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Web Auction Fraud Tops List of 2001 Complaints
By Brian Krebs
Newsbytes
Thursday, April 11, 2002; 12:00 AM

Internet auction fraud was the top consumer complaint in 2001, according to figures released by the FBI this week.

Nearly 43 percent of all cases of Internet fraud reported last year resulted from online auctions gone bad, said the Internet Fraud Complaint Center, a partnership between the FBI and the National White Collar Crime Center.

Merchandise that was ordered online but was never paid for or shipped accounted for 20 percent of complaints last year, the IFCC said.

The report, released Tuesday, also shows that consumers continue to be taken in by the "Nigerian 419" e-mail scheme, an old scam that seeks to entice recipients with the promise of windfall profits in exchange for helping the sender recover millions of dollars in frozen or hidden assets. The IFCC said the e-mail scam was the source of more than 15 percent of complaints last year. Annual losses attributed to 419 scams are estimated to be in the hundreds of millions of dollars, according to U.S. Treasury officials.

Credit card fraud and confidence fraud rounded out the top five categories of complaints referred to law enforcement agencies last year, the IFCC said.

Richard L. Johnston, director of the National White Collar Complaint Center, said he expects the number of Internet fraud complaints to soon rise from 1,000 a week to 1,000 a day.

"We know more Internet crime is out there; it's just a matter of victims knowing where to go to report it and then actually reporting it," he said.

The IFCC's figures contrast with statistics released earlier this year by the Federal Trade Commission, which pegged identity theft as the leading consumer complaint in 2001.

According to the FTC, identify theft accounted for about 42 percent of the consumer fraud complaints received in 2001. Internet auction fraud placed a distant second with 10 percent of fraud complaints.

The difference between the agencies' findings may result from the reporting size: The FTC numbers were based on a breakdown of more than 204,000 consumer complaints, while the IFCC pulled its data from a pool of fewer than 50,000 complaints.

The IFCC is online at www.ifccfbi.gov.
© 2002 Newsbytes.com

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