The Federal Bureau of Investigation
(FBI) and the National White Collar Crime Center today issued
its first report revealing the latest Internet fraud trends and
statistics. With more than 37.5 million visits to its Web site
and over 20,000 complaints filed with the Internet Fraud Complaint
Center (IFCC), the report issued today puts a face on the state
of Internet fraud in the United States. This report reveals current
statistics and offers detailed trend information regarding the
nation's top Internet frauds. It also offers a unique perspective
on the complaint referral process to federal, state, and local
law enforcement officials with indicators of the program's early
success. A copy of this report is available on the IFCC web site
at www.ifccfbi.gov.
"E-business is no longer
just a buzzword. It's here to stay and we must find ways to help
consumers and businesses have confidence in the transaction technology
they choose," said Texas State Securities Commissioner Denise
Voigt Crawford, board member of the National White Collar Crime
Center (NW3C). "Part of the commitment to our electronic
commerce community rests in law enforcement's ability to respond
quickly to crime problems as they arise. To do that, enforcement
professionals at all levels must have training and programs in
place to prepare them to meet new challenges."
In its first six months of operation,
the IFCC received 20,014 complaints. Of these complaint filings,
6,087 were referred to enforcement agencies around the country.
Of those referred complaints, 5,273 involved Internet fraud and
serve as the primary analysis of the report. The remainder of
the complaints involve filings that are incomplete, awaiting
review for referral, or were not Internet fraud specific.
The report shows that auction
fraud was the most reported Internet fraud, comprising 64.1 percent
of all referred complaints. Non-deliverable merchandise and payment
accounted for another 22 percent of complaints. and credit and
debit card fraud made up nearly 5 percent of complaints. Demographic
data reveals that California ranks #1 for both Internet criminals
and victims. Other national leaders in these categories are Florida,
Texas, Pennsylvania, and New York. From an international perspective,
the United States leads receiving 94.1 percent of the complaints.
"The report clearly demonstrates
the need for establishing an electronic clearinghouse for the
prompt receipt, validation, and referral of Internet fraud cases
to the appropriate law enforcement and regulatory agencies,"
said FBI Director Louis J. Freeh. "Additionally it has shown
that victims of crime, whether it be Internet fraud or other
crimes, are using the Internet as a reporting tool. Now critical
investigative information can be shared with our law enforcement
colleagues around the country in a readily retrievable way."
"IFCC was developed as an
innovative and progressive approach to a real crime problem,"
said Colonel Donald J. Brackman, of the Indiana State Police
and board member of the NW3C. "By facilitating the flow
of information between law enforcement and victims of fraud,
it streamlines the case initiation effort on behalf of both the
citizen and the enforcement agencies. Not only will its efforts
reduce the amount of economic loss by Internet fraud throughout
the United States, it will also give state and local enforcement
professionals a venue to develop and successfully prosecute criminal
Internet fraud cases."
Already the IFCC has offered
help to America's fraud victims by referring large and small
complaints to enforcement agencies nationwide. Several of the
complaints involved monetary losses of $100,000 or more, including
one complaint involving more than $366,000. That case resulted
in a prosecution in the Western District of Louisiana. Other
matters are referred to federal, state and local prosecutors
nation wide.
"This report enhances our
general knowledge about the scope and prevalence of Internet
fraud in the United States," Brackman said. "It is
our hope that the information will also serve as fuel to help
us sustain organizational and financial support for existing
white collar crime enforcement, prosecution, and prevention programs,
as well as help enforcement agencies secure critically needed
resources to address this threat to our citizens."
This six-month report is the
first in a series of regular research initiatives that are scheduled
and will be provided by the NW3C and the FBI on IFCC complaint
data. An annual report will be presented in the third quarter
of 2001. A copy of the IFCC report is also available by contacting
the NW3C's Research Director, Dr. Don Rebovich, at (304) 291-2080,
extension 249, or by e-mail at drebovich@nw3c.org.
About the Internet Fraud Complaint
Center
The Internet Fraud Complaint
Center (IFCC) is a partnership between the Federal Bureau of
Investigation and the National White Collar Crime Center and
began operating in May 2000. For victims of Internet fraud, the
IFCC provides a convenient and easy way to alert authorities
of a suspected criminal or civil violation. For law enforcement
and regulatory agencies, the IFCC offers a central repository
for complaints related to Internet fraud, uses the information
to quantify fraud patterns, and provides timely statistical data
of current fraud trends. The IFCC Web site is located at www.ifccfbi.gov.