The 5 most common online swindles
- By Kevin McCaney
- May 18, 2012
The Internet Crime Complaint Center (IC3) has issued its "2011 Internet Crime Report," which serves up statistics on crimes reported to the center and gives details on how a lot of those scams are carried out.
ICS, a joint project of the National White Collar Crime Center, the Bureau of Justice Assistance and the FBI, fielded more than 300,000 complaints during the year, representing a 3.4 percent increase over 2010, though below the peak year of 2009. The report says “only” 36.9 percent (115,903) of those complaints involved financial loss, though they still totaled $485.3 million for the year.
The top five states for reported crimes, in order, were California, Florida, Texas, New York and Ohio, according to the report, which is not surprising considering their large populations. Per capita, the top five for online crimes were Alaska, the District of Columbia, New Jersey, Nevada and Colorado.
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IC3 originally was started to give victims an easy way to report online crimes, the report states, but has since developed into a powerful resource for both law enforcement and victims. One thing the center can do for the public is help people avoid online scams by educating them on the types of crimes being committed.
The report categorizes the five most common types of online crime as: FBI-related scams, identity theft, advance fee fraud, non-auction/non-delivery of merchandise and overpayment fraud. But it also goes offers details on how those scams are carried out.
A quick rundown on common scams to look out for:
FBI impersonation e-mail scams
These are scams in which a criminal poses as the FBI to defraud victims, although criminals also will pose as representatives of other government agencies, such as the IRS or law enforcement. IC3 received about 39 complaints a day about spam e-mails supposedly from the FBI demanding payment for one thing or another, the report states, with loses totaling more than $9,600 — or $245 per complaint — per day. As the report points out, government agencies don’t send unsolicited e-mails.
This is what it sounds like: Criminals advertise a vehicle at a great price, claim they must sell fast because they’re moving or being deployed by the military, and try to rush the sale, asking for partial or full payment right away through a third party. Of course, there is no vehicle, and if the victim makes a payment, the money is gone for good.
IC3 received a complaint about this type of scam about every two hours during 2011. Each complaint resulted in an average loss of $2,000, about $8.2 million for the year.
Swindlers have always preyed on loneliness, and the Internet has only made it easier for them. IC3 received more than 5,600 complaints of romance scams last year, with victim losses totaling $50.4 million, or an average loss of $8,900.
Romance scammers troll social networking sites, dating sites and chat rooms looking for victims and then pour on the charm, using flowers, poetry and other gifts to declare their “undying love,” the report states. They’ll tell stories of their own tragedies, family problems, personal injuries and other hardships, and then ask for financial help. And then, of course, they disappear. Although women between the ages of 40 and 59 were the largest group of victims, the report shows that people of either sex and any age are vulnerable.
This is a double-whammy scam, since it not only can steal money from the victims but also can make them into criminals. Cyber criminals often use these scams to move and launder their ill-gotten money. They advertise jobs through newspapers, online job sites, e-mails and social networking sites, and recruit victims as “mules” to move money through their own accounts. In the process the scammers could steal the victims’ identities and money, to the tune of $20 million from complaints filed in 2011. And the other shoe that can drop: “Regrettably, due to their participation, these individuals may face criminal charges,” the report states.
Loan intimidation scams.
This is a fairly complex scam, in which fraudsters use personal information on the victims — including Social Security numbers, employer information and bank account numbers — and pretend to be from the FBI or another federal agency, a law firm or an official-sounding institution. They tell the victims they are delinquent in a payday loan and threaten legal action if they don’t pay up.
IV3 says it’s not clear how the criminals obtain the victims' personal info, but many of the victims had filled out online applications for credit cards or loans before they were swindled. These scams netted more than $8 million last year, IC3 said, with complaints coming in at an average of 27 per day.
Kevin McCaney is a former editor of Defense Systems and GCN.