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FBI Reports All-Time High In Internet Fraud Losses
eldavojohn writes "While the number of cases dropped, the amount of money lost to internet fraud reached an all-time high in 2007, a new government report states. 'According to the 2007 Internet Crime Report, the Internet Crime Complaint Center (IC3) received 206,884 complaints of crimes perpetrated over the Internet during 2007. Of the complaints received, more than 90,000 were referred to law enforcement around the nation, amounting to nearly $240 million in reported losses. This represents a $40 million increase in reported losses from complaints referred to law enforcement in 2006.' The top ruses used by the fraudsters involved pets, romance and secret shoppers. The original report[Large PDF] is available online, and it contains some interesting graphs. One indicates that the two largest types of fraud are Auction Fraud and Non-delivery, which combine for over 60% of all cases. As Computerworld notes, men are more likely to fall for scams than women, and over 30% of losses are between $1,000 and $5,000. The report also contains data about the location of the perpetrators (Nigeria only accounts for 5.7%), age demographics, and contact methods."
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The funniest part is that several years ago, I had a form of ID theft occur. Someone took out loans and bought property in my name... even with my SSN and all. Who lost my information? Only two candidates were possible. The credit rating agencies, or the government. Nobody else had all the data that was used, since I rarely give specific information and have a tendency to verify who holds what.
:)
Here's the irony. I called Equifax and Experian and after verifying that the information they and I had was correct, they told me I could not receive my own credit report because I did not possess the proper ID to clear myself to them... yet when I went into trucking, they were able to run a credit check on me without so much as a single complaint!
Interesting how the actual OWNER of an identity is not permitted to know what kind of data is warehoused about him or her, but everyone else pays 15 bucks and gets a full detailed copy faxed to them over insecure lines.
I think the bullshit is in the centralized repositories of standardized and aggregated information, not the fact that it is being stolen. That is inevitable when such a heavy prize is dangled at any height. Just imagine what will happen when they tie biometric (unchangeable) data to it.
Witness protection, to say the least, will take on a WHOLE new meaning. Might change name and address and "person number" once you rat on the mafia, but you won't change your DNA or retinal scan
" What luck for rulers that men do not think" - Adolf Hitler
*raises hand*
I bought Vista from an online retailer. The copy was completely legit, but I still felt scammed. And a little dirty.
Paypal is one of the least secure financial sites on the internet. Not only are email addresses used as user names, there are no secondary passwords or pins for transactions, no confirmation emails, not even IP tracking or blocking. Then there is the issue of accounts being linked with eBay with passwords often matching. So a hijacked ebay account can easily lead to a hijacked paypal account, and often times the hijacked accounts come with great feedback.
But when paypal or ebay get's compramised, they don't go to the police. They take absolutely no responsibility for their lack of security, and they don't even try to prevent future crimes. 120% of their work goes towards dodging blame and making the victim pay for their losses and do any paper work.
These sites are the perfect accomplices for online criminals. And they profit from it. All those fake handbags and sneakers on ebay still account for millions in listing fees and work towards their usage statistics.
The police need to investigate these crimes and send the bill to the sites where the crime occured. They should also automatically fine the criminals 20x what they stole and charge them for rent for the time they lock them up (which can be as little as 3 days, I don't think this matters).
Credit card companies are also to blame. Now it is easier than ever for buyers to file false claims and get merchandise for free. If any credit card fraud occurs, even in the smallest amounts, these cases need to be processed by law enforcement and fines need to be handed out. Too many people know they can get away with it, and keep repeating the same crime.
Back in the day when I was a young coder - that was in a whole different century, mind you - we had these paper gadgets called "checks" that couldn't be cashed unless the account holder signed them. Our banks kept records called signature cards to compare them to, to make sure the checks were legit.
Even when Automatic Teller Machines came along, you needed both a card and a Personal Identification Number to withdraw cash.
But these days, anyone who knows your routing number (bank and branch number) and your account number can initiate an EFT to rob you blind! Yes, they'll get caught eventually - but your money will be long gone.
I understand that the banking industry is losing ten billion dollars a year worldwide this way. You'd think that would be enough to get them to require some kind of authentication, but I guess the efficiency savings from not having to process paper checks makes up for it.
Small comfort to the victims though.
A friend of mine who is a professor, with a PhD and very prominent in his field, with a big grant and legions of grad students, fell for a phishing scam. They withdrew $4000 from his account. He'd never heard of phishing before. So you see, the scams do pay off sometimes.
Request your free CD of my piano music.
The worst advise law enforcement can give are along the lines of:
1) look at feedback. make sure that the seller has a positive track record.
2) if the sellers asks for cash or money orders be suspecious.
3) make sure that the contact information is valid
This kind of advise is completely misleading, because it gives the impression that caution and education are the keys to crime prevention. On the contrary, smart crooks will use these exact elements to manipulate their victims!! How? It is easy for a crook to "steal" feedback. It is easy for a crook to dodge #2, and it is also easy for a crook to emulate #3.
The bottomline is extremely simple. If someone wishes to con someone online, it is absolutely 100% doable. The only way to protect yourself is through insurance. There is absolutely no other way. The worst thing you can say to a victim is "duh, you should have known better". Sure, there are people who will fall more easily to careless cons than others. But the bottomline is still the same. There are ways of stealing identities and getting paid that are completely unavoidable. To the victims, these cases are sheer bad luck. And the criminals deserve the worst because they know what they are doing and they will most likely do it again knowing that it works.
Currently, the only viable option for insurance is credit card fraud protection. If your merchandise doesn't arrive, then just dispute the charge. This does have a huge flipside though. This same insurance that protects buyers is used for buyer fraud. Eventhough the merchandise arrived, they would call anyway and try and get their money back. For sellers, paypal's seller protection policy is the only insurance against this tactic.