FBI: Auction fraud tops Net scam list

More than 43 percent of complaints center on auction fraud, the agency says. Victims of the Nigerian Letter scam, identity theft and investment fraud suffer the highest dollar losses.

Margaret Kane Former Staff writer, CNET News
Margaret is a former news editor for CNET News, based in the Boston bureau.
Margaret Kane
2 min read
Online auctions account for the majority of complaints about Internet fraud, according to a new report from the FBI.

The Internet Fraud Complaint Center, a joint operation of the Federal Bureau of Investigation and the National White Collar Crime Center, said Wednesday that auction fraud accounted for nearly 43 percent of the complaints received from victims and referred to law enforcement groups.

Nondeliverable merchandise and nonpayments were the next largest category, accounting for 20.3 percent of complaints. The so-called "http:="" www.fdic.gov="" news="" financial="" fil0064.html"="">Nigerian Letter, a scam in which an alleged Nigerian official seeks help moving money between bank accounts, accounted for almost 15.5 percent of the complaints.

The IFCC, which was launched about a year ago, compiled statistics for all of 2001, gathering some 50,000 complaints. It referred 16,755 Internet fraud complaints to law enforcement or regulatory agencies.

The IFCC said it didn't have a total figure on how much consumers lost to scams, but noted that victims of the Nigerian Letter scam, identity theft and investment fraud suffered the highest dollar losses.

"Fraud committed via the Internet makes investigation and prosecution difficult because the offender and victim may be located thousands of miles apart," said Thomas Richardson, deputy assistant director of the criminal investigative division of the FBI, in a release. "This borderless phenomena is a unique characteristic of Internet crime and is not found with many other types of traditional crime."

The FBI also doesn't see the situation improving anytime soon. The IFCC Web site garnered almost 17.1 million hits over the past year, and officials expect the number of complaints to rise from 1,000 a week to 1,000 a day.

"We know more Internet crime is out there, it's just a matter of victims knowing where to go to report it and then actually reporting it," said Richard Johnston, director of the National White Collar Crime Center, in a statement.