A new government report released April 3 paints a detailed picture of the landscape for online scams and could serve as a useful tool for students’ internet safety education.
Money lost in internet-related crimes hit a new high last year, topping about $240 million, according to the report, which shows increases in scams involving pets, check-cashing schemes, and online dating.
The number of reported internet scams dropped slightly from previous years, but the total amount lost jumped $40 million, according to the report from the FBI and the National White Collar Crime Center.
Slightly fewer than 207,000 complaints of online fraud were reported to the FBI’s Internet Crime Complaint Center (IC3) in 2007, down from 207,492 complaints the previous year and more than 231,000 in 2005, the report said. But the total dollar loss was $239 in 2007, up from $198 million in 2006.
"We’re seeing more schemes involving bigger ticket items, get-rich-quick and work-at-home schemes that involve higher dollar losses," FBI special agent John Hambrick, who is in charge of the IC3 unit, told the news source AFP. "But I’m optimistic that people are starting to catch on to some of these scams, and we will continue to try to educate them to the dangers of internet fraud."
The preferred method of ensnaring a victim online was through spam eMail, the source of 75 percent of internet scams, the report said.
"A cyber criminal is only looking for a less than one percent return on all the eMails he sends out, and he can still make money hand over fist," said Hambrick.
The report shows men lost more than women on average–$765 per scam for men, compared with $552 for women.
That’s not because they are more gullible but because they are more likely to purchase the so-called "big ticket" items such as televisions online, said Hambrick.
The report also shows the amounts lost increased with age. Victims in their 20s lost $385 on average, while people over 60 reported they lost an average $760 per scam.
The most common crime reported was auction fraud, in which consumers did not get the right merchandise they paid for. A consumer might "pay $25 for a DVD that somebody actually recorded in the back of a movie theater," said FBI spokeswoman Cathy Milhoan.
The second most common crime was non-delivery of a purchased good, followed by confidence fraud, in which scammers ask consumers to rely on them, resulting in a financial loss.
About half the losses involved amounts less than $1,000, and one-third involved amounts between $1,000 and $5,000.
The jump in money lost online might be owing to new scheming techniques and generally more expensive electronic items being purchased online, said Hambrick.
The report cites repeated increases over the years in pet scams, online dating fraud, spam eMail, and "phishing," in which scammers send phony eMail messages to retrieve consumers’ personal or financial information.
Many cases of crime involve scammers asking for charity relating to crises. Milhoan said scammers tried to profit from the Interstate 35 bridge collapse in Minnesota last year, in which 13 people were killed.
"The scammer tries to prey on victims who are kind of in tune with what’s going on in the world," she said. "The scam changes, but ultimately they’re preying on the good will of people."
Online dating and social networking sites "also have figured prominently in scams reported to the IC3," the report said.
"After meeting someone at one of these sites, the fraudster tries to gain a person’s trust through false displays of affection. In most cases, the fraudster lives far away … The fraudster expresses an ardent desire to visit the person but cannot afford to make the trip.
"The fraudster convinces the victim to send money to cover his travel expenses. Then, invariably, an unforeseen event (often an accident of some sort) prevents the fraudster from making the trip."
According to the report, men account for 76 percent of the perpetrators, and half of them live in these states: California, Florida, New York, Texas, Illinois, Pennsylvania, and Georgia. A significant number of perpetrators also were located in the United Kingdom, Nigeria, Canada, Romania, and Italy.??
Internet users who are tempted by an online offer of goods or services but who want further information can turn to a public web site for help: www.lookstoogoodtobetrue.com
. The site, which is hosted by the IC3 and its partners, offers consumer alerts, tips, and descriptions of fraud trends.