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The term Internet fraud refers to any type of fraud that uses e-mail, Web sites, chat rooms or message boards to submit fraudulent claims to potential victims, to conduct fraudulent transactions or to transmit the proceeds of a fraud to financial institutions or other related arrangements.

Overview
Internet fraud is committed in several ways. The FBI has people assigned to combat this type of fraud, according to its figures, U.S. business losses due to Internet fraud in 2003 exceeded U.S. $ 500 million. In some cases, fictitious merchants post excellent prices for goods and never deliver. However, this type of fraud is minuscule compared to criminals using stolen credit card information to purchase goods and services.

Geographical Origin
In some cases of Internet fraud originating in the U.S., but a significant proportion of organized Internet fraud seems to come from Africa, especially Nigeria, and, sometimes, Ghana and Egypt. Some originate in Eastern Europe, particularly Romania, and in Southwest Asia. For some reason, many fraudulent orders that seem to come from Belgium, Amsterdam in Holland, from Palestine, and Malmo in Sweden. Lately, some fraudulent orders seem to originate in China.

Popular Products
Fraudsters seem to prefer small and valuable products such as watches, jewelry, laptop computers, digital cameras, and ink cartridges.

Mon€o branded as (MON€O), is an electronic purse system available on French bank cards to allow small purchases to be made without cash. The system is aimed at small retailers such as bakeries and cafés and intended for purchases of less than €30.

The card is inserted into a handheld Moneo reader by the merchant who enters the transaction amount for the customer. The customer then confirms the purchase by pushing a button on the keypad, the exact amount debited from the card within a few seconds.

In addition to the multipurpose bank card version, anonymous cards are available for the use of people without bank accounts, such as children and tourists. Supported by all French banks, Moneo was trialed in Brittany in 2002, and from 2004 Moneo is being added to most French Bankcards as they are replaced.

Visa Cash is a smart card electronic cash system owned by VISA. Tested in various locations worldwide, including Leeds, UK in 1997, the system works via a ‘chip’ embedded in a bank card, and looks similar to the so-called ‘Chip and PIN’ cards issued in inter alia France and the UK.

The card is ‘loaded’ with cash via specialised ATM machines, and the cash can later be ’spent’ by inserting the card into the retailer’s card-reader and pressing a button to confirm the amount. Neither PIN entry nor a signature is required, which makes for a speedy transaction.

Other competing cashless payment systems for micro-payments (small amounts) include Mondex. A more successful smart card electronic cash system is the Octopus card system in Hong Kong.

E-gold is a gold digital currency and online payment system operated by e-gold Ltd since 1996 that allows the transfer of money between e-gold account holders. It is also a way to invest in gold and precious metals. A little under 2.4 million e-gold accounts in existence today.

The e-gold payment system offers a variety of currencies, e-metals “, namely e-gold, e-silver, e-platinum and palladium-e, which represents a claim gold, silver, platinum and palladium, respectively. Among them, e-gold is by far the most popular e-metal in the system. Users May take physical delivery of the precious metal on the payment of additional fees. However, most Users allow the operator to retain possession of the metal. or e-transactions are completed electronically, usually on the Internet, and they always pay by the weight of metal, even if denominated in another way.

Even if the e-gold does not advocate a particular political agenda, for example, freedom does Dollar, e-gold can be seen as a libertarian money because it is not subject to government policy in the same manner as the Federal Reserve changes the value of the dollar.

Convenience
Credit card egold is seen by proponents as an alternative to traditional forms of payment, which in some cases (especially in online transactions), may be less effective or more costly. The e-gold system (and other digital currencies), provides a system where transactions clear instantly. This is in contrast to checks or credit card transactions which when used could take days for funds to be deducted from an account. Also, unlike other on-line payment systems such as PayPal, there are no distinctions between commercial and non e-gold accounts. As such, all e-gold accounts carry the same fees and have the same capacity to receive and transmit e-gold holdings.

Asset Protection
Proponents of the e-gold system contend that e-gold assets are protected against inflation, devaluation and other economic risks inherent in Fiat currencies. These risks include what are perceived by e-gold that the promoters of actions by national governments and central banks that diminish the value of assets held in currencies Fiat. In addition, many proponents of e-gold system believe that e-gold offers a truly international and decentralized which is the currency vis-à-vis central bank of a country or territory.
There is also no way to reverse transactions, even in cases of self or error unauthorized passer (see below). e-gold employment conditions stipulate that all passwords are final and e-gold can not be held liable for any spending. In this regard, an e-gold spend more akin to a cash transaction while PayPal transfers, for example, could be considered more similar to credit card transactions.

Disadvantages
Compared to other systems like PayPal, the process of buying e-gold can be confusing to someone unfamiliar with e-gold system. Unlike some operators of digital currency, e-gold Ltd. does not sell digital currency directly to the user. Instead, many third parties to sell services to exchange e-metal in exchange for money for a percentage of transaction fees. Conversely, these exchanges suppliers to sell fiat currency in exchange for an e-metal, for a percentage of transaction fees. In this way, e-metals can be converted back and forth to a variety of Fiat currencies of various countries. The amount of a currency or e-metal necessary to complete a transaction is determined by the then current price of the metal compared to the value of the currency.

