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FBI: Internet Fraud Rates Rose 33% Last Year

Internet fraud complaints to the FBI by consumers increased more than 33 percent in 2008 over the previous year, according to figures released this week.

Some 275,284 complaints were filed last year with the Internet Crime Complaint Center (IC3), a partnership between the FBI and the National White Collar Crime Center. In 2007, the IC3 received 206,844 complaints.

The report shows that the nation's capital appears to be home to the largest concentration of online con artists in the country. The District of Columbia ranks #1, just ahead of Nevada and Washington State, in terms of online fraud perpetrators per 100,000 residents, the IC3 found.

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The non-delivery of merchandise and/or payment was by far the most reported offense, accounting for nearly one-third of all referred cases, the IC3 reports. Internet auction fraud made up 25.5 percent of referred complaints, while credit/debit card fraud comprised 9 percent.

The total dollar loss from all 72,940 cases of fraud referred to federal, state and local law enforcement was $246.6 million, with a median dollar loss of $931 per complaint -- up from $239.1 million in total reported losses in 2007. The highest median dollar losses came from check fraud ($3,000), confidence fraud ($2,000), and Nigerian (West African 419) "advance fee" scams ($1,650).

Ironically, many of the victims who reported fraud to the IC3 were taken in by scam e-mails made to appear as though they were sent by the FBI, falsely claiming that the agency needed the recipient's personal and banking data to investigate a pending financial transaction.

"Recipients are told that if they do not comply with the FBI's request for information, they will be prosecuted or suffer some other financial penalty," the IC3 report concludes. "In some cases, recipients are led to believe that they will become the subject of a terrorist investigation if they fail to cooperate."

The full report is available here (PDF).

By Brian Krebs  |  April 2, 2009; 9:00 AM ET
Categories:  Fraud , Safety Tips , U.S. Government  | Tags: 419, fbi, fraud, ic3, online auction  
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Comments

These ads are not only annoying but lack credibility. The draw in losers who spend money they may not have into programs that causes more financial hardship than "Nigerian Scam" letters.

1. Take down the ads from tribalfusion for $12k stimulus checks, which are a joke.

2. Take down the "One Rule, Obey" ads. Obey this- .

3. Wonder weight-loss plans.

Hold the internet advertisers liable, when their clients are putting out patently false data.

Posted by: Computer_Forensics_Expert_Computer_Expert_Witness | April 2, 2009 12:34 PM | Report abuse

They are only showing statistics of reported crimes to IC3. Many crimes are not reported at all, and I don't believe most crimes are reported to IC3. People are more likely to call their local police department, and have them forward the case to the FBI.

"The report shows that the nation's capital appears to be home to the largest concentration of online con artists in the country."

The largest concentration of con artists, or the largest concentration of complaints where the source IP was found to be based in the nation's capital? One man can scam 5,000 people and throw off the results, leading us to believe there were 5,000 scammers.

Out of 72,940 cases of fraud referred to federal, state and local law enforcement, how many arrests were made? Out of the arrests, how many guilty pleas were made, and what was the final outcome of all cases. IC3 needs to get feedback from these referrals. It would be important to know if one person was responsible for 30,000 cases, or 30,000 people were responsible for 72,940 cases. I hope this makes sense.

Posted by: BadSecurity | April 2, 2009 4:46 PM | Report abuse

increase of 33% is big - but what is the increase in online transactions over the same period? 33%? less? more?

If online sales increased by 20% then this problem is not so big. If it dropped by 10% then its an even bigger story.

Also, "internet" is just one channel - what was the change in fraud rate on "in person" or "mail order" transactions over the same period? I wonder if the overall economy is driving fraud rates and not just on the internet.

Posted by: spioter | April 3, 2009 2:47 PM | Report abuse

Spioter,
I love the "channel" thing. Totally sensical...too bad others in this country right now do not have your common sense. Awesome analysis!

Posted by: jaa1169 | April 3, 2009 10:15 PM | Report abuse

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