The State of Internet Crime

The 2010 Internet Crime Report shows that online crime cuts across all demographic groups in the U.S. and spans the globe. Moreover, cyber criminals have become more creative in scamming Internet users out of their money.

Focal Points:

• The Internet Crime Report is published by the Internet Crime Complaint Center (IC3), which is now in its tenth year of existence. The IC3 was founded as a joint effort between the National White Collar Crime Center (NW3C)/Bureau of Justice Assistance (BJA) and the Federal Bureau of Investigation (FBI). Its purpose is to assist victims of online crime as well as law enforcement in reporting, investigating, and eventually prosecuting offenders. Complaints are submitted at www.ic3.gov, and then the information is reviewed, categorized and, when appropriate, referred to local, state, or federal law enforcement. In 2010, according to the IC3, it received the second-highest number of complaints since its inception as well as its two-millionth complaint. On average, it receives and processes 25,000 complaints per month. The most common victim complaints were non-delivery of payment or merchandise, scams impersonating the FBI, identity theft, and computer crimes, said the IC3. Victims of these crimes reported losing hundreds of millions of dollars. Miscellaneous and advanced fee frauds and spam were the next three most common complaints while auction fraud, credit card fraud, and overpayment fraud rounded out the top 10 cyber crimes in 2010, IC3 added.
• According to the IC3, historically, auction fraud was the leading complaint reported by victims, with a high of 71.2 percent of all referrals in 2004. In 2010, however, auction fraud represented approximately 10 percent of referrals. The reason for this decline is unknown. Another trend that the IC3 found in 2010 is that the age of those reporting online crimes is becoming more evenly distributed. Previously, those 30 to 39 represented the largest complainant reporting pool. Now, complainants 40 to 49 and 50 to 59 represented the two largest groups. The IC3 also reported that there is a shift toward those in the 50 to 59 and 60-and-over category, with those 60 and over accounting for the most dramatic rise in complaints since the IC3's inception.
• The IC3 also found that the gender gap in online crime reporting has narrowed. Previously, men reported crime at a ratio of more than 2.5 to 1 over women. Today, men and women report crimes almost equally; and in many states, a slightly higher proportion of women file reports. As a result, the dollar loss between men and women has also narrowed. Men used to report a loss of more than $2.00 for every $1.00 reported by a woman. According to the IC3, men now report a loss of $1.25 for every $1.00 reported by a woman. The data also found that a minority of perpetrators reside in the same state as victims. In California, 39.1 percent reside in the same state. This is followed by Florida, with 30.9 percent, and New York, with 29.4 percent. The IC3 also reported that most complainants were in the U.S., male, between 40 and 59, and a resident of California, Florida, Texas, or New York. Where perpetrator information was provided, nearly 75 percent were men, and more than half resided in California, Florida, New York, Texas, the District of Columbia, or Washington, the IC3 added. Outside of the U.S., most foreign complainants were from Canada, the United Kingdom, Australia, or India. As for perpetrators, the largest percentage outside of the U.S. was from the United Kingdom, Nigeria, China, and Canada, said the IC3.

Experton Group believes enterprises must ensure that all their Web presences provide users with assurances that conducting business or sharing information will preserve their assets, finances, identities, and privacy from cyber crimes. Multi-factor authentication helps solve this issue but it should not be the only way approach used to protect users. IT executives should make information available to users that explains the methods that are being used to protect them. However, the information should not be so specific as to be a blueprint to cyber criminals for evading the protection mechanisms.