Security and Fraud
As an online service, e-gold is vulnerable to various threats, including phishing (for example, fake e-mails asking for login information) and spyware. Recently, a Trojan horse specially created compromised “dozens” to “low hundreds.” e-gold accounts. Although the Trojans usually in silence save the login information of the user unsuspecting, the Trojan horse in question (Win32.Grams) emptied the accounts themselves by transferring the contents (probably) to ‘attacking the account.

e-gold has also been known to the medium of choice for online with many con artists. Pyramid and fraudulent investment programs are commonplace. This is apparently due (at least in part) to e-gold maintaining its policy of irreversibility of e-gold transactions.

Many e-gold exchange providers also require a high level of identification, in many cases, the same level if not higher than most banks. In comparison, processors such as PayPal and StormPay allow users to easily create accounts and only to request identification to increase maximum daily spend limit.

Backup
e-gold, according to e-gold site, “100% backed by gold” There is no way of knowing whether the e-gold Ltd. has real gold in the currency back in e-gold system. e-gold is to maintain an “examiner”, a web page with updated statistics on liabilities and the total amount of each precious metal in its operations. While developers generally ensure that rather, critics remain skeptical.

In addition, since all e-gold is backed by a physical basis, it is subject to price fluctuations that occur naturally on this product. This can be a major problem if there is a sudden increase in the supply of gold and you’re holding or e-currency, the value of your currency just fallen, you’ve lost money. This may, however, in both directions. Proponents of e-gold system would say that the risk of sharp fluctuation of prices is low compared to the perceived risk of fluctuations in currency value between fiat currencies.

Electronic money (digital money or eCurrency) refers to species and operations implemented by electronic means. Typically, this involves the use of computer networks (such as the Internet) and digital stored value systems. Electronic Funds Transfer (EFT) is an example of electronic money. It is also a collective term for technologies of cryptography and enable it.

Although electronic money has been an interesting challenge for cryptography (see, for example, David Chaum work), the use of digital cash to date has been relatively small scale. One of the few success has been Hong Kong system of Octopus card, which began as a system for payment of transit and became widely used electronic payment system. Another success was the Canadian Interac network, which as of 2000, exceeded the cash payment method to retail in Canada.

Electronic Money and Currency
Technically, electronic or digital money, also known as eCurrency, is a system of representation or debits and credits used, but not limited to the exchange value in another system or a single system itself, online or offline. eCurrency or electronic money is also sometimes used to refer to electronic money Society itself. Electronics can be an independent Fort Gold as the currency e-gold or not backed by gold as eeeCurrency or just before the euro as legal tender the Euro was introduced in 2002.

Some eCurrency systems sell to the end user directly, such as Paypal, but many systems or to sell through their own exclusive eCurrency market, such as e-Gold and Omnipay or eeeCurrency system and the system eCurrencyExchangers , Or through a market Maker or exchange eCurrency that could cover a range of electronic money. These interchanges can be automated systems such as System eCurrencyExchangers or manually exchangers as the golden age.

In the case of the Octopus Card in Hong Kong, deposits work similar to banks. After Octopus Card Limited receives money for deposit from users, money is deposited in banks, which is similar to a debit card issuing banks redepositing money from central banks. Some currencies, as some LETS systems, working with electronic transactions. Cyclos software allows the creation of the electronic community currencies. Ripple monetary system is a project to develop a distributed system of electronic money independent of the currency.

Benefits and Advantages of eCurrency
More money in the world today is electronic, and species concrete starts to become less frequent. With the introduction of the Internet / online banking, debit cards, bill payments online, and Internet companies, paper money is becoming a thing of the past.

Banks now offer many services whereby a customer can transfer funds, purchase stocks, contribute to their pension (as the Canadian RRSP) and offer a variety of other services without having to manage physical cash or checks. Customers do not have to wait in lines, thus providing a lower hassle.
Debit cards and paying bills online to allow the immediate transfer of funds from one individual account to a company without any paper money transfer. This offers great convenience to many people and businesses.

Issues and Disadvantages of eCurrency
Although there are many advantages to digital cash, there are also many disadvantages. They include fraud, failure of technology, and loss of human interaction. Digital cash fraud has been a pressing issue in recent years. Hacking bank accounts and illegal extraction of bank led to a widespread invasion of privacy, and encouraged identity theft.

There is also a pressing issue regarding digital technology in cash. The outages, loss of documents, software and undependable often cause a major setback in the advancement of technology.
The largest demographic in society, the baby boomers, have been reluctant to adopt the many advantages of digital cash. This is due to the loss of human interaction that often occurs when digital cash is used to its full potential. Therefore, what has deterred a large segment of global society of technological advantage.

Future Directions
The main objective of digital cash is able to spend through various means such as secured credit cards, bank accounts linked to be used on the Internet a medium of exchange to a system of micro payment as in large companies (PayPal).

Future developments of networking in terms of digital cash, a company is named Digicash on the creation of an e-cash system that would allow an e-issuer in cash to buy electronic parts at a certain value . When they purchased, they are purchased under its name and stored on their computers or their online identity. When expenses of the fund because it is linked to e-cash society, it provides everything that is bought in terms through the issuer at any time since the company knows your information, and the direct purchase of your home.