For anyone who has ever asked, “Does anyone really fall for those lottery emails?” the answer is a resounding “Yes.” According to research commissioned by Microsoft on lottery scams, one in 44 Internet users has been a victim of Internet fraud in the last 12 months. Those who do not think they’re winning the Lottery may be victims of other variations of advance-fee fraud including inheritance “419” scams, lonely hearts, and a variety of opportunistic scams playing on disasters in the news (scams involving fake charities, abandoned travelers/workers, etc.).

Tim Cranton, associate general counsel for Worldwide Internet Safety Programs at Microsoft, said, “This online threat differs from those that try to exploit software code or attack computers. Lottery scammers prey not on software, but on the hope of their victims — and with scams that can be so creative and plausible, internet users simply don’t know whom they can believe. Microsoft is announcing this coalition with the African Development Bank, Western Union and Yahoo! today with the goal of helping to better ensure end-to-end trust in the internet for everyone.”

Much of the money changes hands through Western Union which has branches throughout the world.

“It’s a common perception that only naive and extremely gullible people fall victim to lottery scams. However, it can happen to anyone, especially those who are experiencing financial pressure,” said Christopher Fischer, senior counsel EMEASA, Western Union Financial Services.

Last week, Microsoft Corp, Yahoo! Inc, Western Union and the African Development Bank announced the formation of a coalition to raise global awareness among consumers of the threat posed by lottery hoax e-mails. Through this collaborative effort, the coalition members will educate internet users so they are better able to protect themselves against fraudulent activities online.

The companies provided detail in their announcement:

Lottery scammers often misappropriate or misrepresent established and credible brands to add authenticity to their hoaxes. The huge volume of e-mails they send coupled with the fact that their use of the internet enables them to transcend national borders makes it hard to understand the true scope and range of their activities.

To address this, victims of lottery scams that involve any of the coalition companies’ brands or services can report their experience to their local police authority. Interpol will communicate with national law enforcement agencies to inform them of the initiative and provide guidance on critical information to collect.

Victims will be invited to send a copy of the police crime report to the relevant coalition company member. Each company can then apply its own in-house investigative expertise in an effort to identify trends and common patterns, such as multiple scams emanating from the same geographic region.

“All four companies share a common interest in addressing cybercrime and online scams,” said William Godbout, chief security officer at African Development Bank. “There has been an exponential increase in the volume of online criminal activity using our trademark. Although there is no financial loss to the bank, these crimes impact our reputation and image. The reputation of African banking, of African development institutions and of the African continent in general are significantly jeopardized by the explosion in cybercrime falsely using African entities. With the assistance of our partners, in conjunction with both international authorities and local African law enforcement organizations, we will prosecute this criminal activity to the greatest extent possible.”

Victims of lottery scams can report cases by sending their police crime reports to the following dedicated and security-enhancedaddresses:
African Development Bank – security@afdb.org
Microsoft – lotfraud@microsoft.com
Western Union – spoof@westernunion.com

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Apparently even Microsoft’s backing isn’t enough to secure safety in the mercurial world of social networking.  Wallop, an invite-only social network branded as “the exclusive social experience”, today posted the following message on their website:

Dear Wallop.com Member,

Thank you for being part of the Wallop beta social networking site. We really appreciate your feedback and support. The beta period will end on September 18th, 2008 – after that date you will no longer be able to access your account.

Wallop was backed by $13 million from Microsoft and venture capitalists including Norwest Venture Partners, Bay Partners and Consor Capital.  The site was officially launched at the Demo conference in 2006.

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