Internet fraud complaints triple in 2002

The FBI's Net fraud unit says it referred 48,000 complaints to law enforcement last year, with both the number of fraud cases and the dollar loss associated with them more than tripling.

Paul Festa Staff Writer, CNET News.com
Paul Festa
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Paul Festa
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The FBI's Internet fraud unit said the number of complaints it referred to law enforcement authorities tripled last year, as did the cost of fraud to victims.

The bureau's Internet Fraud Complaint Center (IFCC), which launched in May 2000 and is managed in part by the National White Collar Crime Center (NW3C), said it referred 48,252 complaints out of the 75,063 it received last year. That's nearly three times the 16,775 complaints it referred in 2001.

The monetary loss associated with the fraud more than tripled, to $54 million from $17 million, in the same period.

"The IFCC helps victims by putting fraud information into the hands of law enforcement and then fosters interagency cooperation so these complaints are responded to quickly," said Jana Monroe, assistant director of the FBI's Cyber Division, in a statement.

Auction fraud led the pack, as it did in 2001 and 2000, accounting for 46 percent of complaints the unit referred to law enforcement in 2002. Online auctioneers have been the target of numerous fraud schemes, ranging from shill bidding, in which sellers bid on their own auctions to artificially jack up the price, to identity-theft schemes.

The matter of online-auction fraud has attracted the attention of the U.S. Congress.

Instances of nondelivered merchandise and nonpayment made up 31 percent of referred complaints, and credit card or debit card fraud came in third with just shy of 12 percent.

Median monetary losses were highest for those complaining about the notorious Nigerian letter fraud--they lost $3,864. People who claimed to be victims of identity theft lost an average of $2,000, and those who suffered check fraud lost a median of $1,100.

The problem of identity theft has increased along with the growth of the Internet. Instances of identity theft rose 73 percent in 2002 compared with 2001, according to a January report by the Federal Trade Commission, and topped the list of consumer complaints made to the FTC in 2002.

Most victims of fraud referred by the IFCC resided in California, New York, Florida, Texas and Illinois. Fraud perpetrators, when identified, lived in the same states except in the cases of Texas and Pennsylvania.

In 2002, the fraud center also referred to other agencies and bureaus 36,920 complaints about child porn, computer intrusion, spam and other alleged crimes.