http://www.washingtonpost.com/wp-dyn/content/article/2010/03/14/AR2010031403246.html?wpisrc=nl_tech
Cost of Internet fraud on steep rise
By Los Angeles Times
Monday, March 15, 2010
LOS ANGELES -- U.S. citizens reported losing more than $550 million in 2009 in
Internet fraud, falling prey to a variety of increasingly sophisticated scams,
according to a report by the Internet Crime Complaint Center.
The loss was more than twice that reported in 2008, according to the agency, a
partnership of the FBI and the privately funded National White Collar Crime
Center. The center, based in West Virginia, tracks Internet crime around the
world.
"Criminals are continuing to take full advantage of the anonymity afforded them
by the Internet. They are also developing increasingly sophisticated means of
defrauding unsuspecting consumers," said Donald Brackman, the center's
director.
Part of the increase can be attributed to a change that allowed more cases to
be included, but another possible factor was the increased use of the Internet,
which has broadened the pool of perpetrators and victims, said Charles
Pavelites, an FBI special agent.
More complaints were reported by California residents than by residents of any
other state, the report said. Common fraud included the nondelivery of
merchandise ordered through Web sites and "advance-fee scams," in which victims
were persuaded to make small payments to receive windfalls that never arrived,
the report said.
Typical of the cases reported last year was a scam in which a Miami Beach man
advertised vacation rentals on Craigslist.org but stopped communicating with
customers after they made thousands of dollars in down payments, according to
the report. Police arrested a suspect in that case, saying he stole more than
$30,000 from 16 victims.
Another common fraud in 2009 was the "hit-man scam," in which threatening
e-mails were sent to victims. The e-mails purported to be written by hit men
who had been paid to kill the victims. They said they would let the victims
live if they paid them thousands of dollars. Many of those threatening e-mails
were traced to West Africa, Pavelites said.
"Internet crime keeps going up. It's cheaper. It's faster. It beats the old
method of knocking on your door and trying to get you to give them money,"
Pavelites said. "If you send out 1 million e-mails and even a minimal number of
people return money, you'll make more money than a working person would in a
very long time in a legitimate job." Computer viruses capable of secretly
downloading passwords and account numbers are also a problem, Pavelites said.
Spread through e-mail attachments, the viruses allow criminals to steal from
bank and credit card accounts.
In April 2009, the Internet Crime Complaint Center linked 103 cases in which
victims reported paying for vehicles and motorcycles that did not arrive. The
victims lost a combined $360,000 that was sent to a fraudulent financing center
suggested by the seller, the report said. Consumers can take precautions to
avoid being victimized, Pavelites said. They should install up-to-date computer
firewalls, use only reputable payment centers to make purchases online, and not
respond to unsolicited e-mails or pop-up ads, he said.
