4. Internet Crime is Big Business, IUH 2009-12, 2ND Ed, R513A

Author Notes: Reference Copy, links to Original Copy removed due to the Age of the Content. See the top Blog Menu for Copyright Concerns, Some Content Removed.

INTERNET CRIME
Dr. Don, Founder ICFO

4. Internet Crime is Big Business, IUH 2009-12, 2ND Ed, R513A

This Chapter will give you some background to the magnitude of the Growing Internet crime problem. It will introduce you as to how to get started on your journey to understand and recognize the signs of Internet Crime.

The more you understand about these various scams, the more likely that you will be able to avoid being scammed. Scam Avoidance must rank up there with “How do I turn this thing on? And “OK what’s next?”

2008 INTERNET CRIME REPORT

The National White Collar Crime Centre has just released its eighth annual Internet crime report. “In December 2003, the Internet Fraud Complaint Center (IFCC) was renamed the Internet Crime Complaint Centre (IC3) to better reflect the broad character of such criminal matters having a cyber (Internet) nexus. The 2008 Internet Crime Report is the eighth annual compilation of information on complaints received and referred by the IC3 to law enforcement or regulatory agencies for appropriate action.

From January 1, 2008-December 31, 2008, the IC3 website received 275,284 complaint submissions. This is a (33.1%) increase when compared to 2007 when 206,884 complaints were received. These filings were composed of complaints primarily related to fraudulent and non-fraudulent issues on the Internet.

These complaints were composed of many different fraud types such as auction fraud, nondelivery, and credit/debit card fraud as well as non-fraudulent complaints such as computer intrusions, spam/unsolicited email, and child pornography. All of these complaints are accessible to federal, state, and local law enforcement to support active investigations, trend analysis, and public outreach and awareness efforts.

From the submissions, IC3 referred 72,940 complaints of crime to federal, state, and local law enforcement agencies around the country for further consideration. The vast majorities of cases were fraudulent in nature and involved a financial loss on the part of the complainant. The total dollar loss from all referred cases of fraud was $264.6 million with a median dollar loss of $931.00 per complaint. This is up from $239.1 million in total reported losses in 2007.” Posted on 2009 April 1 by BBVM

INTERNET FRAUD, SCAM, AND CRIME STATISTICS – 2009

Statistics regarding Internet scams and frauds are presented here as snapshots in time January 2009, but below are links to archived statistics from previous years. Web crime statistics are notoriously difficult to obtain, with many sources each calculating them in a different manner and different time frame, using a different source.

To provide the most reliable picture, we use the Internet Crime Complaint Center’s (IC3) statistics as a baseline. The IC3 began operation on May 8, 2000, as the Internet Fraud Complaint Center and was established as a partnership between the National White Collar Crime Center (NW3C) and the Federal Bureau of Investigation (FBI) to serve as a vehicle to receive, develop, and refer criminal complaints

regarding the rapidly expanding arena of cybercrime. These statistics have the advantage of the FBI’s expertise, but the weakness of being 1 to 2 years out of date.

To overcome this, we have added our tracking system statistics to update the FBI / IC3 statistics.

BACKGROUND

The statistics for the current Top 10 frauds and scams list can be found below. A description of these scams is on this page. The greatest challenge in assembling a list and statistics of the frauds is that most fall into several categories. Consumers may characterize crime problems with an easier “broad” character, which may be misleading.

For instance, a consumer that gets lured to an auction site which appears to be eBay may later find that they were victimized through a cyber-scheme. The scheme may in fact have involved SPAM, unsolicited email inviting them to a site, and a “spoofed” website which only imitated the true legitimate site. The aforementioned crime problem could be characterized as SPAM, phishing, possible identity theft, credit card fraud or auction fraud. In such scenarios, many complainants have depicted schemes such as auction fraud even though that label may be incomplete or misleading.

The Internet Crime Complaint Center, in 2009 released its latest annual report on victims’ complaints received and referred to law enforcement. From January 1, 2008 – December 31, 2008, the IC3 website received 275,284 complaint submissions. This is a (33.1%) increase when compared to 2007 when 206,884 complaints were received. These filings were composed of complaints primarily related to fraudulent and non-fraudulent issues on the Internet.

These complaints were composed of many different fraud types such as auction fraud, nondelivery, and credit/debit card fraud as well as non-fraudulent complaints such as computer intrusions, spam/unsolicited email, and child pornography. All of these complaints are accessible to federal, state, and local law enforcement to support active investigations, trend analysis, and public outreach and awareness efforts.

From the submissions, IC3 referred 72,940 complaints of crime to federal, state, and local law enforcement agencies around the country for further consideration. The vast majorities of cases were fraudulent in nature and involved a financial loss on the part of the complainant. The total dollar loss from all referred cases of fraud was $264.6 million with a median dollar loss of $931.00 per complaint. This is up from $239.1 million in total reported losses in 2007.

Other significant findings analyses of referrals include:

  • Non-delivered merchandise and/or payment were, by far, the most reported offense, comprising 32.9% of referred complaints.
  • Internet auction fraud accounted for 25.5% of referred complaints. Credit/debit card fraud made up 9.0% of referred complaints.
  • Confidence fraud (“con men”), computer fraud, check fraud, and Nigerian letter fraud (Also called “Advance Fee Fraud” or AFF) round out the top seven categories of complaints referred to law enforcement during the year.

DOLLAR LOSS

  • Reporting a Dollar Loss, The Highest Median Losses Were Found Among Check Fraud ($3,000),
  • Confidence Fraud ($2,000),
  • Nigerian (West African, 419, Advance Fee) Letter Fraud ($1,650)

AMONG PERPETRATORS

  • 77.4% were male and
  • 50% resided in one of the following states: California, New York, Florida, Texas, District of Columbia, and Washington.
  • The majority of reported perpetrators (66.1%) were from the United States; however, a significant number of perpetrators where also located in the United Kingdom, Nigeria, Canada, China, and South Africa.

AMONG COMPLAINANTS

  • 55.4% were male,
  • Nearly half were between the ages of 30 and 50 and one-third resided in one of the four most populated states: California, Florida, Texas, and New York.
  • Males lost more money than females (ratio of $1.69 dollars lost per male to every $1.00 dollar lost per female).
  • This may be a function of both online purchasing differences by gender and the type of fraudulent schemes by which the individuals were victimized.
  • Email (74.0%) and webpages (28.9%) were the two primary mechanisms by which the fraudulent contact took place.
  • For the full report, go to the IC3 webpage on statistics.

2008 PATTERNS

  • In 2008, that ranking has changed considerably – Lottery scams are number 1 followed by Auction scams, non- delivery and check fraud.
  • LOTTERY SCAMS –
  • INTERNET AUCTION FRAUDS –
  • CONFIDENCE – NIGERIAN ADVANCE FEE FRAUDs (AFF) – PHISHING AND PHARMING FOR IDENTITY THEFT – “PASSIVE RESIDUAL INCOME” SCAMS –
  • CHECK (COUNTERFEIT) FRAUDS WORK-AT-HOME SCAMS
  • MATRIX / MULTI-LEVEL MARKETING AND PYRAMID SCHEMES PROPERTY MORTGAGE AND INVESTMENT SCHEMES FINANCIAL INSTITUTIONS SCAMS

FBI INTERNET CRIME REPORT 25/02/2011 [removed]

Thanks for Reading – 4. Internet Crime is Big Business, IUH 2009-12, 2ND Ed, R513A

Dr Don, Founder, ICFO

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