Fraud - technical definition

Fraud may include an omission of facts or an intended failure to state all the facts. Knowledge of the latter would have been needed to make the other statements nonmisleading. In cyber terms, spam is often sent in an effort to defraud another person by getting him or her to purchase something he or she has no intention of purchasing.

Recently in the United States, the Sarbanes-Oxley Act (SOA) was passed as a reaction to the accounting misdeeds of companies such as WorldCom and Enron. With the vast amounts of personal information stored on company computers, fraud opportunities abound for cyber criminals. A major problem prompting the passage of this Act was that companies storing huge amounts of information have tended to give little thought to what is being stored, or how securely it is being shared. Consequently, occasional occurrences of fraud or alterations of data by crackers have often gone undetected.

Experts have argued that rather than spend large amounts of money to store data in accordance with the Act, companies should allocate some money to determine exactly what kinds of information need to be stored and for how long. Many companies have policies, for example, dictating that data be stored for periods lasting from six to nine months, but this timeline may not be realistic. Such confusion over this important information storage issue may be a primary reason that the Sarbanes-Oxley Act deadline for companies based in European countries has been pushed back another year. Originally, the controversial Section 404 of the SOA outlined the requirement for companies to archive information by July 15, 2005.

See Also: Accountability; Spam; Spammers.