication all the time. Fighting it demands vigilance and dedication to an honest and secure online marketplace. We believe that a trusted marketplace is critical to Internet commerce, and Microsoft will continue to take aggressive action working with industry and law enforcement to protect our platforms, customers and advertisers.”
Microsoft currently has a couple of lawsuits pending involving the click laundering phenomenon. The scam was uncovered after Microsoft noticed highly a irregular escalation in number of ad clicks on two of their sites.
The way it works is this: A Web-site has ads that encourage interested parties to click on the ad for more information or to purchase a product. Generally, the site’s owner receives some form of share of revenue generated via the online ad. But here’s the kicker, in click laundering, the ad clicks are not legitimate. They can be done by single individuals manually, or even by a computer program or automated script.
It’s a sophisticated crime in that scammers will use high-tech means to achieve their fraudulent goals, including utilizing malware to trick Internet users into visiting sites where they are actually unwittingly clicking on an ad.
Plus, the thieves are even more creative in that they are disguising their clicks’ origins where the ads cannot tell where the clicks are actually coming from.
Microsoft has announced it’s actively investigating such patterns of Internet fraud and has vowed to take full legal action against those responsible. The crime is a felony in many jurisdictions.
For more info:
Small Businesses and Identity Theft
Golden Cash Network Uses Bots and Zombies to Steal Data
Lost Clicks
Internet Marketing for Small Businesses
Identity theft secrets, guest writer, Sami K. Hartsfield, ACP, is a paralegal in Houston with experience in commercial litigation and tax law. She holds a degree in paralegal studies and a bachelor of science degree in political science. After interning with Texas’ 14th Court of Appeals under Chief Justice Adele Hedges and completed the University of Houston Law Center’s Summer 2008 Prelaw Institute, she is preparing to enter law school this fall. Sami holds a national advanced paralegal certification, and four specialty certifications: Discovery; Trial Practice; Contracts Management; and Social Security Disability Law. More helpful tax information can be found at her National Tax Law Examiner page.