CHAPTER 1

INTRODUCTION

a. BACKGROUND OF THE STUDY

Internet has developed to be one of the most useful ways in making things
easier than before. It has been widely used nowadays for different purposes, by
almost all of the people in their day to day living and transactions.
Internet is used as a medium for communication, financial transactions,
online shopping, job searching, social networking and many more other uses. Its
advantages are endless, considering how much time and effort each users are able
to save when relying on the internet than manually performing the work that
needs to be done. Like any other things, internet has also its disadvantages. As
internet users and internet dependence continuously increases, crimes relating to
its use also increases. A numerous number of internet frauds have emerged and
have caught the attention of the authorities.
To name a few of the emerging online scams, to wit: [1]
1. Sulit Laptop Scam - seller will receive an email that he needs to ship
the laptop to Nigeria. Buyer then tell you that the payment will be
coming once you sent the laptop to a certain address that they will
provide.
2. Paypal Conversion Scam with those ads posted on Sulit, sellers will
claim to buy your PayPal funds with a given exchange rate. They

usually ask you to buy from them online, and in exchange you get the
conversion of your PayPal funds. Once youve purchased an item from
them online, they will deactivate their Sulit Account, along with your
line of communication.
3. Dating Scams Online - some scammers take advantage of dating
online sites, asking money from others. Some ask money from the
victims in order to buy a webcam or for them to pay for some sick
relative. This goes on until by the end of it all, these scammers would
ask their victim to send money via Western Union, and other money
transfer means.
4. MLM/Networking Scams - scammers state that they are looking for a
business partner who they can share their blessings with. Once you
are there, you will be offered products with exorbitant prices that you
then have to sell. It is also common that they use legit testimonials
or even name drop celebrities to attest to their products effectiveness.
Also, it is common that they show off success stories of people who
stayed with them, who now drive a nice car.
5. Work-at-home Scam scammers dont say that you will be the one
buying the supplies, paying for the newspaper ads, and doing all the
trouble for a minimal pay.
6. Auction Scams - buyer get an item that is not exactly what is
described.
7. Phishing Emails - an email will be received by an internet user where
he is told that something went wrong with their bank account. The
email looks legit from the logos to the way the sentences were
constructed; everything seemed to come from legitimate sources.

However, when the user get to the link, he will be asked to enter his
information data. This is how they get your money.
8. Fund Transfer Scam - an email received, tells a user about a story that
he needs an accomplice in order to launder huge amounts of money.
According to the email, it is worth millions. But the user need to come
up with an initial fee that will be used to finalize the transaction, such
as bribe people who needs to be bribed. Paying upfront, the user will
never get the money that he was going to get.
9. Congratulations Scam - an email telling you youve won an item. It
could be an iPod, Xbox, or a PS4. User will be told that he won via
electronic raffle and his email has been picked. To claim the prize, user
have to go to a certain website where he have to fill in his debit card or
bank information in his address. He get unexplained charges from
different parts of the world without receiving any prize.
10. Wi-fi Hot Spot Scam - People love to connect to a free Wi-Fi
connection. What most people do not know is that these connections
leave you vulnerable to hackers. They could be mining your credit
card information when you log on to those Wi-Fi connections.

These crimes should not be ignored and therefore, internet users should be
given ample protection.
The Philippines is on its continuous improvement of the laws that shall
govern internet frauds. This research will focus on the specific types of internet
frauds circulating on the growing online market. The laws, rules and regulations
that currently govern online or internet transactions include but is not limited to:

the Electronic Commerce Act of 2000 (R.A No. 8792), Implementing Rules and
Regulations of R.A No. 8792, DTI-DOH-DA Joint Department Administrative
Order (JDAO) No. 1 and the Cybercrime Prevention Act (R.A No. 10175).

