FTC: $548 million in 2004 identity thefts

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Source
FTC: At least $548 million lost to identity theft
Tuesday, February 1, 2005 Posted: 1:27 PM EST (1827 GMT)
WASHINGTON (Reuters) -- Americans lost at least $548 million to identity theft and consumer fraud last year as the Internet provided new victims for age-old scams, according to government statistics released Tuesday.

The U.S. Federal Trade Commission said it received 635,000 consumer complaints in 2004 as criminals sold nonexistent products through online auction sites like eBay Inc. or went shopping with stolen credit cards.

Identity theft -- the practice of running up bills or committing crimes in someone else's name -- topped the list with 247,000 complaints, up 15 percent from the previous year.

Fraud and identity theft cost consumers at least $437 million in 2003.

Internet-related fraud accounted for more than half of the remaining complaints as scammers found victims through Web sites or unsolicited e-mail, the FTC said.

Auction fraud was the most common Internet scam, the FTC said in its annual fraud report, followed by complaints about online shopping and Internet access service.

The number of incidents was up across nearly every category from 2003, but it was unclear whether that represented an actual increase in fraud or simply a greater awareness of the FTC's Consumer Sentinel fraud program.

Consumers likely lost significantly more than the amount reported, as fewer than half were able to pin a dollar figure on their losses.

The median monetary loss reported was $259, though 41 consumers reported losses of $1 million or more.

The FTC did not specify how many identity-theft incidents took place online. A recent report by the Better Business Bureau found that most cases of identity theft occurred through the theft of a checkbook or other offline methods.

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Unfortunately there is no indication of what percentage of Identity Theft occurred online. Too bad, I'd like to know what the proliferation of phishing has done to the numbers.

Personally I think the People who have lost money due to online Fraud is their fault. Due to the reason that everybody knows that the Internet is not safe and so they as Customers should take Security Meassures against it e.g. not surfing without a Firewall.

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Due to the reason that everybody knows that the Internet is not safe and so they as Customers should take Security Meassures against it e.g. not surfing without a Firewall.

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A firewall won't protect them from a phish.

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Personally I think the People who have lost money due to online Fraud is their fault.

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How so? They are misled to believe something when it's not true (e.g., they are selling something on eBay, someone wins the auction, sends a cashier's cheque for the full amount, they send the product and then the cashier's cheque bounces). What this is causing however is a complete breakdown in trust on the Internet. At some point, a new mechanism may need to be in place to deal with this but right now, from my POV, I don't foresee this appearing in the near future.

It is really easy to convince someone you are someone else (e.g., financial institution, etc) online and get them to give you their information.

The Confidence trickster (aka: Con artist etc) use many tool to ply his (or her) trade.
These tools can be material as in electronic, including telephone and internet, or human, including themselves, and the victim’s friends and acquaintances.
We will normally refer to these methods as "Social engineering”. In other words gain the victims confidence long enough to steal everything you need, by socialising with them in the appropriate manor.

You may think that you have all your doors guarded... but do you... who do you trust, what companies, do you trust your eyes? Your ears?

As for

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everybody knows that the Internet is not safe

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unfortunately it isn’t everybody.. The online scammers have scared the fearful ones away from the internet years ago... yep cleared them into the streets for the pickpockets and door to door scams..

And how about the stolen IDs by using Keyloggers/password stealers... Programs installed sometimes with next to no input from the victim...

Electronic Identity theft isn't the only method for having one's identity stolen, I myself had mine stolen by lost mail (such as a credit card statement that somehow went to an old apartment) fortunately I caught it about 30 seconds after it happened and had the card cancelled. On the electronic side, one of the main problems I've noticied is that users don't pay any attention to the U.R.L. they just look at the site. My roomate got hit by a phisherman and went to the site. He later asked me what was up with that...to which I replied, they're trying to steal your identity...look at the url, that's not ebay... he said that he didn't even look... Thus the problem. Phishing is possible because people don't pay enough attention to what is happening on the Internet as they move accross it. There are a plethora of methods in which these common criminals can work, and I think the main way to stop them is to speak out. Tell people to pay attention to the line on their browser that says "address", tell them to make damn sure that they know who an email is from before opening it and it's attachments. Offer them the help they need to know what's going on in their surroundings. After all, we are the individuals that know about computers and we should feel that it is our duty to aid those less knowledgeable than we are.

