Jumping on the bandwagon and attempting to make some cash is president and CEO of Long Island-based Applied DNA Sciences, Inc, Dr. James Hayward. He proposes a DNA-based identification system that could prevent these types of identity fraud in educational testing. Regarding cost he claims:

“This is a very affordable approach and it’s one we think will become widespread as a consequence …..and the beauty of DNA is that it would elevate any rapid screening to a forensic-level identification method that would [be upheld] in court.”

Hayward explained further to FoxNews.com:

“We start with the whole genome of a plant and it doesn’t matter which one. Plants are a great choice because they have quite complex DNA, in some cases as complex or more complex than humans and they also have systems that enable them to endure stressors we don’t normally expose humans to.”

Doesn’t sound like it will be cheap to me. Why is this guy is even involved? I think this is another case of seizing an opportunity to get rich. The school system has really changed over the past decade since I graduated.

What happened to the days of teachers and administration handling matters in the school system. Do we need the police and DNA experts handling the mischief of minors? I don’t think so! Why don’t we just send our kids into the prison system to learn and we can all be protected from ourselves like inmates?

A seamingly more sensible man, ETS spokesman Tom Ewing made this statement to FoxNews.com regarding the testing issues:

“ETS and The College Board have heard from a number of organizations offering unique technological solutions to address the test impersonation issue…While many of these solutions have been interesting, none have managed to eliminate impersonations without unduly disrupting test day, raising privacy concerns, or unduly adding to the operational burden of cost of the SAT Program. While we remain open to all ideas, we are focused on designing a solution utilizing technologies readily available to us to address this issue.”

I don’t think a big production is necessary to address this issue. If people are committing fraud, report it, and let it be dealt with in a manner appropriate for the crime. The school system doesn’t need to spend thousands of dollars on high-tech solutions or disrupt everybody else’s learning to dig deeper into the issue. Waste of time!

Here’s what another overpaid official, Tom Rudin, The College Board’s senior vice president for advocacy, government relations and development, had to say:

“In the end, it is the responsibility of local enforcement to take action…again, we are deeply committed to working with local law enforcement.”

Sounds like he’s really committed to learning and the students education. How can 20 cases of fraud even take place right under the nose’s of those administering the tests?
Who proctors these tests, robots?

Best Buy, Future Shop, Walmart, and London Drug have all reported similar returns from customers. Clearly the Merchants (and consumers) have been victimized in a scam to return fake merchandise in for a profit. As many as 25 of these fraudulent devices have been sold in the Vancouver area and more victims have come forward since the break of this story on Monday.

Most of the victims have already been issued refunds however, some consumers report being persecuted at the time of return. Obviously there is always a chance that one of the perpetrators is posing as a legitimate customer. I like to think most sellers would give paying customers the benefit of the doubt even at the cost of a overlooking a few bad apples (no pun intended)

It sounds like it is safe to say, retailers will be inspecting these products more closely at the point of purchase in order to protect themselves and consumers. Still it leaves some asking; why hasn’t this been the policy all along? iPads are not inexpensive devices. Sellers should be checking for damage and also that everything is in order with the packaging from the factory.

Apple has agreed to cooperate in the investigation in any way possible but has not made any specific comments about the incidents. Consumers beware; scams like these are becoming more common in the fast-paced world we live in.

[Source: CTV News]

U.S. Attorney Preet Bharara called it a “massive and sophisticated scheme.”

The fraud was perpetrated by seven individuals, all of whom the U.S. is trying to get extradited. Six of the seven are Estonian nationals and have been taken into custody. The seventh is a Russian national and he remains at large.

Here’s how the scheme worked:

Malware installed to millions of computers allowed the perpetrators to manipulate online searches in order to redirect clicks to certain sites and ads. They used these falsely-acquired clicks to generate ad revenue.

Some examples of this included links to Apple’s iTunes, Netflix, and even the IRS being redirected to unrelated sites.

The malware also interfered with the computers’ anti-virus software, making the intrusion even harder to identify.

As alleged in the Indictment, from 2007 until October 2011, the defendants controlled and operated various companies that masqueraded as legitimate publisher networks (the “Publisher Networks”) in the Internet advertising industry. The Publisher Networks entered into agreements with ad brokers under which they were paid based on the number of times that Internet users clicked on the links for certain websites or advertisements, or based on the number of times that certain advertisements were displayed on certain websites.

Thus, the more traffic to the advertisers’ websites and display ads, the more money the defendants earned under their agreements with the ad brokers. As alleged in the Indictment, the defendants fraudulently increased the traffic to the websites and advertisements that would earn them money. They accomplished this by making it appear to advertisers that the Internet traffic came from legitimate clicks and ad displays on the defendants’ Publisher Networks when, in actuality, it had not.

It’s shocking to see that the scheme apparently went on for more than 4 years.

The schemers also operated ad-replacement fraud, replacing certain ads on websites with their own. For instance, the infected computers that visited the Wall Street Journal site saw ads for “Fashion Girl LA” as opposed to what should have been there – an ad for the American Express “Plum Card.”

