Internet Fraud Complaints Soar in 2003

According to a report issued by the Internet Fraud Compliant Center, an organization led by the FBI and the National White Collar Crime Center, fraudulent activity on the Internet surged dramatically last year.

The Complaint Center said it received 48,252 complaints of fraud, compared with 16,775 complaints in 2001, citing its second annual report that covered January 1, 2002 through December 31, 2002. In all, 46% of the complaints regarded auction fraud, the most reported offense last year. Other complaints, including nondelivery of merchandise and credit and debit card fraud, also ranked high on the list.

Complaints of business, investment, and confidence fraud, as well as identity theft, round out the top seven types of complaints reported, each at 1% or more of the total fraudulent activities reported.

The total dollar loss of Internet fraud reported to the center in 2002 was $54 million, compared with $17 million the year before. Authorities believe that number of cases referred for prosecution hardly reflects the scope of actual criminal activity.

At $3,864, the “Nigerian Letter” scam tops the list as the highest median dollar loss for victims. (The “Nigerian Letter” scam is an e-mailed form letter from an alleged Nigerian national who claims to be the relative of a high-ranking exile who essentially needs someone to launder a few million dollars. The fraud comes in with the fact that the writer asks for wire instructions to the recipient's bank account, ostensibly the place in which the money would be deposited, and a nice-sized commission could be withdrawn as payment for services. Of course, the money would not be deposited and instead the recipient's bank account was zapped.) The median cost for victims of identity theft and check fraud was $2,000 and $1,100, respectively. The median cost for victims of auction fraud was $320 and merchandise nondelivery was $176.

The report omitted statistics on how many complaints received by the Internet fraud center resulted in criminal convictions last year.

Wire reports contributed to this article.

According to a report issued by the Internet Fraud Compliant Center, an organization led by the FBI and the National White Collar Crime Center, fraudulent activity on the Internet surged dramatically last year.

The Complaint Center said it received 48,252 complaints of fraud, compared with 16,775 complaints in 2001, citing its second annual report that covered January 1, 2002 through December 31, 2002. In all, 46% of the complaints regarded auction fraud, the most reported offense last year. Other complaints, including nondelivery of merchandise and credit and debit card fraud, also ranked high on the list.

Complaints of business, investment, and confidence fraud, as well as identity theft, round out the top seven types of complaints reported, each at 1% or more of the total fraudulent activities reported.

The total dollar loss of Internet fraud reported to the center in 2002 was $54 million, compared with $17 million the year before. Authorities believe that number of cases referred for prosecution hardly reflects the scope of actual criminal activity.

At $3,864, the “Nigerian Letter” scam tops the list as the highest median dollar loss for victims. (The “Nigerian Letter” scam is an e-mailed form letter from an alleged Nigerian national who claims to be the relative of a high-ranking exile who essentially needs someone to launder a few million dollars. The fraud comes in with the fact that the writer asks for wire instructions to the recipient's bank account, ostensibly the place in which the money would be deposited, and a nice-sized commission could be withdrawn as payment for services. Of course, the money would not be deposited and instead the recipient's bank account was zapped.) The median cost for victims of identity theft and check fraud was $2,000 and $1,100, respectively. The median cost for victims of auction fraud was $320 and merchandise nondelivery was $176.

The report omitted statistics on how many complaints received by the Internet fraud center resulted in criminal convictions last year.

Wire reports contributed to this article.