by Mike Masnick

Does Fraud Threaten The Foundations Of The Economy?

from the might-be-a-bit...-extreme... dept

It sounds pretty scary. After all, you have a Secret Service person claiming that as online scams and frauds get more sophisticated, it could threaten our very economy. This might be a bit overblown, however. While it is clear that online scams are popular, and getting more sophisticated, it's still quite a leap to suggest that they're putting the entire economy at risk. In fact, if you look at how much money is being brought in by computer security people (or being invested in them) you might get the sense that all of this fear mongering about online security threats is actually helping portions of the economy. Not to downplay the risks associated with sophisticated attacks on our financial institutions, but it seems like this claim may be a bit overblown right now.

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  • identicon
    dorpus, 18 Feb 2005 @ 11:31am

    Which country?

    There are countries whose economies were destroyed by fraud. In the wake of the Cold War, ponzi schemes went around Albania, and gullible post-socialist Albanians depleted their savings. Back at the turn of the century, the French invested vast sums in the Panama Canal, encouraging many individual investors to "serve their patriotic duty", but the project went bust, and Americans took over. It severely damaged the French economy at the time. Some "bankers" in African countries today run a lucrative trade hauling suitcases full of strange banknotes from country to country. In the South Pacific, the private-sector economies of Nauru and Tuvalu consist largely of fradulent mail-order businesses or web hosting of porn sites. About 99% of Japanese porn sites are hosted out of the two islands. If there was concerted international action to crack down on them, you'd have islands full of refugees with flies buzzing around their eyes -- then it's the turn of "charity" hucksters to cash in on such imagery.

    reply to this | link to this | view in chronology ]

  • identicon
    Mark R Coppock, 19 Feb 2005 @ 8:12am

    Economic advantage from fraud?

    There's no economic advantage from fraud merely because some security firms are gaining revenue from combatting it. The money that is spent on overcoming a destructive force, like fraud (or a hurricane), is money that could have been spend on something productive.

    reply to this | link to this | view in chronology ]

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