RealTime IT News

FTC: Online Fraud Losses Hit $437M

Online scammers robbed Americans of more than $437 million in 2003, mostly using stolen identities, fake Internet auctions and fraudulent shop-at-home schemes, the Federal Trade Commission (FTC) reported Thursday.

In its year-end Consumer Fraud and ID Theft Report, the FTC said it received more than half a million consumer complaints during 2003, a 40 percent jump over complaints in 2002. More than 40 percent of all complaints related to identity theft perpetuated through 'phishing' and other Web-related scams.

Even with those startling statistics, the FTC conceded the actual number of victims and losses may be must higher because the data only relates to formal complaints received from consumers. In fact, according to the FTC report, more than 60 percent of those who filed FTC complaints did not make a report to the police.

The most common identity theft complaints related to credit card fraud. Other reports in 2003 included phone or utility fraud, bank fraud, employment-related fraud, government document or benefit fraud and loan fraud.

Excluding identity theft reports, swindlers running Internet auctions accounted for 15 percent of consumer losses in 2003 while shop-at-home schemes and catalog sales accounted for 9 percent.

The median loss was reported at $228 and, surprisingly, the Web-savvy 18-39 age group was tops among victims, accounting for a whopping 53 percent of all losses in 2003.

The 73-page report said victims of Internet fraud (excluding ID theft) reported losses of almost $200 million, with the median loss in the range of $195. Internet related fraud accounted for 55 percent of all fraud reports, up from 45 percent in 2002.

Making it clear that higher reporting of fraud does not necessarily indicate a higher overall incidence, the FTC said consumers in Washington, D.C., Seattle, WA., and San Diego, Calif. reported the highest per capital rates of fraud reports.

The major metropolitan areas with the highest per capita rates of ID theft included Phoenix/Mesa, Arizona; Los Angeles/Long Beach, Calif.; and Riverside/San Bernardino, Calif.