May 13, 2012

Consumers Lost Nearly $500 Million From A Variety Of Internet Scams In 2011 - Investors.com


Crime on the Internet is becoming more devious and costly.

Consumers lost nearly $500 million last year from Internet scams ranging from crooks impersonating FBI agents to others using romantic relationships to extract cash, says a new report released late Thursday.

Cyber scam artists also used a combination of auto fraud, work from home and loan intimidation scams to steal big bucks from consumers last year, says the report, produced by the Internet Crime Complaint Center, a partnership between the FBI, the National White Collar Crime Center, and the federal Bureau of Justice Assistance.

The report shows crooks are using a combination of intimidation, the lure of a good deal in a bad economy and the growth of the Internet to their advantage, says Gartner analyst Avivah Litan.

"Most people don't have it in their head that there is fraud out there," she said. "They (crooks) are just very good social engineers."

Last year, IC3 collected 314,246 complaints of fraud, up from 303,809 in 2010 but down from the record 336,655 it received in 2009.

Dollar losses in 2011 totaled $485.3 million. This is the first time IC3 has provided a loss estimate .

The amount of losses from fraud isn't that surprising given the millions of people using the Internet every day in the U.S., says IDC analyst Phil Hochmuth.

"There is always some spectacular dollar loss tied to cyberfraud; it is a big problem and it's happening more frequently than ever," he said. "It just follows the trends in online digital life — more commerce, financial services, banking is all moving online and the fraud moves with it."

Last year, FBI-related scams ranked as the most common form of reported fraud with 35,764 complaints filed with IC3.

In many cases, crooks posed as FBI agents to bilk victims via email. Fraud losses from FBI impersonation scams cost consumers more than $3.5 million last year.

Scammers are likely hoping to intimidate their victims by using the FBI name, says IDC's Hochmuth.

"If a fake agent has contacted you, you might be more likely to respond to them," he said.

Identity theft scams, in which criminals use a consumer's personal information to commit fraud, came in second with 28,915 complaints. Advance fee fraud, where crooks convince victims to pay for goods they never receive, ranked third with 27,892 complaints.

Last year, lovelorn Internet users became one of the most battered victims of cybercrime.

by Pete Barlas Investor's Business Daily May 10, 2012


Consumers Lost Nearly $500 Million From A Variety Of Internet Scams In 2011 - Investors.com

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