Internet fraud on the rise

There are very few times that I am so taken by a study that I read it cover to cover. But the report that was just released by The Internet Fraud Complaint Center is such a page-turner that I have to share the results with you.

One of the most shocking things uncovered in the report is the tremendous increase in fraud complaints. The number rose from 48,252 complaints reported in 2001 to 75,063 in 2002.  The types of complaints the center receives involve auction fraud, credit/debit card fraud, computer intrusions, unsolicited e-mail and child pornography.

Of those categories, the leader hands-down in was Internet auction fraud. Among the 46% that complained about online auctions, 31% reported nondelivery of merchandise and payment, while 12% were upset about credit/debit card fraud.

Other types of fraud, including investment fraud, business fraud, confidence fraud and identity theft, were also among the leading causes of complaints.

Interestingly, e-mail was the leading mechanism for fraud. I would have thought Web pages, but it trailed e-mail, which came in at 66%, with an 18.7% complaint rate.

The center also collected data on the median losses from fraud and taking first place was the collection of unsolicited e-mail known as the Nigerian letter scam. As part of the scam, recipients of the letter are asked to send funds to overseas bank accounts. Surprisingly, the average dollar loss reported for this scam was $3,864. The overall total from all monetary losses due to fraud was $54 million. And that’s only the ones that were reported.

Now, online auction houses and other organizations that conduct business over the ‘Net will argue that of course the numbers grew by leaps and bounds, so did usage. But one only needs to look at the hassles of liability to realize that trouble is on the way if these numbers continue to surge.

To view the full report: https://www1.ifccfbi.gov/strategy/2002_IFCCReport.pdf