FBI: Internet fraud complaints up in 2002

The U.S. Federal Bureau of Investigation's (FBI) Internet Fraud Complaint Center (IFCC) referred 48,252 fraud complaints to US federal, state and local law enforcement agencies last year, triple the 16,775 referrals it made in 2001.

The IFCC, run by the FBI and the National White Collar Crime Center, said it also received nearly 37,000 other complaints related to computer intrusions, unsolicited spam and child pornography.

A spokeswoman for the Richmond, Va.-based IFCC said the center is monitoring the fraud complaints but didn't know how many had resulted in convictions because many of the cases have yet to be resolved.

According to the 2002 Internet Fraud Report, issued yesterday by the IFCC, victims of Internet fraud lost US$54 million in 2002, up from the US$17 million they lost in 2001.

For the third straight year, Internet auction fraud topped the list of reported offenses, accounting for 46 percent of referred complaints, the IFCC said. Nondelivery and nonpayment of merchandise made up 31 percent of complaints, and credit/debit card fraud acounted for 12 percent of complaints, according to the report.

Victims who fell prey to one of the most prevalent Internet scams, the Nigerian letter fraud, lost a median amount of US$3,864 each, according to the figures they reported to the IFCC, while victims of identity theft reported losing a median amount of US$2,000. Check fraud victims lost a median amount of US$1,000.

The IFCC said it received 16,164 complaints last year from people who fell for the Nigerian letter scam, a 500 percent increase over the 3,232 complaints for that scam recorded in 2001.

This scam, which has been around since the early 1980s, tells victims they have an opportunity to receive nonexistent government funds from alleged dignitaries, mainly from Nigeria, if they pay money upfront, which many of the perpetrators say will be used to bribe government officials.

The IFCC said that in 2002, 74 people lost US$1.6 million to this scam.

According to the report, more than 300 people lost a total of more than $800,000 to a Worcester, Mass., woman, Teresa Smith, who purported to sell computers through Internet auctions but never delivered the merchandise.

Smith, who used a number of identities in order to defraud her victims, pleaded guilty in federal court to five counts of mail fraud and five counts of wire fraud and is awaiting sentencing. She could face up to five years in prison on each count and a US$250,000 fine.

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Linda Rosencrance

Computerworld
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