So many targets, so little time
Internet fraud is bad and getting worse

In 2001, victims of Internet fraud reported losses of $17 million. By 2005, victims reported losses of more than 10 times that amount—$183.12 million.

These are just the losses reported to the to the Internet Crime Complaint Center (IC3), which is a partnership between the National White Collar Crime Center (NW3C) and the Federal Bureau of Investigation (FBI). No one knows the total amount of money that has actually been stolen from people through Internet fraud.

Why? Fraud is considered a white-collar crime, and most white-collar crime goes unreported. Research conducted by the NW3C in 2005 found that 46.5% of households had been victimized by white-collar crime in the year prior to the survey. Only 30.1% of victimizations were reported to law enforcement agencies.

2005 Internet fraud report

The IC3 enables victims of Internet crime to file complaints online. The organization evaluates the complaints and then refers them to appropriate law enforcement agencies. The IC3 does not investigate the complaints, nor does it guarantee that the complaints will be investigated.

Here are highlights of the organization's 2005 annual report on Internet crime:

• The IC3 web site received 231,498 complaints in 2005, which included both fraud and non-fraud. Complaints ranged from auction fraud to credit card fraud to spam to child pornography.
• The total dollar loss reported by the victims was $183.12 million.
• The IC3 referred 97,076 fraud complaints to law enforcement agencies for further consideration.
• Auction fraud was the most reported offense, comprising 62.7% of the complaints referred to law enforcement agencies.
• 73.2% of complainants reported they had contact with the perpetrator via e-mail and 16.5% had contact through a web page.

Difficulty in prosecution

A unique characteristic of Internet fraud, according to the IC3, is that the perpetrator and the victim may be located hundreds, or even thousands, of miles apart. California, for example, is a hot spot for Internet fraud—that's where 15.2% of perpetrators are located. Yet in cases where the perpetrator is in California, only 27.3% of the victims are also in California. The rest are scattered around the country and the world.

With the victim and perpetrator located in different states, jurisdictional issues often require the cooperation of multiple law enforcement agencies to resolve a case. This makes investigation and prosecution of Internet fraud difficult.

Victims of Internet fraud

There is no "typical" victim of Internet fraud.

"Anyone who uses the Internet is susceptible," says the IC3. "The IC3 has received complaints from both males and females ranging in age from 10 to 100 years old. Complainants can be found in all 50 states, in dozens of countries worldwide, and have been affected by everything from work-at-home schemes to identity theft."

Beware. If you're online, you're a potential victim.