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My Profile Top News Reuters top ten news stories delivered to your inbox each day. Subscribe You are here: Home > News > Technology > Article Home Business & Finance News U.S. Politics International Technology Internet Entertainment Sports Lifestyle Oddly Enough Environment Health Science Special Coverage Video Pictures Your View The Great Debate Blogs Weather Reader Feedback Do More With Reuters RSS Widgets Mobile Podcasts Newsletters Your View Make Reuters My Homepage Partner Services CareerBuilder Affiliate Network Professional Products Support (Customer Zone) Reuters Media Financial Products About Thomson Reuters Online crime surging in recession, U.S. report says Mon Mar 30, 2009 3:10pm EDT Email | Print | Share | Reprints | Single Page [-] Text [+] By Jason Szep BOSTON (Reuters) - Fraud on the Internet reported to U.S. authorities increased by 33 percent last year, rising for the first time in three years, and is surging this year as the recession deepens, federal authorities said on Monday. Internet fraud losses reported in the United States reached a record high $264.6 million in 2008, according to a report released on Monday from the Internet Fraud Complaint Center, run by the FBI and the National White Collar Crime Center. Online scams originating from across the globe -- mostly from the United States, Canada, Britain, Nigeria and China -- are gathering steam this year with a nearly 50 percent increase in complaints reported to U.S. authorities in March alone. "2009 is shaping up to be a very busy year in terms of cyber-crime," the report's author, John Kane, told reporters in a telephone briefing. Last year's losses compared with $239.1 million in 2007 and dwarfs the $18 million of losses of 2001. The most common complaint of 2008 was non-delivery of promised merchandise, followed by auction fraud, credit card fraud and investment scams, according to the report. Of 275,284 complaints received by the center in 2008, some 72,940 were referred to U.S. law enforcement agencies for prosecution. Those referrals spiked this year with 40,000 in the first quarter alone, said Kane. "It is our belief that these numbers, both the complaints filed and the dollars, represent just a small tip of the iceberg," said Kane, managing director of the National White Collar Crime Center in Richmond, Virginia. UNDERREPORTED CRIME "Our own research suggests that as few as 15 percent of cases of cyber-fraud are being reported to crime control agencies," he said. Scammers in the United States comprised 66 percent of complaints referred to authorities, followed by Britain at 11 percent, Nigeria 7.5 percent, Canada 3 percent and China 1.6 percent. Within the United States, the bulk originated in California (16 percent), followed by New York and Florida. Fraudulent sales on online auction sites like eBay Inc and classified sites like craigslist.com contributed to a 32 percent rise in the hottest area of online fraud -- non-delivery of promised merchandise, the report said. That area alone made up about 33 percent of all complaints serious enough to be referred to law enforcement. Other important areas included investment scams such as mini-versions of the $65 billion Ponzi scheme committed by New York financier Bernard Madoff in which money from new investors is used to pay existing investors. About 74 percent of the scams were through e-mail messages last year, especially spam, while about 29 percent used websites. But criminals were increasingly tapping new technologies such as social networking sites and instant messenger services, said Kane. Continued... View article on single page Share: Del.icio.us Digg Mixx Yahoo! 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