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Fraud Costs Businesses and Consumers $559.7m

Fraud Costs Businesses and Consumers $559.7m

In 2008 online fraud cost businesses and consumers $265m according to IC3 but in 2009 this rose to $559.7m, with an average cost per incident of $575. This is the biggest jump in online crime since IC3 began collecting data in 2005.

"The figures contained in this report indicate that criminals are continuing to take full advantage of the anonymity afforded them by the Internet," said Donald Brackman, director of the National White Collar Crime Center (NW3C).

"They are also developing increasingly sophisticated means of defrauding unsuspecting consumers. Internet crime is evolving in ways we couldn't have imagined just five years ago. With the public's continued support, law enforcement will be better able to track down these perpetrators and bring them to justice."

The IC3 recorded 336,655 complaints, a 22.3 per cent increase from 2008. Of the top five categories of reported offence non-delivered merchandise and/or payment came top at 19.9 per cent, followed by identity theft (14.1 per cent), credit card fraud (10.4 per cent), auction fraud 10.3 per cent and computer fraud (destruction/damage/vandalism of property) at 7.9 per cent.

Of the complaints involving financial harm the highest median dollar losses were found among investment fraud ($3,200), overpayment fraud ($2,500), and advance fee fraud ($1,500) complainants.

Men lost more money than women by a ratio of $1.51 lost per male to every $1.00 lost per female. Internet users between 40-49 reported the biggest levels of loss.

"Law enforcement relies on the corporate sector and citizens to report when they encounter on-line suspicious activity so these schemes can be investigated and criminals can be arrested," stated Peter Trahon, section chief of the FBI's Cyber Division.

"Computer users are encouraged to have up-to-date security protection on their devices and evaluate e-mail solicitations they receive with a healthy skepticism—if something seems too good to be true, it likely is."


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