(CNN) - Computer hacking was once the realm of curious teenagers. It's now the arena of government spies, professional thieves and soldiers of fortune.

Today, it's all about the money. That's why Chinese hackers broke into Lockheed Martin and stole the blueprints to the trillion-dollar F-35 fighter jet. It's also why Russian hackers have sneaked into Western oil and gas companies for years.

The stakes are higher, too. In 2010, hackers slipped a "digital bomb" into the Nasdaq that nearly sabotaged the stock market. In 2012, Iran ruined 30,000 computers at Saudi oil producer Aramco.

And think of the immense (and yet undisclosed) damage from North Korea's cyberattack on Sony Pictures last year. Computers were destroyed, executives' embarrassing emails were exposed, and the entire movie studio was thrown into chaos.

It wasn't always this way. Hacking actually has some pretty innocent and harmless beginnings.

Curiosity created the hacker

The whole concept of "hacking" sprouted from the Massachusetts Institute of Technology nearly 50 years ago. Computer science students there borrowed the term from a group of model train enthusiasts who "hacked" electric train tracks and switches in 1969 to improve performance.

These new hackers were already figuring out how to alter computer software and hardware to speed it up, even as the scientists at AT&T Bell Labs were developing UNIX, one of the world's first major operating systems.

Hacking became the art of figuring out unique solutions. It takes an insatiable curiosity about how things work; hackers wanted to make technology work better, or differently. They were not inherently good or bad, just clever.

In that sense, the first generations of true hackers were "phreakers," a bunch of American punks who toyed with the nation's telephone system. In 1971, they discovered that if you whistle at a certain high-pitched tone, 2600-hertz, you could access AT&T's long-distance switching system.

They would make international phone calls, just for the fun of it, to explore how the telephone network was set up.

This was low-fi stuff. The most famous phreaker, John Draper (aka "Cap'n Crunch) earned his nickname because he realized the toy whistle given away in cereal boxes emitted just the right tone. This trained engineer took that concept to the next level by building a custom "blue box" to make those free calls.

This surreptitious little box was such a novel idea that young engineers Steve Wozniak and Steve Jobs started building and selling it themselves. These are the guys who would later go on to start Apple.

Wire fraud spiked, and the FBI cracked down on phreakers and their blue boxes. The laws didn't quite fit, though. Kids were charged with making harassing phone calls and the like. But federal agents couldn't halt this phenomenon.

A tech-savvy, inquisitive and slightly anti-authoritarian community had been born.

A new wave of hackers

The next generation came in the early 1980s, as people bought personal computers for their homes and hooked them up to the telephone network. The Web wasn't yet alive, but computers could still talk to one another.

This was the golden age of hacking. These curious kids tapped into whatever computer system they could find just to explore. Some broke into computer networks at companies. Others told printers at hospitals hundreds of miles away to just spit out paper. And the first digital hangouts came into being. Hackers met on text-only bulletin board systems to talk about phreaking, share computer passwords and tips.

The 1983 movie "War Games" depicted this very thing, only the implications were disastrous. In it, a teenager in Washington state accidentally taps into a military computer and nearly brings the world to nuclear war. It's no surprise, then, that the FBI was on high alert that year, and arrested six teenagers in Milwaukee - who called themselves the 414s, after their area code - when they tapped into the Los Alamos National Laboratory, a nuclear weapon research facility.

Nationwide fears led the U.S. Congress to pass the Computer Fraud and Abuse Act in 1986. Breaking into computer systems was now a crime of its own.

The damage of hacking started getting more serious, too. In 1988, the government's ARPAnet, the earliest version of the Internet, got jammed when a Cornell University graduate student, curious about the network's size, created a self-replicating software worm that multiplied too quickly.

The next year, a few German hackers working for the Russian KGB were caught breaking into the Pentagon. In 1990, hacker Kevin Poulsen rigged a Los Angeles radio station's phone system to win a Porsche, only to be arrested afterward.

The cat-and-mouse game between law enforcement and hackers continued throughout the 1990s. Some hacked for money. Russian mathematician Vladimir Levin was caught stealing $10 million from Citibank. Others did it for revenge. Tim Lloyd wiped the computers at Omega Engineering in New Jersey after he was fired.

But hacks were still more of an annoyance than anything devastating, though it was quickly becoming apparent that the potential was there. The stock market, hospitals, credit card transactions - everything was running on computers now. There was a bone-chilling moment when a ragtag group of hackers calling themselves L0pht testified before Congress in 1998 and said they could shut down the Internet in 30 minutes.

The danger was suddenly more real than ever.

From curiosity to criminal

The ethos was starting to change, too. Previously, hackers broke into computers and networks because they were curious and those tools were inaccessible. The Web changed that, putting all that stuff at everyone's fingertips. Money became the driving force behind hacks, said C. Thomas, a member of L0pht who is known internationally as the hacker "Space Rogue."

