FBI Report: Internet Fraud on the Rise in Recession

By Jessica Davis  |  Print this article Print


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Technology buyers should be careful about whom they buy from during the recession. An FBI report says non-delivery of merchandise ordered online, including personal computers, was the top complaint in 2008. That complaint also saw the biggest growth rate.

Small businesses may need the services of a trusted adviser such as their IT solution provider in the midst of the current recession more than they ever have before, given the recession-spurred rise in Internet fraud recently reported by the FBI.

Or at least they should be careful about what businesses they choose to buy from when they buy online.  

The report from the Internet Fraud Complaint Center, run by the FBI and the National White Collar Crime Center, found that Internet fraud is on the rise, with a total dollar loss from the 72,940 complaints in 2008 reaching $264.6 million with a median dollar loss per complaint of $931. That’s up from $239.1 million in total reported losses in 2007 and up from $18 million in 2001.

According to the report, the most common complaint was for non-delivered merchandise and/or payment, making up 32.9 percent of the referred complaints.

"This represents a 32.1 percent increase from the 2007 levels of non-delivery of merchandise and/or payment reported to IC3," the organization writes in its report. Of those who reported this type of fraud, the median loss was $800.

One of the scams the report provides as an example is of Kenneth Kranich, who allegedly offered several Hewlett-Packard PCs for sale on eBay and received between $375 and $465 for each computer sold. However, the buyers never received their merchandise. While police are filing charges in only four cases with the most evidence available, the FBI report says as many as 42 victims in 12 states were possibly victims of the scam.

Internet auction fraud was the next most common complaint at 25.5 percent, and credit/debit card fraud was 9 percent. The remainder of the complaints included confidence fraud, computer fraud, check fraud and Nigerian letter fraud.

Of the complaints reporting a dollar loss, the highest median losses were among check fraud, according to the report.


Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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