Cyber fraud was up over 20% from 2008 according to the 2009 Annual Report on Internet Crime which was just released on March 12th by the Internet Crime Complaint Center (IC3), a partnership between the Federal Bureau of Investigation and the White Collar Crime Center. Over 300,000 complaints were logged over the course of the year with dollar losses amounting to $559.7 million, almost double the 2008 total of $265 million.

As more and more potential victims log on and begin exploring the internet for the first time, scammers are happy to exploit the growing numbers of potentially inexpert new surfers and take their hard earned money. Not wanting to limit themselves, however, the crooks are also continually evolving there schemes and scams in an effort to dupe even the savviest of internet users.

Individuals aren’t the only potential victims. John Leyden reported in the online IT publication The Register of a recent conference hosted by the RSA, the security division of information management and storage leader EMC, where Federal Deposit Insurance Corporation specialist David Nelson told the attendees of businesses losing over $120 million in the Third Quarter of 2009 alone to phishing and Trojan-based online banking scams of which $25 million were taken from small businesses.

Mr. Leyden then contrasted the $120 million in online banking fraud with the $9.5 million taken in actual physical bank robberies in that same Third Quarter of 2009 as reported by security blogger Brian Krebs. It’s obvious that for these criminals there is much higher payoff working online, where without ever leaving the house or putting themselves in harm’s way they can continue to steal millions upon millions of dollars.

As for those individuals who were affected by internet scams, of the 336,665 complaints filed in 2009 with IC3, 146,663 were then referred to local and state law enforcement offices in cases involving identifiable loss. There were several specific types of scams that accounted for the majority of both complaints and referrals.

Phony emails claiming to be sent from the FBI director Robert Mueller were the number one complaint received in 2009 by IC3, accounting for 16.6% of all crime complaints.

These emails often use realistic graphics, seals and logos in the letterhead resulting in an appearance of legitimacy, and appear to originate from both overseas and domestic FBI offices. Claiming to be bulletins dealing with the War on Terror or memes regarding Weapons of Mass Destruction or asking the potential victim personal questions as part of an “ongoing investigation”, the messages are in fact cleverly disguised scams that cover a wide range of fraud from extortion to phishing to downloading dangerous malware on the recipient’s computer.

Though this scam was the most reported in 2009 to IC3, it appears that most internet users weren’t actually falling for the bogus email as it comprised only 4% of the complaints referred to local authorities due to identifiable loss, behind eight other types of fraud.

Still, 1% is too high and if you ever receive an email claiming to be from the FBI, do not click on the provided links. The FBI does not conduct its business via email, but rather makes initial contact over the phone or in person.

Scammers using the internet to take potential buyers and sellers for a ride were responsible for the second most reported complaint at 11.9%. Due to its high success rate, the con made up the majority of complaints that were eventually referred to law enforcement, accounting for almost 20% of all referrals made by IC3.

This is a wide-ranging scam that includes many different types of merchandise or services. Used cars, furniture, apartment rentals, and collectibles are just a sample of the never-ending bait used by these can artists to hook their victims. Scamraiders has covered several of these specific scams in past articles and while the details may differ the basic idea remains the same.

Using Craigslist, Ebay or other similar internet communities used to exchange goods and services, the scammers pose as potential buyers or sellers. When playing the seller, the fraudsters normally demand a down payment to be made before shipping anything. Once the victim makes the payment, whether for a new bed, a used car, or a deposit for an apartment, they quickly realize the promised goods or services are not coming and the scammer is never heard from again. On the flip side, the con artist will make a payment in check or with a stolen credit card, and the victimized seller finds they have parted with a valued item and the check bounces or the credit card company refuses to honor the fraudulent transaction.

Always make these transactions via credit card, in case you need to stop the charge, and try to deal with local vendors who you can meet face-to-face during the exchange. If you do end up working with someone who is not local, pay special attention to any sort of reviews or ratings by others who have dealt with them on the website being used. These can be very telling.

IC3 lists identity theft as the second highest referred complaint to law enforcement due to identifiable loss comprising over 14% of all total referrals. These numbers reflect when an identity was stolen without another identifiable crime, such as credit card theft. Credit card fraud was listed right behind identity theft on law enforcement referrals making up 10.4% of the total complaints forwarded by IC3.

These have been combined here because one often leads to the other and the types of scams used to enact this fraud are quite similar.

Phishing, which has been written about extensively on Scamraiders, is a tool used by scammers to trick victims into revealing their personal information, banking information and credit card numbers. The scams start with emails claiming to be from your bank, a trusted vendor, or a government agency like the IRS which ask the recipient to go to website and verify certain personal or financial information. As legitimate as these well-faked websites appear, the information is entered directly into the con artist’s database and the victim is soon robbed blind.

The internet is a wonderful tool which offers endless options for entertainment, finger-tip access to vast amounts of information, and easy, convenient way to conduct business at home. Like any marketplace or social hotspot in recorded history, this bustling activity is a beacon for scammers, con artists and predatory fraudsters. Enjoy the ride, but keep guard up for shady characters to ensure you aren’t the one being ridden.


Visit the Internet Crime Complaint Center to learn more about or report an internet crime

A direct link to the annual reports on complaints received by IC3

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