An unpatched bug in Windows could let a hacker enter a bank, or a foreign government office. Mafias and governments were willing to pay top dollar for this entry point. A totally different kind of black market started to grow.

The best proof came in 2003, when Microsoft started offering a $5 million bounty on hackers attacking Windows.

"It's no longer a quest for information and knowledge by exploring networks. It's about dollars," Thomas said. "Researchers are no longer motivated to get stuff fixed. Now, they say, 'I'm going to go looking for bugs to get a paycheck - and sell this bug to a government.' "

Loosely affiliated amateurs were replaced by well-paid, trained professionals. By the mid-2000s, hacking belonged to organized crime, governments and hacktivists.

First, crime: Hackers around the world wrote malicious software (malware) to hijack tens of thousands of computers, using their processing power to generate spam. They wrote banking trojans to steal website login credentials.

Hacking payment systems turned out to be insanely lucrative, too. Albert Gonzalez's theft of 94 million credit cards from the company TJX in 2007 proved to be a precursor to later retailer data breaches, like Target, Home Depot and many more.

Then there's government. When the United States wanted to sabotage the Iranian nuclear program in 2009, it hacked a development facility and unleashed the most dangerous computer virus the world has ever seen. Stuxnet caused the Iranian lab computers to spin centrifuges out of control.

This was unprecedented: a digital strike with extreme physical consequences.

Similarly, there's proof that Russia used hackers to coordinate its attack on Georgia during a five-day war in 2008, taking out key news and government websites as tanks rolled into those specific cities.

Then there are hacktivists. The populist group Anonymous hacks into police departments to expose officer brutality and floods banks with garbage Internet traffic. A vigilante known as "The Jester" takes down Islamic jihadist websites.

What exists now is a tricky world. The White House gets hacked. Was it the Russian government or Russian nationalists acting on their own? Or freelance agents paid by the government? In the digital realm, attribution is extremely difficult.

Meanwhile, it's easier than ever to become a hacker. Digital weapons go for mere dollars on easily accessible black markets online. Anonymity is a few clicks away with the right software. And there are high-paying jobs in defending companies like Google or JPMorgan Chase - or attacking them.

As a result, law enforcement tolerance for hacking has fallen to zero. In 1999, the hacker Space Rogue exposed how FAO Schwarz's website was leaking consumer email addresses and forced the company to fix it. He was cheered. When Andrew Auernheimer (known as "weev") did the same thing to AT&T in 2010, he spent more than a year in prison until his case was overturned on a technicality.

The days of mere curiosity are over.

With information theft on the rise, it turns out that banks and lenders almost always compensate their customers for fraudulent charges. However, a full half (52%) of financial institutions do so without conducting any kind of investigation into the issue. In Western Europe, the rate is 54%.

Kaspersky Lab, in collaboration with B2B International, recently conducted a global study which shows that nearly a third of institutions consider the implementation costs of security systems to be more expensive than simply repaying the damage due to internet fraud to their customers.

It's a theme that also pervades many organizations that manage online payments: 28% of representatives of financial institutions and 32% of employees of online shops who were questioned are convinced that the total damage caused by cybercrime, including the repayment of the stolen money, would not exceed the cost of implementing appropriate security solutions.

Only 19% of financial institutions and 7% of online firms cite the cost of compensating customer losses in the top three most serious consequences of cyber-fraud.

But, the issue is escalating. According to the Kaspersky Security Network, almost four million users of Kaspersky Lab products have faced in 2013 with financial malware software to steal their money (an increase of 18.6% compared to 2012). In December 2013, several US banks have lost more than $200 million due to loss of personal information of their clients or their credit cards. The total damage is probably much higher, the firm noted, adding that it is clear that the continued growth of cybercrime will irremediably lead to a situation where the costs of refunds that institutions pay will be higher than the protection of financial transactions and compensation budgets.

"Financial institutions should not only accrue large sums of money in their budgets to repay the stolen money to their customers, but also to cover the cost of filings by their customers. The most important is that customers, so when the victims are repaid quickly, there may be shall dream twice before using the services of a bank that fails to ensure that their online accounts are safe. It is therefore better to prevent damage and loss rather than compensate," said Martijn van Lom, CEO of Kaspersky Lab Benelux and Nordic, in a statement. "Customized solutions designed to protect online transactions can reduce the risk of Internet fraud to a minimum. This means that resources earmarked for compensation would be released and could be used in the development of the company. "

Another argument for the use of specialized security solutions is the neglect of clients. A former Kaspersky Lab survey shows that 57% of users take (almost) no account of the security of their online payments, because they think that their bank will do what it takes. This, in turn, increases the risk of becoming the target of cybercriminals.

Durban - Identity theft is rising in South Africa with thieves costing the economy more than R1 billion every year - and KwaZulu-Natal is providing rich pickings for them.

According to a recent study by credit bureau Compuscan, 1 370 cases of identity fraud had been reported to the Southern African Fraud Prevention Service (SAFPS) by the end of April, with 17 percent of incidents occurring in KZN.

