What is the Dark Web and How Does It Work?

Find out why the dark web serves as a breeding ground for fraudsters to steal identities, fake insurance policies, and create fake documents.

By Carla Rodriguez | Dec. 18, 2023 | 5 min. read

The origins of the Dark Web can be traced back to the U.S. Naval research in 2002 when looking for a secure communications channel that couldn’t be monitored. In this article, we are uncovering everything the dark web entails. We will touch on why people use it, who uses it, what it is, and what it means for your information to be on the dark side of the internet.


The Basics of the Dark Web:

To understand the Dark Web, you must first understand its structure. The internet, as we commonly know it, consists of three layers: the surface web, the deep web, and the dark web. The surface web encompasses all websites accessible through search engines, while the deep web includes content that is not indexed by traditional search engines—think private databases, password-protected websites, and academic databases. The dark web is characterized by encryption software that makes the users anonymous. This anonymity is the reason for so much illegal activity on the dark web.

The surface web makes up 6% of the internet, deep web makes up 96%, and the dark web makes up 5%.

Crypto Currencies

The Dark Web is a marketplace for various goods and services, both legal and illegal. One common cryptocurrency that emphasizes the anonymity aspect is Bitcoin. The transactions done using crypto tools are decentralized and difficult to trace. Insurance fraudsters often exploit this feature to trade in stolen personal information, forged documents, and even fraudulent insurance policies.


The Legality of the Dark Web

The dark web is not easy to navigate. It is chaotic and unpredictable. The dark web requires you to use Tor, a browser route operated by volunteers around the world to result in your IP address being untraceable. It’s a place known for its sale of illegal drugs, firearms, social security numbers, pornography, and financial data. The dark web is a playground for people trying to sell or buy stolen identities, credit card details, hacking into streaming services, medical identity theft, fake passports, and anything you can think of that isn’t legal in the real world.

The dark web is legally used by:

Whistleblowers: the CIA has a tor-based site for receiving leaks from sources.
Dissidents of oppressive regimes: for people in China and North Korea using the dark web is the only way for them to communicate with the world.
Journalists: tools such as secure drop have become indispensable for journalists to receive information while their sources stay anonymous.


Combating Cyber Fraud

Insurance companies must protect themselves against data breaches of sensitive customer information. The dark web serves as a breeding ground for fraudsters to steal identities, fake insurance policies, and create fake documents.

In this article by Fortune; during the unemployment disbursements after COVID-19 many states found that a lot of their PUA (pandemic unemployment assistance) claims were fraudulent.

The Labor Department’s inspector general estimates that up to $26 billion of UI payments may have gone to fraudsters.



Fraud Prevention Tools

The way to combat fraudulent activity in the dark web is to have access to it. A knowledgeable investigation company can verify the validity of your claims through a series of services:

  • Photo Analysis technology
  • Monitoring services
  • Internet Mining
  • Social Media Investigations
  • Deep and Dark web searches

Make sure to choose the most extensive list of services from your risk mitigation provider. Making an informed decision begins with the right information.

The sites have different barriers to entry making them not easily accessible for the average person. Another way the dark web can be used for fraud purposes, although indirectly, is its cybercrime services where people can hire experienced hackers.

As tempting as it may be to access the deep web yourself, it comes with risks of viruses, malicious files, and malware getting into your computer.


How it Works

Fraudsters are using everything from fake emails to social media quizzes to steal critical information from unsuspecting victims.

Our information can be stolen from:

  • Social media holds a lot of personal information and scammers may create fake profiles hoping to impersonate people.
  • Malware tricks may be done by sending a link to the victim which then embeds a virus into the device.
  • Hacking your device or a government agency to steal personal information.
  • Stealing bank or credit card statements from your mailbox.
  • Licenses or passports can be used by criminals to create new bank accounts and run up debt.

Any data collected from these schemes is then sold/traded on the dark web. For example, your bank information was stolen after opening a text message about an Amazon package you never ordered. You weren’t sure if maybe someone was shipping you something and wanted to make sure, at this moment your phone was intercepted with a virus. The information then makes its way to the dark web where someone trying to commit credit card fraud buys it for only $120. And after a couple of months, you are seeing charges and new accounts being opened by someone who is not you.


Shedding light on the dark web

The dark web is a great place for criminals who want to hide in the corners of anonymity. We’ve established that it is a subset of the deep web and makes up only 5% of the internet.

A haven for legal and illegal activities that pose a threat to our industry. With a better knowledge of the dark web and its capabilities, you are on the path to uncovering illegitimate claims. You can’t blindly trust the information you are given. It is in your hands to combat fraudulent claims being paid out to criminals using the dark web.

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