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    Katrina Donors Should Beware of Scams

    By
    Evan Schuman
    -
    September 1, 2005
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      Generous people wanting to help victims of Hurricane Katrina should direct their financial contributions carefully, so that the money isnt diverted by e-commerce thieves.

      Scammers taking advantage of the disaster dont need much capital or personnel: The Web provides them all they need in the way of cover, illusion and false identities.

      Firstly, there was some warning of the hurricane, allowing time to register domains, design professional-looking sites and set up bogus links and spam e-mail campaigns.

      /zimages/1/28571.gifRead details here about how wireless providers have been trying to maintain coverage during the Katrina disaster.

      Secondly, this is the kind of disaster that generates global generosity. Major credit cards are trackable, and money can be refunded if fraud is later proven. But in parts of Europe, Asia and India, online credit card usage is much less common than in the United States. Also, some con artists have pushed PayPal as a payment method and created bogus PayPal landing pages.

      The biggest advantage that online con artists have had is that many of their victims do not yet know they are victims, and many will never know.

      The victim goes to a Web site that requests money to help the Katrina victims. The victim generously donates, say, $500. A day later, $500 is removed from the bank account and or charged to a credit card. No surprise: The victim expects that money to be removed.

      But do charity donors typically check later to see if their funds arrived in the intended place? How would one even do that in this scenario?

      Mark Rasch, former head of the U.S. Justice Departments computer crime unit and current senior vice president and chief security counsel for Solutionary Inc., points out that many of the traditional rules about avoiding charity fraud dont apply to an incident-specific effort, such as Hurricane Katrina relief.

      /zimages/1/28571.gifYahoo updates its e-commerce package for small businesses. Click here to read more.

      Traditional rule No. 1 is to only donate to long-standing recognized charities. That would suggest organizations such as the American Red Cross, the United Way and the Salvation Army, he said.

      The problem is that there are some legitimate fund-raising groups that are brand new, having been created to help the Katrina victims.

      “There are going to be legitimately created foundations and funds that are going to spring up,” Rasch said. “Just because its new doesnt necessarily mean that its fraudulent.”

      Unfortunately, a newly created charity has no history, no reports with the Better Business Bureau and no easy way to establish credibility.

      A safe course is for people to visit the Web sites of established charities and contribute through them. An even safer approach might be to just telephone them, thereby avoiding fraudulent sites that are trying to mimic those legitimate sites and hijack their traffic.

      Web sites of established charities seem to be getting plenty of traffic these days, though. Keynote Systems, which monitors Web traffic and site responsiveness, on Thursday reported huge performance reductions for both the Red Cross and Salvation Army sites.

      “Keynotes measurements, taken from the top 25 cities in the United States, show these sites available only sporadically from 7 am to noon both yesterday [August 31] and today [September 1],” the Keynote statement said.

      “Wait times for these sites to load were often as high as 38 seconds. Keynote noted the same phenomenon on many charitable and government Web sites during the Tsunami disaster and can only attribute it to a traffic storm.”

      Keynote reported that it is also watching Catholic Charities USA, FEMA, the City of New Orleans, the City of Mobile, the State of Alabama and the State of Louisiana.

      In a disaster, people want to feel trusting and charitable. Alas, it takes a disaster to reach peoples hearts and get them to open up enough to offer money, and then the worst of humankind steps in, forcing them to think twice before doing so.

      Evan Schuman is retail editor for Ziff Davis Internets Enterprise Edit group. He has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop anytime soon. He can be reached at Evan_Schuman@ziffdavis.com.

      /zimages/1/28571.gifCheck out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.

      Evan Schuman
      Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.
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