More than 500,000 of the computers that were hit came from the U.S. And we’re not just talking about personal systems – but systems from within U.S. government agencies like NASA as well as colleges & universities and non-profits.

The suspects face 27 charges, including wire fraud and computer intrusion.

The FBI wants to hear from you if you think your computer might have been involved in this scheme. They say standard, up-to-date antivirus software should be able to detect the malware.

Neither executive was found to be actually involved in the fraud, but the company found a significant increase in claims against particular sellers over the last year.

In a statement, Alibaba said it "confirmed that Mr. Wei and Mr. Lee and other members of senior management were not involved in any of the activities that led to the claims by buyers against fraudulent suppliers and management made good faith efforts to address the problem," the company said in a statement."However, our board has accepted Mr. Wei and Mr. Lee’s wish that they take responsibility for the systemic break-down in our company’s culture of integrity." (Via Dow Jones Newswires/Wall Street Journal)

Jonathan Lu, who is the CEO of Alibaba Group’s Taobao, will now run both Alibaba.com and Taobao.com. He said customer growth and robust long-term revenue are both expected.

Last month, Alibaba announced plans to build a network of warehouses across China, and drive major investment in logistics in that country, with the aim of allowing merchants to meet growing domestic consumption.

The court has barred the defendants from charging consumers’ telephone bills and barred them from telemarketing unless they get prior approval from the FTC and the court. It also ordered third parties through which charges were placed, including local exchange telephone companies, or LECs, to return money in escrow to consumers, and ordered the defendants to pay nearly $38 million in restitution for consumers.

FTC sued Inc21, charging that the company hired offshore telemarketers to call prospective clients to sell its Web-based services. The defendants then used LECs to place charges, usually between $12.95 and $39.95 per month, for those services on the phone bills of consumers and businesses that either:

*were told by telemarketers that the call was only to verify business information;
*declined Inc21′s offer of Internet services; or
*were told they would receive a free trial offer, but were not informed that they would be charged if they did not cancel.

In his opinion, Judge William Alsup agreed and granted the FTC’s motion for summary judgment. “The FTC has produced overwhelming evidence that defendants’ practice of billing tens of thousands of businesses and consumers via their telephone bills – a fraud-friendly practice called ‘LEC billing’– was both deceptive and unfair,” the judge’s opinion states.

“The most compelling proof of these violations is a comprehensive expert survey of 1,087 of defendants’ so-called ‘customers.’ This survey revealed that nearly 97 percent of defendants’ ‘customers’ had not agreed to purchase defendants’ products. Even more egregious, only five percent of them were even aware that they had been billed.”

Microsoft says its Internet Fraud Alert service will allow security researchers to more securely share information with service providers, retailers, financial institutions and government entities about incidents where compromised account credentials have been discovered.

Microsoft has donated the tool to the National Cyber-Forensics and Training Alliance which will manage the program while Accuity, the American Bankers Association, Anti-Phishing Working Group, and the Federal Trade Commission will all participate.

"Those who traffic in stolen identities often use online tools to collect, share and profit from compromised account credentials, but those of us working to combat identity theft have a few tools of our own," said Nancy Anderson, Corporate Vice President and Deputy General Counsel, Microsoft.

"By combining new technology and critical partnerships, Internet Fraud Alert helps alert institutions to stolen credentials so they can take action to combat fraud. The Microsoft Digital Crimes Unit is proud to be working with the National Cyber-Forensics and Training Alliance and everyone joining with us today to announce this valuable new tool in the fight against cybercrime."
 

Facebook filed suit against Power.com in December. Facebook claimed the one-stop social-media aggregator was infringing upon their copyright, violating their TOS and scraping proprietary data. At the time, we weren’t sure whether “proprietary data” included user information.

Power.com finally decided not to take this sitting down. TechCrunch reports that Power.com has now filed a countersuit, claiming Facebook is “unlawfully withholding the data that users own (as stated in Facebook’s own ToS), and is stifling competition by refusing to allow third party services like Power.com to access the data, among other things.”

Facebook also faces legal action from RootZoo, an erstwhile advertiser. After analytics from their Nov 2007-June 2008 campaign varied greatly from Facebook’s reported data, RootZoo requested Facebook’s logs and a refund. Facebook said no to both.

RootZoo’s complaint uses 2 June 2008 as an example of the discrepancies between the two. While Facebook reported 804 clicks on their ads, RootZoo’s analytics programs show 300 clicks from the social networking giant.

While there have been rumblings about Facebook click fraud for some time, this is the first suit in the matter.

What do you think? Does Facebook have anything to worry about from these legal claims against it? Is there anyway to avoid getting slapped with lawsuits once people see you’re making some money?

Comments

As initially reported yesterday there were click fraud complaints that up to 100% of clicks were fraudulent. While click fraud is nothing new to pay per click advertisers this was a bit different. Many Facebook advertisers were getting charged for clicks that simply never happened. In ‘traditional’ click fraud (if there is such a thing) the clicks are seen by advertisers but they are ID’d as not legitimate sources thus labeling them fraudulent. Facebook advertisers just were getting charged and there were no clicks.

