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FBI Report: Internet Fraud on the Rise in Recession

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 […]

Written By

Jessica Davis

Mar 30, 2009

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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.

FBI Report: Internet Fraud on the Rise in Recession

Jessica Davis

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