01 April, 2009

Recession fuels cybercrime

Online fraud rose 33% last year and is surging this year as crisis deepens, says US report

BOSTON


FRAUD on the Internet reported to the authorities in the United States increased by 33 per cent last year, rising for the first time in three years, and is surging this year as the recession deepens, the federal authorities said on Monday.

Internet-fraud losses reported in the US reached a record high of US$264.6 million (S$401.9 million) last year, according to a report released on Monday by the Internet Crime Complaint Center, run by the FBI and the National White Collar Crime Center.

Online scams originating from across the globe – mostly from the US, Canada, Britain, Nigeria and China – are gathering steam this year, with a nearly 50 per cent rise in complaints reported to US authorities in last month alone.

“2009 is shaping up to be a very busy year in terms of cybercrime,” the report’s author, Mr John Kane, said.

Last year’s losses slightly exceed the US$239.1 million lost in 2007, but dwarf the US$18 million lost in 2001.

The most common complaint last year was non-delivery of promised merchandise, followed by auction fraud, credit-card fraud and investment scams, according to the report.

Of 275,284 complaints received by the centre last year, about 72,940 were referred to US law-enforcement agencies for prosecution.

Those referrals spiked this year, with 40,000 in the first quarter alone, said Mr Kane, who is managing director of the National White Collar Crime Center in Richmond, Virginia. “Our own research suggests that as few as 15 per cent of cases of cyberfraud are being reported to crime-control agencies,” he said.

Scammers in the US made up 66 per cent of complaints referred to the authorities, followed by Britain at 11 per cent, Nigeria at 7.5 per cent, Canada at 3 per cent and China at 1.6 per cent.

Fraudulent sales on online auction sites like eBay and classified sites like craigslist.com contributed to a 32 per cent rise in the hottest area of online fraud – non-delivery of promised merchandise, the report said.

The report said almost 80 per cent of known perpetrators of online scams are male.

Of those making complaints, nearly half are between the ages of 30 and 50. The median dollar loss was US$931 per complaint, although the median losses for cheque fraud reached US$3,000, and that for investment scams was US$2,000.
– REUTERS

From myPaper, My News, WORLD
Wednesday, 01-April-2009