Friday’s Food for Thought: Snake Oil and the History of Internet Fraud

Welcome to the Friday’s Food for Thought post! We hope everyone had a productive week. Let’s face it. Fraud is something that has been around for a long time. From the old “snake oil” salesman to today’s approaches to actually bilking people via online methods, it is something that most likely will not go away anytime soon. For this week’s Friday’s Food for Thought post, we wanted to focus on the history of fraud and how it ties into what the bad guys are doing in modern times.

The Snake Oil Salesman
Did you know that Snake oil is a traditional Chinese medicine made from the Chinese water snake (Enhydris chinensis), which is used to treat joint pain. However, the most common usage of the phrase is as a derogatory term for compounds offered as medicines that implies that they are fake, fraudulent, quackish, or ineffective. The expression is also applied metaphorically to any product with exaggerated marketing but questionable or unverifiable quality or benefit. Thanks to our friends at Wikipedia, we were able to provide you with this most compelling definition.

History of Fraud in America
Earliest “business” fraud in America centered around phony heath cures. Armstrong and Armstrong (1991) document many of the snake oil ploys that commenced soon after the Pilgrims landed on Plymouth Rock. Medical frauds ranging from deceptive medicines to spiritual cures to bloodletting expanded over time to modern day cancer miracle cures and Internet charlatanism. Since early America was largely agricultural, various land schemes accompanied the growing market for deceptive rural living and farming products. As the original 13 colonies were established land was owned by men who had been granted land from the English King. They in turn sold land to individuals and established common areas. Although many of the early dealings were legitimate, it did not take long for land swindles to commence. Swindlers were either buyers or sellers of land. Victims were often new immigrants and Indians who lived on the land before Colonial times. Pretty interesting, right? Check out more from Bob Jensen of Trinity University here.

The Most Common Forms of Internet Fraud from 1998
Every wonder what were the earliest forms of Internet fraud back in the infancy days of the Internet? We actually found a live link from 1998 from the Internet Fraud Watch that lists out the most common forms of Internet fraud from that year. Web auctions, sales of bogus merchandise, offers for free Internet services, pyramid schemes, and work-at-home plans all topped the list. Of course, most of these things still happen, but stuff like phishing and other scams intended to take your identity did not exist at that point. My how the times have changed. Check out the full list here.

Chronology of Data Breaches
The Privacy Rights Clearinghouse has compiled a complete chronology of all data breaches from 2005 to today. The very first data breach that they documented was a George Mason University where the names, photos, and Social Security numbers of 32,000 students and staff were compromised because of a hacker attack on the university’s main ID server. The most recent one happened three days ago at the Office of Policy and Management in Cincinnati, which involved the theft of personal information — including Social Security numbers, names and addresses — from as many as 11,000 people who had applied for furnace rebate programs with the state. Check out the full site here.

The Snake Oil Brothers Medicine Show
Check out this very funny silent-film inspired video clip of snake oil salesmen. Of course, the end of the film is what is funny – what happens when the shady salesmen drink too much snake oil. You will have to see for yourself. Enjoy!