The total value of Internet fraud cases reported last year to the Internet Crime Complaint Center rose 10.5% year over year to $264.6 million, as the volume of cases reported to the agency’s web site rose 33.1% to 275,284, the agency says in its 2008 Internet Crime Report.
The most common source of fraud complaints was non-delivery of merchandise or non-delivery of payment, at 32.9% of complaints, followed by auction fraud, 25.5%; credit/debit card fraud, 9%; confidence fraud such as Ponzi schemes, 7.9%; computer fraud, 6.2%; check fraud, 5.4%; Nigerian letter fraud, 2.8%; identify theft, 2.5%; financial institution fraud, 2.2%, and criminal threats, 1.9%. Ponzi schemes are usually based on investment scams that reward some investors with funds collected from new investors.
The Internet Crime Complaint Center, commonly called IC3, notes that some of its data may be skewed by the tendency of some complainants to report fraud in overly broad terms. “In reviewing statistics contained in this report, it is recognized that consumers may characterize crime problems with an easier broad character, which may be misleading,” the report says.
For example, consumers who had been lured by an e-mail phishing scam to a fake eBay site may incorrectly report the subsequent theft of their credit card account information as an act of auction fraud, the report says. “In such scenarios, many complainants have depicted schemes such as auction fraud even though that label may be incomplete or misleading,” the report says. To help counteract misleading complaints, the IC3 has launched a public web site, LooksTooGoodToBeTrue.com, where consumers can get advice about how to recognize the different forms of online fraud.
The IC3 also notes that the some of the increase in complaints last year may also be related to increased efforts on the part e-commerce sites to make it easier for visitors to report suspected fraud. “As part of these efforts, eBay and other companies have provided guidance and/or links for their customers to the IC3 web site,” the report says. “This activity has no doubt also contributed to an increase in referrals regarding schemes depicted as auction fraud.”
The report notes that the U.S. is the largest source of crime perpetrators for complaints with a reported location, with 66.1%, followed by the U.K., 10.5%; Nigeria, 7.5%; Canada, 3.1% and China, 1.6%. Within the U.S. 75% of perpetrators are male and come from either California, Florida, New York, Texas, the District of Columbia or the state of Washington. The top 10 locations by share of perpetrators are California, 15.8%; New York, 9.5%; Florida, 9.4%; Texas, 6.4%; Washington, D.C., 5.2%; Washington state, 3.9%; Illinois, 3.3%; Georgia, 3.1%; New Jersey, 2.8%; and Arizona, 2.6%.
The IC3, which refers complaints to law enforcement agencies, was organized in 2000 by the Federal Bureau of Investigation and the National White Collar Crime Center.
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