FBI warns no user is safe from online fraud

The widespread adoption of new technologies has created new opportunities for fraud that any Internet user is susceptible to, a situation made worse by ignorance about the issue, according to a new study released this week.

The top complaint reported was online auction fraud, with nearly 66 per cent of complaints coming in that category and this was followed by non-delivered merchandise or payment at 22 per cent, and credit or debit card fraud at nearly five per cent.

The figures come from the first report on Internet fraud released by the Internet Fraud Complaint Center (IFCC), a partnership between the U.S. Federal Bureau of Investigation (FBI) and the National White Collar Crime Center. The report covers the six-month period from May 8, 2000 to Nov. 8, 2000.

These frauds led to over US$4.6 million in total losses, with the average loss being $894. Despite such a high average amount, only 17 per cent of the losses were over $1,000. The majority of losses totaled less than $500. Investment fraud led to the biggest losses, while auction fraud, despite being the largest culprit percentage-wise, led to the lowest average losses.

The perpetrators of the fraud tend to be male, according to the report, and are overwhelmingly U.S. residents (92 per cent) living in large states; most (17.3 per cent) live in California. The average victim of online fraud also lives in a large and populous state – California, Texas, Florida or New York – is male and between the ages of 30 and 50. The report notes however that women have also fallen prey to online fraud, and that the ages of victims range from 10 to 100.

Over 50 percent of fraud victims are initially contacted by e-mail, with 38 percent of contacts coming via a Web page, the report said. The leading methods of payment in fraud cases are money order and credit card.

The report includes data taken from over 20,000 complaints filed on the IFCC Web site. The report is based on the nearly 6,100 complaints referred to law enforcement by Nov. 8, with the majority of the complaints involving the Internet; not all IFCC complaints involve the Internet.

A copy of the IFCC report is available at http://www.ifccfbi.gov/strategy/6monthreport.pdf. The FBI, in Washington, D.C., can be reached at http://www.fbi.gov. The National White Collar Crime Center is online at http://www.nw3c.org.

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Jim Love, Chief Content Officer, IT World Canada

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