Internet Crime Hit Highest Levels Ever in 2008

New report documents massive jumps in fraud, complaints

By Lisa Wade McCormick
ConsumerAffairs.com

March 31, 2009

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Internet crime and the financial havoc it plays on consumers' pocketbooks continued to rise in 2008, according to a new report from the Internet Crime Complaint Center (IC3).

The "2008 Internet Crime Report" revealed consumers lost more than $264 million last year to various Internet crimes. That represents a loss of $931 for each of the 274,284 complaints the IC3 received in 2008.

The latest figures also reflect a 33 percent increase in the number of complaints the IC3 received in 2007 — and $25 million jump in losses. In 2007, consumers filed 206,884 complaints with the IC3 and their losses totaled $239 million.

The latest IC3 reports shows scam artists used Web pages and e-mails as the two main vehicles to dupe consumers in Internet crimes.

"This report illustrates that sophisticated computer fraud schemes continue to flourish as financial data migrates to the Internet," said Shawn Henry, assistant director of the Federal Bureau of Investigation's (FBI) Cyber Division.

The IC3 is a partnership between the FBI and the nonprofit National White Collar Crime Center. The organization collects and analyzes data about computer crime and then refers complaints to law enforcement agencies nationwide. The IC3's annual reports are a snapshot of the most common Internet crimes, where they occur, and who is victimized in these schemes.

The report included a breakdown by percentages of the Internet scams that received the most complaints, and the average dollar loss per complaint:

• Non-delivery of merchandise/payment: $800 (32.9%);

• Auction fraud: $610 (25.5%);

• Credit/debit card fraud: $223 (9%);

• Confidence fraud: $2,000 (7.9%)

• Computer fraud: $1,000 (6.2%)

• Check fraud: $3,000 (5.4%)

• Nigerian letter fraud: $1,650 (2.8%)

Other highlights of the IC3's 2008 report reveal:

• 77.4 percent of the perpetrators identified in the IC3's complaints were male. Half of those perpetrators lived in California, New York, Florida, Texas, and the District of Columbia. The report, however, also cited a case involving a Virginia woman, Rachel Trent, who duped many consumers on the eBay auction site. According to authorities, Trent advertised rare baseball and football cards on eBay. Once a consumer paid her for the cards, she sent them a worthless card or nothing at all. The Cyber Task Force arrested Trent, who is now serving four years in prison;

• Worldwide, the perpetrators identified in the IC3's complaints lived in the U.S. (66.1%), the United Kingdom (10.5%), Nigeria (7.5%), and Canada (3.1%);

• 55.4 percent of the consumers who filed complaints with the IC3 were men. Nearly half of them were 30-50 years old. One-third of those complainants lived in California, Florida, Texas, and New York.

• 92.4 percent of the IC3's complaints came from the United States. The organization also received complaints from Canada, the United Kingdom, Australia, India, and France;

• Men lost more money in Internet crimes than women. The ratio is $1.69 lost per male to every $1.00 lost per female;

• 74 percent of the fraudulent Internet contact came by e-mail; 28.9 percent came from Web sites;

"Care must be taken to avoid drawing conclusions about the 'typical' victim or perpetrator of these types of crimes," the report states. "Anyone who utilizes the Internet is susceptible, and IC3 has received complaints from both males and females ranging in age from ten to one hundred years old. Complainants can be found in all fifty states, in dozens of countries worldwide, and have been affected by everything from work-at-home schemes to identity theft."

A copy of the report is now posted on The National White Collar Crime Center's Web site. The report includes tips on ways consumers can protect themselves from getting taken in these various Internet schemes.

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