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When Was Canadian Income Tax Introduced

By Richard A. Chapo

Sen. Partick J. Leahy has introduced the Anti-Phishing Act of2005 to Congress for consideration. The Act would allow federalprosecutors to seek fines of up to $250,000 and prison sentencesof up to five years against individuals convicted for promotingphishing scams. Online parody and political speech sites wouldbe excluded from prosecution.

“Phishing” is an online scam used to deceive computer users intogiving up personal information such as social security numbersand passwords. Phishing scams usually involve email messagesrequesting the verification of personal information from afamiliar business. Readers are provided a link that sends themto what appears to be the site of the company in question. Thereader is then asked to verify their account information byproviding their name, address, social security number, accountnumber, etc.

In truth, the site is an illegal copy of the business inquestion and the reader’s information is collected for laterfraudulent use including identity theft. Consumers are estimatedto lose hundreds of millions of dollars a year to phishingscams. Undoubtedly, you have received more than a few of theseemails.

Phishing emails are most likely to use the sites of banks,credit card companies, and large retailers. Online companiessuch as Ebay, PayPal and Earthlink have had similar problems.One particularly aggressive group even scammed the site of theIRS.

In April 2004, the IRS warned consumers that scam artists weresending emails purportedly from the IRS. Consumers receivedemails claiming they were under investigation for tax fraud andsubject to prosecution. The emails contained language tellingrecipients they could “help” the investigation by providing“real” information and directed them to a website that wasderivative of the IRS site. Consumers were then asked to providedetailed personal information to dispute the charge. Since mostpeople fear the IRS, one can assume that a large number ofpeople took the phishing bait.

Commentary

The Anti-Phishing Act of 2005 is a nice start to combating scamartists that use phishing to pilfer money from consumers. TheAct, however, will not put an end to deceptive phishingpractices if it is passed. There reason involves jurisdictionalissues.

A large percentage of the individuals promoting phishing scamsreside outside of the United States. While they may take noticeof the law, it will have no discernible effect on theirfraudulent scams. Until there is an international response,phishing scams will continue to be a problem. Nonetheless,Senator Leahy should be commended for initiating efforts to dealwith this growing problem

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