While there are always problems with pay per click models it was Facebook’s apparent lack of attention given to complaints until there was recognition of the issue with TechCrunch. Many complaints were found on WickedFire and there was some heated discussion including (in which I have replaced some of the wonderful language that these folks use to communicate)

This is experienced by not just those that use 202. When in doubt, look at your raw apache logs – which I did. The result: 15% – 20% clicks never make it to my LP. Clearly a case of click-fraud going on. Tested on 3 different servers at 3 different DCs (not a network issue).

Sucks how high the numbers are today. Its clear the problem is getting worse daily. I’ve moved most of my “%$#^” off facebook for the time being and magically my %$#^ is all positive again. Crazy how that works. There are lots of places to buy traffic, some that will even actually give you the traffic you are paying for. Facebook is never going to admit to whats going on. I can almost guarantee you that.

Facebook is still reporting 20% more clicks than I actually get. This is bull$#%#. If I were at least getting bot traffic or something that would be one thing, but right now Facebook is simply stealing 20% of clicks that I paid for, which adds up to thousands of dollars. Someone should threaten legal action, this is straight up fraud on Facebook’s part.

What really got under the skin of the advertisers is the response they had received from Facebook regarding their issues.

According to the WickedFire posts, Facebook isn’t officially acknowledging the problem or giving any refunds so far. But they are asking some advertisers to send in logs to show the discrepancy. So far, advertisers who go to the trouble to do this aren’t getting the response they wanted: “I was asked to send in my logs so I spent over an hour compiling logs over the time period in question, and they replied with their &^#$ing scripted bull^%#$. I was sooo ^#$%ing pissed, since I took the time to do that and they churn out a 2 second response.”

So if you are Facebook, what should you do once this becomes something that is more than a few compaints? Well, Brandon McCormick at Facebook chimed into the comment stream over at TechCrunch with

This is Brandon on the Facebook communications team. I wanted to chime in to make sure that our voice was part of this discussion and to clarify how we are addressing this issue.

We take click quality very seriously and have a series of measures in place to detect it. We have large volumes of data to analyze click patterns and can identify suspicious activity quickly.

Over the past few days, we have seen an increase in suspicious clicks. We have identified a solution which we have already begun to implement and expect will be completely rolled out by the end of today. In addition, we are identifying impacted accounts and will ensure that advertisers are credited appropriately.

TechCrunch has published an update for this post that outlines some aggressive (but apparently not real subtle) attempts to grab some business from Facebook. As with anything in life it’s actually never about the problem. Stuff happens and in the Internet space that is even more prevalent. What is most important is how a problem is dealt with.

Had Facebook addressed these complaints differently from the start do you think the level of frustration expressed on WickedFire and elsewhere would have been as damaging? Online reputations are just like ‘traditional’ reputations (once again, if there is such a thing) in that the best way to handle any problems is quickly, head on and with transparency. Does it mean you will get a perfect solution every time? Absolutely not. It does, however, give you the best shot at making a bad situation better. So Facebook, remember that when you ask “What’s on your mind?” you have been cleaning up your side of the street.

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That’s the predicament facing Click Forensics as its fourth year of providing its Click Fraud Index shows a dramatic drop in the average industry click fraud rate. The fourth quarter of 2008 was all gloom and doom, with the rate climbing to 17.1%, but the first quarter shows a drop to 13.8%–that’s about a 20% decline.

Never fear, there’s bottom line to protect, so Click Forensics gets granular and explains that while overall click fraud may have dropped, what’s there is getting more sophisticated.

One new type of fraud discovered this quarter was perpetrated by malicious scripts that execute when a visitor views a web page disguised as relevant content or search results. The script initiates “Zero-iframe” or off-screen clicks that route the visitor session through an alias referrer website, and on to unsuspecting advertisers who pay for the phantom click. All this occurs transparently to the offending site’s visitor; they never see the ad or visit the advertiser, and their computer is not infected with any type of malware or botnet.

Before we all panic over this, keep in mind this is very likely an isolated incident as it was only just discovered "this quarter." That said, you have to tip you hat to Click Forensics for being able to identify such a complex case of click fraud.

I guess the big question is whether this drop is a blip or a trend? Are you seeing a drop in click fraud on your paid search campaigns?

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TechCrunch points out that over 30% of click fraud is via automated bots—another all-time high. This is a 14% increase over last quarter. I’m surprised the search engines aren’t doing a better job at keeping the bots down. This clearly continues to be a problem and needs to be addressed. I think the search engines need to release a state of the industry report on how they plan to cut these rates now ASAP.

Outside of the U.S., Canada is the largest driver of click fraud (7.1%), followed by Germany (3%) and China (2.3%).

TechCrunch also calls out that Click Forensics believes this may be a result of the economic state of the U.S., as old tricks like link farms are being used again. I think it is a direct result of a lack of focus, and perhaps effort, on the search engines’ side of things. What do you think?

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