The OFT, a government department set up to safeguard consumer rights, will team up with Trading Standards after it was revealed that online scams and fraud cost UK internet users around £3bn a year.

The funding, which will be spread over a three year period, will be used to raise awareness of email phishing scams and fraudulent websites. Issues such as consumer rights, particularly when purchasing goods from overseas, as well as increased awareness of antivirus software programs will also form part of the strategy.

“Online consumer protection is a key priority for the OFT,” said Heather Clayton, senior director of OFT.

“The enforcement team will be looking at the activities of a wide range of commercial web sites, and taking action in cases where consumer rights are being abused.”

Recent research by the OFT last year found that 73% of adults had received a scam e-mail in the past year, with almost 10% of adults – more than four million people – in Britain said they had responded to a scam in their lives.

Almost a half of those who did respond to a scam had lost more than £50, while 5% admitted to losing more than £5,000.

“The internet is rapidly transforming the way we shop. It presents massive opportunities for consumers, but unfortunately it also harbours fraudsters who can leave consumers upset and out of pocket,” added the government’s Consumer Minister Kevin Brennan.

According to new research from managed security firm Network Box into web-based security threats, more than 57% of all threats were phishing attacks, compared to 28.3% in November.

The firm’s analysis of web-based threats in December 2009 shows that just over 57 per cent of all threats were phishing attacks, compared to 28.3 per cent in November.

“The run up to Christmas is traditionally a time for hackers to strike the vulnerable. A higher proportion of shopping is done online, with more money spent than at any other time of year,” warned Network Box internet security analyst Simon Heron.

“Christmas offers rich pickings for phishers. This is likely to continue through the sales in January, and we urge online bargain hunters to be vigilant.”

The firm found that the Brazil was the greatest source of viruses and spam during that time, accounting for 20.9% of all viruses and 9.1% of all spam originated in December. The figure was up from 14% and 8% respectively in November.

The advice to users is to ensure that their antivirus software is fully updated.

The site, which reviews consumer gadgets and upcoming technology developments, was temporarily hosting advertisements which were infected with malware and fake antivirus software earlier this week after falling victim to what was described as an “elaborate scam”.

“Guys, I’m really sorry but we had some malware running on our site in ad boxes for a little while last week on Suzuki ads,” Gizmodo’s editorial director, Brian Lam told readers in a blog post.

“They somehow fooled our ad sales team through an elaborate scam. It’s taken care of now, and only a few people should have been affected, but this isn’t something we take lightly as writers, editors and tech geeks.”

He urged readers, particularly though who thought that they may have been affected, to update their antivirus software in order to minimise the risk to their PC and privacy.

“Be careful, load up some antivirus and make sure your system is clean.”

It is not the first time that online advertising has been the target of malware attacks, with major publications proving to be a particular target.

Back in September, the website of the New York Times recently suffered a similar attack, in which users clicking on a box advertising antivirus software found their PCs infected with viruses and malicious software.

The Economic and Financial Crimes Commission is hoping to crack down on predominantly email based scams that have become synonymously linked with Nigeria. In particular, so-called “advance fee fraud” scams informing potential victims of fake lottery wins or royalties for looking after financial transactions have become renowned as originating from the North African country, earning them the name of “419” scams – the penal code used to describe the scams under Nigerian law.

Under the new scheme, dubbed “Operation Eagle Claw”, emails will be scanned in an attempt to highlight suspicious messages and, where appropriate, identify the source of the message. So far, 18 “syndicates” have been arrested and around 800 websites shut down.

“We expect that Eagle Claw as conceived will be 100% operational within six months and at full capacity, it will take Nigeria out of the top 10 list of countries with the highest incidence of fraudulent e-mails,” Farida Waziri, chairman of the anti-scam force, was reported as saying by The Register in Las Vegas.

“When it is fully deployed, it will afford the EFCC the option of either monitoring or shutting down all fraudulent email addresses. The EFCC would also have identified victims and potential victims and advised them that their email has been compromised.”

Internet users are also being urged to take steps to ensure that they do not fall prey to phishing scams. Most forms of antivirus software now include email scanning to block spam and potential phishing scams whilst users should remain sceptical over offers of money or financial incentives, or requests for security details via email.