Gauteng, South Africa's economic hub, has the highest amount of identity theft (48 percent) followed by KZN and Western Cape (10 percent).

And, according to Compuscan, this hike is likely to continue, with the number expected to rise above 4 000 by the end of the year.

Compuscan director, Frank Lenisa, said the trend was worrying.

"What worries us more is that consumers are often unaware that they have fallen victim to such a crime and this could have a negative knock-on effect in their ability to obtain credit in future," he said.

According to the National Credit Regulator's latest quarterly publication, Credit Bureau Monitor, there were 20.64 million credit-active consumers in South Africa as at the end of last year.

"Each one of these is urged to pay close attention to the threat of fraudulent activity that could affect their credit records," Lenisa said.

Consumers usually only find out they have become victims of identity theft when checking their credit report while applying for a home loan or car finance, he said.

Carol McLoughlin, executive director at SAFPS, a non-profit fraud prevention company, said they worked with its members - comprising all the large banks, retail groups and insurance companies - to track fraud trends with the hope of preventing them.

Her organisation also offers free protection to members of the public who have become victims of identity fraud, as their ID numbers are filed on the SAFPS database under the category "Victims of Impersonation" to give them protection against further attempts at fraud.

"A copy of the innocent victim's ID is scanned in and attached to the record, so that member companies can compare the true victim's ID against the ID of any future applicants (impersonators/fraudsters) who attempt to use this same ID to open accounts and submit claims," she said.

In some instances, the details of the actual impersonator can also be uploaded on to the database.

"For example the fraudster might use his or her own cellphone number and ID photo when applying for a loan or opening an account using an innocent victim's name, ID number and address. These records are filed under the 'Impersonator' category on the database."

McLoughlin could not say why KZN was experiencing the second-highest incidence of identity fraud in the country, but explained that incidents often took place in a different province to where the victim resided.

"Every day we hear about a new type of scam or method being used by fraudsters to gain access to personal information.

"At the end of the day, consumers need to be far more vigilant when giving out their personal information online and must avoid being hoodwinked into clicking on to web links that they receive via SMS and e-mail," she said.

"They must shred unnecessary documents containing personal information and always make sure that they authenticate websites before they fill in online applications and forms."

Compuscan urged people to check their credit report regularly, saying that every South African was entitled to one free credit report annually, according to the National Credit Act.

Despite the amount of credit-active consumers in the country, only about 14 000 request a report from Compuscan each year.

Compuscan has launched a personal online credit report portal called My Credit Check (www.mycreditcheck.co.za) that allows users with valid ID numbers to monitor their complete financial history. Continue reading…

As marketers grow increasingly concerned about the integrity of the online advertising inventory they are buying, a trade group and 30 well-known marketers are forming a coalition to address the problem.

The group, which is being led by the Association of National Advertisers, has hired ad fraud-detection firm WhiteOps to study and help stamp out so-called "bot fraud."

Bots are computers hijacked by viruses that are programmed to visit sites and mimic human behavior, creating the illusion of authentic web traffic in order to lure in advertisers. Bot traffic costs advertisers because marketers typically pay for ads whenever they are loaded in response to users visiting Web pages - regardless of whether the users are actual people.

The ANA said that some marketers estimate that about half the money they spend on digital advertising is wasted because of "bot fraud." With digital ad spending around the globe expected to grow 17% this year to $140 billion, according to eMarketer, the stakes are high.

Ad executives blame the rise of fraudulent traffic on advertisers' increased use of automated software to purchase ads via exchanges, ad networks and other middlemen. Such arrangements, they say, are far less transparent than buying ad space the traditional way by through human salesforces.

The ANA declined to reveal the names of the 30 advertisers participating in the anti-fraud group, but the trade organization's members include blue-chip marketers such as Procter & Gamble, Johnson & Johnson and General Motors.

Starting next month, WhiteOps will track campaigns of the 30 companies for one month and report back the level of bot fraud occurring across the digital advertising industry, including display, video, mobile and social ads. The ad fraud-detection firm will also give advertisers lists of the sites and exchanges that have fraudulent traffic.

Other marketers will be able to use the study as a benchmark to compare their own data on ad fraud with the industry as a whole.

Fears are mounting that marketers will pull back on some online ad spending because of rampant fraud. In response, some publishers and ad companies are trying to address the problem themselves.

Google, for example, acquired Spider.io, a London-based company that specializes in identifying and blocking online-traffic fraud in February. Meanwhile, ad-buying giant GroupM said recently that it would stop buying online ads from "open" ad exchanges entirely by the end of the year, because it is concerned about the quality of ad inventory that's available in these marketplaces and their lack of transparency.

Open exchanges are automated marketplaces through which advertisers buy and sell ads from across the web. Private exchanges, on the other hand, allow marketers to link directly to publishers and media companies.

But advertisers "cannot delegate this to be solved by agencies and publishers, they need to be involved," said Bill Duggan, an executive vice present at the ANA. "Advertisers have the most to lose with bot fraud."

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