b. THEORETICAL FRAMEWORK
In this new age of the world where everything is made possible through
the
use of internet, it is just and fair to provide means of protection for all of its users.
People are becoming more and more dependent to the use of internet which starts
to change everyday transactions. The introduction of the Internet to businesses
opened a lot of opportunities to people on different walks of life. From businesses
on a big or small scale, those maintaining online shops and sites and to their
respective clients, users and buyers, Internet has been of great help.
The eruption of Internet use comes with a side effect. It does not only
bring on the good but also a downside. It has been observed that anyone
connected to the Internet can fall victim to a crime of offense committed thru its
use. Crimes simultaneously develop with the modern technology and no one can
be immune from it without proper knowledge for protection.
According to the PNP-ACG, the Philippines continues to face the
challenge of effectively addressing the problem of illegal cyber activity and
cybercrime victimization, a challenge it shares among developing countries in
South East Asia and in other parts of the world. Internet fraud in the Philippines is
currently on the rise, Filipinos and foreigners alike are not safe on both sides of

the fence whether as a suspect or a victim. Businesses from micro to multinationals are also affected and to put it bluntly, everyone will be affected.

c. STATEMENT OF THE PROBLEM

Cybercrime is a very broad topic which involves crimes committed thru
the
use of computers or any devices which are capable of processing data that can be
connected through the use of internet. These data, once acquired by a person who
is not entitled thereto, may be used as a tool in the commission of a cybercrime.
The number of victims falling prey to this high technology crimes continuously
increases to which any person, who are already Internet dependent, are very
vulnerable.
The researcher aims to study the different kinds of Internet frauds in
connection with online transactions that are now being used by cyber space
criminals in order to take advantage of the comfort and convenience of its use and
patronage which results to the detriment of its users.

Specifically, the researcher initiates to answer the following guide

questions, to wit:
1. Are internet users aware of the existing laws covering crimes
committed online to defraud them?
2. To what extent are internet users prone to these kinds of crime?
3. What are the needed measures to boost protection of increase usage of
Internet by consumers and producers?

d. SCOPE AND DELIMITATION

The coverage of this thesis focuses on the posed threats for both buyers
and
the sellers in their increased patronage of the online marketplace. The study will
emphasize and develop a deeper understanding of the existing laws concerning
cybercrimes for the increase protection of consumers and producers. This study
also aims to show the effects of online threats to businesses in an increasing
number of Filipino users.
The study will be conducted in different parts of the Philippines.
Respondents to the survey will be coming mainly from Metro Manila and nearby
provinces.
e. SIGNIFICANCE OF THE STUDY
The researcher believes that the study will be most beneficial towards a
greater public nowadays since most of the people are inclined in using the internet
medium in their day to day activities and transactions.
Further study involving internet frauds shall be conducted more aptly to
ensure that online users are safely protected against online threats. This study will
help in proposing recommendations on how Philippine online facilities be
developed, strengthened and broadened keeping in mind that protection of its
users as its top priority. This will benefit a greater public because readers will be
able to get insights as to what they should do, who to contact if faced with an
apparent attempt of online fraud.
f. OPERATIONAL DEFINITION OF TERMS
1. Access instruction, communication with, storing data in, retrieving data

from, or otherwise making use of any resources of a computer system or

communication network.
2. Communication - transmission of information through ICT media,
including voice, video and other forms of data.
3. Computer electronic, magnetic, optical, electrochemical, or other data
processing or communications device, or grouping of such devices, capable of
performing logical, arithmetic, routing, or storage functions and which includes
any storage facility or equipment or communications facility or equipment
directly related to or operating in conjunction with such device. It covers any type
of computer device including devices with data processing capabilities like
mobile phones, smart phones, computer networks and other devices connected to
the internet.
4. Cyber - a computer or a computer network, the electronic medium in
which
online communication takes place.
5. Cyber security collection of tools, policies, risk management
approaches,
actions, training, best practices, assurance and technologies that can be used to
protect the cyber environment and organization and users assets.
6. Electronic Data Message information generated, sent, received or stored
by electronic, optical or similar means.
7. Internet Fraud crime in which the perpetrator develops a scheme using

one or more elements of the Internet to deprive a person of property or any

interest, estate, or right by a false representation of a matter of fact, whether by
providing misleading information or by concealment of information.
8. National Cyber Security Plan a comprehensive plan of actions designed
to improve the security and enhance cyber resilience of infrastructures and
services. It is a top-down approach to cyber security that contains broad policy
statement and establishes a set of national objectives and priorities that should be
achieved within a specific timeframe.
9. Online marketing a set of powerful tools and methodologies used for
promoting products and services through the Internet.
10. Service provider (a.) any public or private entity that provides to users of
its service the ability to communicate by means of a computer system; and (b.)
any other entity that processes or stores computer data on behalf of such
communication service or users of such service.