Perhaps unsurprisingly there are those who will use the internet to the disadvantage of others. There are a number of scams and viruses that are used to try and lure you into parting with your hard earned cash and your personal information.

By being aware of the most common scams and having quality antivirus software installed on your computer, you will hopefully be able to avoid being caught up in one of them. We have put together a list of the ten most common scams to help you be aware of what to avoid while you’re online.

Phishing

This is a very common scam in which you are sent an email from a professional looking company such as a bank asking you to confirm your details and will give you a link to do so. If you click on the link you will be asked to enter personal information, from which the scammer can access your bank account or put you at risk of identity fraud.

Never click on a links you think may be suspicious. Remember to always contact your bank or the organisation that appears to have sent the email in order to confirm if they actually sent it. Your bank should never ask you to divulge your information via email.

A friend in need?

Scammers can hack into people’s personal accounts, including emails and social networking sites. A common scam is to log into an account and send emails to friends saying that they are abroad and have been mugged or lost their wallet and are in desperate need of some cash for the flight home etc. The email will often also say that the phone lines are out of services and so you cannot call them.

Never send money if you receive an email like this. You are not helping a friend and you will lose your money.

Trojan Horse
The Trojan horse virus is very common and you will likely have heard of it before. The virus is spread via email and will encourage you to click on a link to a ‘special offer’ or open an attachment.

Trojan horse viruses record your keystrokes, giving the scammer access to all your passwords, including your bank logon details.

Never open attachments or follow links in emails when you do not know who they are from. Keep your antivirus software up to date so that if you do accidentally download a Trojan Horse you will be able to catch it, hopefully before the Trojan horse has a chance to record any of your details.

The Nigerian/419 Scam
This scam involves receiving an email from a so-called businessman in Nigeria or African country. The businessman will say that he wants to move a large amount of money into your bank account, to get it out of the country. In order to compensate you for doing this, you will be able to keep a large percentage of that cash – as long as you cover the initial fees.

If you receive an email like this, delete it. You should never give out your bank details, especially to strangers. You will not make any money from agreeing to do this and you are more likely to end up losing all the money in your account.

The Lottery Scam
You receive an email telling you that you have won a large amount of money. Great news, apart from you haven’t entered in their lottery/competition/survey etc. When you call to claim your winnings however, you will be advised that you need to pay an administration fee first.

Predictably, you will lose your money and never see your supposed win.

Economy Related Scams

With the credit crunch still affecting the economy, this is likely to be a scam that is well spread.
If you’re struggling with debt, you may receive an email from a debt company claiming to be able to buy your debts from you and minimise your monthly repayments.

Be aware that it is impossible for any company to buy a debt, without the lenders permission. You may think that your debt has been bought, but you will still owe money to your original lender as well as paying out to the fake debt company. If you fail to keep up repayments with your lender this could put you in a worsened situation and affect your credit rating as you default on payments.
Fake websites selling fake items

Many websites will be set up to look as though they are based in the UK. However, it is possible to buy a co.uk domain for very little and so the sites may be based outside the UK.

You may end up buying not only fake, but sometimes unsafe goods such as electrical items that have not been properly tested.

Don’t judge your decision on buying an item on the domain name alone, you may think that it is a UK site but this doesn’t mean that it is and therefore you may not be buying goods that are up to a safe standard.

The Online Dating Scam

The internet is a fickle place. It’s very easy for scammers to set up an attractive profile on a dating site and then try to lure you into parting with your personal details.

A common variation of this scam is to pretend that they are from the UK but working abroad, or that they live abroad. After forging a friendship with a user, the scammer will say that they really want to come to the UK to meet you, but they can’t afford the flight, hotel costs etc. Or perhaps he/she has been mugged or beaten up and cannot afford the medical costs.

Either way, you will be asked to help and to give your bank details. Never give these out to a stranger, even if you feel that you may have forged a relationship with them just remember that you have never met them and if this sounds familiar then it is likely to be a scam.

