FBI Reports Huge Spike In Internet Crime Complaints
Complaints of Internet crime rose 33 percent last year over the previous year, the first increase in three years, according to a report released Monday by the Internet Crime Complaint Center (IC3), run by the FBI and the National White Collar Crime Center.
There were 275,284 reports of Internet crime in 2008, up from 206,884 in 2007, the annual IC3 report said. Total year-over-year dollar losses increased 10.8 percent in 2008, reaching a record high of $264.6 million, with an average individual loss of $931. In 2007, losses were $239.1 million, dwarfing the $18 million in losses seen in 2001.
The majority of the Internet crime reports came from the U.S., which represented 66 percent of complaints referred to authorities, followed by the U.K. at 11 percent, Nigeria 7.5 percent, Canada 3 percent and China 1.6 percent. The bulk of the U.S. scams (16 percent) originated in California, followed by New York and Florida.
This year is expected to see even more reports of Internet fraud. Indeed, in March alone, the number of complaints reported to U.S. authorities jumped by 50 percent.
"2009 is shaping up to be a very busy year in terms of cyber-crime," said John Kane, managing director of the National White Collar Crime Center in Richmond, Virginia and the report’s author, during a conference call with reporters.
Non-delivery of merchandise was the most common complaint last year, followed by auction fraud, credit card fraud and investment hoaxes, the report said.
Roughly 72,940 of the 275,284 complaints received by the center in 2008 were ultimately referred to U.S. law enforcement agencies for prosecution.  Those referrals have surged to 40,000 in the first quarter of this year alone, Kane said.
"It is our belief that these numbers, both the complaints filed and the dollars, represent just a small tip of the iceberg," he said.
"Our own research suggests that as few as 15 percent of cases of cyber-fraud are being reported to crime control agencies.”
Fraudulent sales on sites like eBay and craigslist.com contributed to a 32 percent increase in complaints of non-delivery of promised merchandise, which represented 33 percent of all Internet fraud complaints serious enough for referral to law enforcement.
Other significant areas included investment hoaxes, such as ponzi schemes in which money from new investors is used to pay existing investors.Â
About three-quarters of the scams last year took place via e-mail solicitations, especially spam, while 29 percent used Web sites. However, Kane said criminals are increasingly using new technologies such as social networking sites and instant messenger services to propagate their scams.
The report highlighted a new and "significant’ identity-theft scam, in which scammers send e-mail messages with the appearance of originating from the FBI. The messages ask victims for bank account information to assist in investigations of money being transferred to Nigeria. Recipients are told they could be rewarded very richly for their cooperation.
Nearly 80 percent of the known perpetrators of Internet crime are male, and roughly half of those bringing complaints are between the ages of 30 and 50, the report said. The median loss per complaint was $931. However, the median loss per complaint was $2000 for investment hoaxes, and $3000 for check fraud.
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