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For Immediate Release
March
6, 2001
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Washington D.C.
FBI National Press Office
(202) 324-3691
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The
FBI and the NW3C's First Report Revealing the Latest Internet
Fraud Trends and Statistics
The Federal Bureau
of Investigation (FBI) and the National White Collar Crime
Center today issued its first report revealing the latest
Internet fraud trends and statistics. With more than 37.5
million visits to its Web site and over 20,000 complaints
filed with the Internet Fraud Complaint Center (IFCC), the
report issued today puts a face on the state of Internet
fraud in the United States. This report reveals current
statistics and offers detailed trend information regarding
the nation's top Internet frauds. It also offers a unique
perspective on the complaint referral process to federal,
state, and local law enforcement officials with indicators
of the program's early success. A copy of this report is
available on the IFCC web site at www.ifccfbi.gov.
"E-business
is no longer just a buzzword. It's here to stay and we must
find ways to help consumers and businesses have confidence
in the transaction technology they choose," said Texas
State Securities Commissioner Denise Voigt Crawford, board
member of the National White Collar Crime Center (NW3C).
"Part of the commitment to our electronic commerce
community rests in law enforcement's ability to respond
quickly to crime problems as they arise. To do that, enforcement
professionals at all levels must have training and programs
in place to prepare them to meet new challenges."
In its first
six months of operation, the IFCC received 20,014 complaints.
Of these complaint filings, 6,087 were referred to enforcement
agencies around the country. Of those referred complaints,
5,273 involved Internet fraud and serve as the primary analysis
of the report. The remainder of the complaints involve filings
that are incomplete, awaiting review for referral, or were
not Internet fraud specific.
The report shows
that auction fraud was the most reported Internet fraud,
comprising 64.1 percent of all referred complaints. Non-deliverable
merchandise and payment accounted for another 22 percent
of complaints. and credit and debit card fraud made up nearly
5 percent of complaints. Demographic data reveals that California
ranks #1 for both Internet criminals and victims. Other
national leaders in these categories are Florida, Texas,
Pennsylvania, and New York. From an international perspective,
the United States leads receiving 94.1 percent of the complaints.
"The report
clearly demonstrates the need for establishing an electronic
clearinghouse for the prompt receipt, validation, and referral
of Internet fraud cases to the appropriate law enforcement
and regulatory agencies," said FBI Director Louis J.
Freeh. "Additionally it has shown that victims of crime,
whether it be Internet fraud or other crimes, are using
the Internet as a reporting tool. Now critical investigative
information can be shared with our law enforcement colleagues
around the country in a readily retrievable way."
"IFCC was
developed as an innovative and progressive approach to a
real crime problem," said Colonel Donald J. Brackman,
of the Indiana State Police and board member of the NW3C.
"By facilitating the flow of information between law
enforcement and victims of fraud, it streamlines the case
initiation effort on behalf of both the citizen and the
enforcement agencies. Not only will its efforts reduce the
amount of economic loss by Internet fraud throughout the
United States, it will also give state and local enforcement
professionals a venue to develop and successfully prosecute
criminal Internet fraud cases."
Already the IFCC
has offered help to America's fraud victims by referring
large and small complaints to enforcement agencies nationwide.
Several of the complaints involved monetary losses of $100,000
or more, including one complaint involving more than $366,000.
That case resulted in a prosecution in the Western District
of Louisiana. Other matters are referred to federal, state
and local prosecutors nation wide.
"This report
enhances our general knowledge about the scope and prevalence
of Internet fraud in the United States," Brackman said.
"It is our hope that the information will also serve
as fuel to help us sustain organizational and financial
support for existing white collar crime enforcement, prosecution,
and prevention programs, as well as help enforcement agencies
secure critically needed resources to address this threat
to our citizens."
This six-month
report is the first in a series of regular research initiatives
that are scheduled and will be provided by the NW3C and
the FBI on IFCC complaint data. An annual report will be
presented in the third quarter of 2001. A copy of the IFCC
report is also available by contacting the NW3C's Research
Director, Dr. Don Rebovich, at (304) 291-2080, extension
249, or by e-mail at drebovich@nw3c.org.
About the
Internet Fraud Complaint Center
The Internet
Fraud Complaint Center (IFCC) is a partnership between the
Federal Bureau of Investigation and the National White Collar
Crime Center and began operating in May 2000. For victims
of Internet fraud, the IFCC provides a convenient and easy
way to alert authorities of a suspected criminal or civil
violation. For law enforcement and regulatory agencies,
the IFCC offers a central repository for complaints related
to Internet fraud, uses the information to quantify fraud
patterns, and provides timely statistical data of current
fraud trends. The IFCC Web site is located at www.ifccfbi.gov.
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