Natural Disaster Relief Fund

In the wake of a natural disaster it is likely that charities will ask for people to help and donate. However, be wary of receiving an email which will send you a link to a site where you can donate.
Charities are unlikely to ask for your bank details in an email. You can verify whether a charity site is real by visiting http://www.charity-commission.gov.uk/ which has a list of all registered charities.
Auction Site fraud

If you are looking to buy something online, you might consider using an auction or marketplace site such as eBay or Amazon.

Scammers will often auction an item on one of these sites and make it look as they reside in the UK. However, the scammer will then contact the winner of the auction and say that they are currently out of the country and ask if is it possible to wire the money by MoneyGram, Western Union or bank transfer.
By using these services, it is usually very difficult to trace the money and so it will be unrecoverable in the case of a scam. You will end up losing your money for the item and you will never receive the item itself.

You’ve probably also thought to yourself on more than one occasion “who actually buys this stuff?” Of course, there must be somebody who responds to these messages, that’s why you’re getting them right?

Well yes. Last week a survey revealed that as many as one in three people have responded to a spam email message at some stage, with 12% of those who did respond doing so knowing that the message was an unsolicited ‘spam’ advertisement.

Spam is huge business, even if the response rate is pitifully low and with spam filters than come packaged with many antivirus software packages filtering out significant amounts of malicious emails, many spammers are generating revenues well into seven figures.

In November 2008, researchers from the University of California in San Diego found that even with a response rate of 0.00001%, spammers could generate sales in excess of $1million. As part of their own research, the university used a now defunct spam network to send 350m spam emails, generating only 28 “sales” and $2,731.88. The researchers concluded that running a larger scale campaign could have generated annual sales of as much as $3.5m.

Those figures also don’t take into account other forms of spam – most notably phishing scams designed to steal a victim’s personal identity which can prove even more lucrative and can generate even higher responses.

Email spam is either outlawed or severely restricted throughout the European Union and at least 19 other nations, with the biggest offenders in the US receiving multi-million dollar fines and even prison sentences, so why has nobody been able to stop it?

Well, the complexities of international law don’t help. There’s little to stop the most determined spammers moving to territories where email communications are either poorly restricted or where regulations are poorly enforced.

Other factors are down to the simplicity in which spam email campaigns can be launched. Most spam is distributed from networks of hacker-controlled computers known as “botnets”. These networks are often made up of PCs that have previously been affected by a virus or worm and are used to automatically relay spam messages, allowing the spammer to increase the reach of their advertisement with very minimal effort.

Unfortunately, spam is unlikely to ever go away completely. All that the average user can do is wise themselves up to the tricks that spammers use, install antivirus software that includes a spam filter and watch out for any emails that look untrustworthy.

Whilst the majority of users claimed to have responded to junk email advertisements by accident or through curiosity, a surprising 12% of the 800 “ordinary computer users” surveyed admitted to responding to an email because they were genuinely interested in the product or service being advertised.

The survey by the Messaging Anti-Abuse Working Group (MAAWG), also found that four in five consumers did not believe it was likely that their PC’s could become infected with malware as a result of responding to spam emails, despite growing exposure over the problem.

Half of those surveyed claimed that they have never clicked on suspected spam although around one in five (21 per cent) admitted that they did not have any email filtering software or services.

The problems of malware distribution through spam has seen increased exposure in recent months, with spammers seeking to use social media platforms as opposed to email in an attempt to avoid anti-spam filters found in many antivirus software packages.

David Ferris, an analyst at Ferris Research, commented: “According to the MAAWG findings, about one in six people are prepared to make an effort to report spam and the industry should find more ways to tap into this potential. Conversely, the volume of people who still respond to spam is regrettable, because it’s an economic incentive to spammers.”

Brand protection agency Mark Monitor claims that there has been a marked increase in the number of phishing attacks masquerading as leading financial brands in an attempt to lure in customers who have been adversely affected by the financial crisis.

The survey found that fraudsters were increasingly targeting some of America’s leading financial institutions for issues such as refinancing, unemployment, remortgaging and property repossession.

The research found what Mark Monitor described as “profound levels of brand abuse” for financial brands, particularly with regards to phishing email scams.

The report found that a record 502 organizations were phished in the first three months of 2009, an increase of 24 percent from the same period last year. Of those, a total of 93 organizations were phished for the first time with 82% being financial brands.

