The dark side of the web

Poyais territory, a strip of fertile land in the Bay of Honduras, sounds like heaven on earth. At least it did to thousands of nineteenth century European investors who have acquired land rights to the island.

They bought titles to the land of Gregor MacGregor, a Scottish adventurer who returned from his travels through South America with the news that he had been appointed chief, or prince, of this beautiful unspoilt and little-known nation-state.

The author of a 350-page guide titled Sketch of the Mosquito Coast, including the territory of Poyais, MacGregor Honored for London’s high society and soon became the reputation of great wealth.

After securing millions of investors, sent 250 of them in a perilous transatlantic passage to the island. Only 70 made it home alive. None of them saw Poyais itself – for the simple reason that the country did not exist.

You might think that in our current information age, as street vendors Gregor MacGregor would be far fewer and further between. After all, with a few clicks on Google, anyone can discover that there’s no place like Poyais. Unfortunately, however, fraud is more common now than at any time in the past – and part of the reason is the emergence of the World Wide Web.

The proliferation of web-enabled applications has created a whole new set of vulnerabilities, and criminals have proven to be very able to exploit them. Examples include pharming (redirecting traffic from one website to another, the phony Web site) and phishing (acquiring sensitive information by posing as a trustworthy entity).

The unauthorized access to information is the leading cause of identity theft – one of the main types of application fraud. Balancing the demands of twice the free flow of information and data protection is vital.

While fraud technology is not the only type of fraudulent practice, is now among the most common. Whatever its exact nature, fraud is serious, and seriously affects the individuals, institutions and, indeed, the world economy as a whole. Consider a 2006 U.S. Federal Trade Commission report, which estimated that fraud costs financial institutions and retailers more than $ 31.3bn a year. That’s more than the total annual GDP of Bahrain, and only slightly lower than that of Luxembourg.

Just as worrying as the rising incidence of fraud is the biggest challenge as a result of detection.

Here in the UAE, the incidence of fraud has increased over the last decade, in line with the significant level of population growth and increased access to credit available. More people and more banks here than ever before, as expected in this relatively open economy, most of these people are trying to defraud the banks themselves than ever.

The fraud is, unfortunately, often a byproduct of rapid economic growth. In this scenario, the verification of applications through access to comprehensive information is a strong preventive measure. Fraud detection is the first line of defense. The fraud prevention strategy recently outlined promulgated by the Financial Services Authority Dubai represents an important step in combating the country. This strategy requires the top management of companies that are regulated by the DFSA to establish systems to prevent fraud.

Every day, financial institutions compete directly with each other to win customers. However, many understand that competitive differences are irrelevant when dealing with fraud. The exchange of vital information to report suspected cases of fraud is especially significant because fraud can be successful only when one party knows more than the other.

By combining our collective expertise, decision makers are vastly more capable of fighting against this scourge of the information age. want perspective gives us a vital tool to stop fraud in its tracks. In the fight against fraud, more than ever, knowledge is real power.