But while financial services such as banks and other lenders remain a popular target, payment service providers, such as Paypal and Nochex, were the most phished category, making up 42% of total phish attacks.

Unsurprisingly, social networking scams such as those currently prevalent on Twitter and Facebook haven also increased. Social networking scams, which allow fraudsters to bypass the email filtering systems found in many antivirus software packages, increased by a massive 241% in the first three months of 2009 compared with the same period in 2008.

Frederick Felman, chief marketing officer at MarkMonitor, suggested that scammers would continue to target brands which offered them access to the most vulnerable users.

“Scammers are preying upon consumer hardship, demonstrating incredible creativity in combining technology, social engineering techniques and current events,” said Mr Felman. “In this digital age, as the Internet pervades business and leisure, scam artists and fraudsters are quick to profit at the expense of trusted brands across a wide spectrum of industries.”

Jackson, 50, died suddenly following a cardiac arrest at his home in California yesterday and was pronounced dead at a Los Angeles hospital at around 2:26pm local time.

Worldwide interest in the news surrounding Jackson increased dramatically, with Google, Yahoo, Facebook, Twitter and major news agencies including CNN, the BBC and MSNBC all reportedly struggling to cope with a surge in online traffic.

As the news broke, those who entered the singer’s name into Google were met with an error message stating “your query looks similar to automated requests from a computer virus or spyware application”.

And security experts are warning computer users that spammers and fraudsters will seek to capitalise on the interest in Jackson with a series of attempts to distribute computer viruses and spyware via email.

In the past, such attacks have surfaced following the 2005 terrorist attacks in London, Hurricane Katrina, the Asian tsunami of 2004, the execution of Saddam Hussein and more recently the crash of Air France flight 447.

Similar attacks are also expected following the death of former Charlie’s Angels actress Farrah Fawcett.

Mark Hofman of the Internet Storm Center claimed that it would be “only a matter of hours before we will start seeing SPAM relating to the subject.”

Michael Jackson fans who have previously bought tickets for his upcoming 50-date residency at London’s O2 Arena are being warned to be particularly wary of phishing emails seemingly offering refunds on tickets. Those who receive emails are advised that at no point should the concert promoter or your ticket agency require ticket holders to enter credit card or bank details in order to process refunds.

It is envisaged that those who ordered tickets either online or over the phone will see their refunds processed automatically. Both the O2 Arena and Ticketmaster UK have pledged to announce details on how to obtain refunds in due course.

Reports in the Sydney Morning Herald told of how Karina Wells of Sydney, Australia was approached by her “friend” Adrian, claiming to be stranded in Lagos, Nigeria and in need of $500 to pay for a return flight.

The message was however sent by a would-be fraudster who had stolen Adrian’s Facebook account details via what is believed to be a seperate phishing or malware attack.

The scammer instructed Wells to deposit the money in a Western Union money transfer account, but was foiled when Wells convinced them into disclosing further details.

Wells claimed that whilst the scammers used “relatively good English”, her suspicions were raised when the message used the term “cell” as opposed to the more common local term of “mobile phone”.

Wells continued in dialogue with the fraudster, obtaining further information, including their Western Union account numbers, before passing on details of the scam to the police.

“Naturally I was concerned as, to all intents and purposes, this seemed to be legitimate,” she told the Sydney Morning Herald.

“I pretended that I would help, obtained all the details of where he was and forwarded them to both Facebook and the relevant authorities.”

The scam, which is a variation of the common “419 scam” that is widely associated with Nigeria, is one of many currently being used to distribute malware or extort money via social networking sites such as Facebook, Myspace and Bebo.

Typically, the victim receives a Facebook message from a friend with a subject such as “LOL. You’ve been catched on hidden cam, yo” or “Nice dancing! Shouldn’t you be ashamed?”

The body of the message contains a video clip link that appears to go to a legitimate site such as Facebook or YouTube but, when clicked on, it takes the user to a bogus web page.

Before the users can play the video they are told they need to download a video player upgrade, which is in fact a password-stealing virus.

The stolen account details are then used to contact the users friends with requests for money, or to further distribute malicious software.

In September security firm WebSense reported on spam emails, seeming sent from an @facebookmail.com address, that tell the victim they have received an invitation from Facebook to add a friend.