As time and experience continue to move forward, there will be more and more creative attempts to steal this information. Such as keyloggers, which are embedded in emails, spyware, etc ladies and gentlemen, I suggest we stay on our toes.

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"Personally I think the People who have lost money due to online Fraud is their fault."

I don't believe this is true about every case but it is certainly partially accurate.

Several years ago, someone falsely used my auction identity to post several high priced items for sale on an auction site. I didn't realize it had happened until I received a call in the middle of the night (2 am) from someone wondering where his $5,000 LCD projector was. Of course I had no idea what he was talking about (especially at 2 am). Finally he said "I bought an LCD projector from you on an auction site and you asked me to send the check proceeds to your family in Romania and I haven't received the projector yet."

Even at 2 am I caught on and told him that he had probably been taken in because I had never owned such a projector and didn't know anyone in Romania. The line went dead for a moment while he took that all in. I finally convinced him that he had been defrauded and that he and I should contact the auction site about the situation. When I checked next day there were several more pieces of equipment posted by the same person and several already sold.

Unfortunately, too many people get so excited about purchasing something cheap or getting something for nothing that they don't think before they act. The person who called me thought he had bought a $5,000 projector for $2,500.

Obviously, you can be defrauded without your knowledge but the con artists provide plenty of opportunity for people to contribute to the deception.

I am new to AO and I joined to try to help to spread the word about ways to prevent problems related to naive or unwary use of the Internet.

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Unfortunately there is no indication of what percentage of Identity Theft occurred online.

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According the article in this thread, 72% was offline.

http://www.antionline.com/showthread...680#post819680

Identity theft is only one face of Interent Fraud, here is some faces and a chart exmplains the precentag of each one {IFCC Complaint categories }:

The term “Internet Fraud ” refers generally to any type of using one or more of Internet components such as, chat rooms, e-mails, messages board or web sites, to present fraudulent solicitation to prospective victims, in order to gain commercial benefits.
Internet Fraud has so many forms and faces, like Auctions and Retails, Business opportunities and finally, the most famous one, Identity theft. It is also noteworthy that the number of fraud faces stands at approximately 10 different faces. {See the chart provided at the bottom of the contribution}

Internet fraud has been recently very popular and widely used by SCAMMER, for so many reasons. The first reason is the negligence; many peoples become fruitful victims for SCAMMER when they become very generous to reveal any kind of information.

Internet gives a golden opportunity for fraudsters to reach thousands of people without spending a lot of time, effort, or money by building a web site, sending mass e-mails, posting a message on a bulletin bard or entering a discussion in live chat rooms.

E-mail SPAMS is too cheap and easy to create, fraudsters on the larger scale use it to find to find for bogus investment schemes or to reveal rumors about a company to lessen its share prices.

Another good way that Fraudsters use is the “Pump and Dump ” SCAM, this method is based on sending a message that trying to persuade the reader to buy or sell stocks claiming that the prices are about going to increase or going downhill.

Identity theft is all types of gaining someone else’s information or impersonating someone else for economic purposes. Identity theft can arguably cause a substantial damage for persons and even for companies and organizations. In one of the most notorious cases, the criminal incurred more than $ 100,000 of credit card debt, obtained a federal home loan, and bought motorcycles and handguns.
Click Here for some statics

Interesting stats. The stats for 2004 had this:

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• • Internet auction fraud was by far the most reported offense, comprising 71.2% of referred complaints. Non-delivered merchandise and/or payment accounted for 15.8% of complaints. Credit/debit card fraud made up 5.4% of complaints. Check Fraud, investment fraud, confidence fraud, and identity theft round out the top seven categories of complaints referred to law enforcement during the year.
  
  • Among those individuals who reported a dollar loss, the highest median dollar losses were found among check fraud ($3600), Nigerian letter fraud ($3000), and confidence fraud ($1000) complainants.
  
  • Among perpetrators, nearly 74.7% were male and half resided in one of the following states: California, New York, Florida, Texas, Illinois, and Ohio. The majority of reported perpetrators were from the United States. However, perpetrators also had a representation in Canada, Nigeria, United Kingdom, Italy, and Greece.
  
  • Among complainants, 67.2% were male, nearly half were between the ages of 30 and 50 (average age 38.6) and over one-third resided in one of the four most populated states: California, Florida, Texas, and New York. While most were from the United States, IC3 received a number of complaints from Canada, Australia, Great Britain, Germany, and Japan.
  
  • Males lost more money than females (ratio of $1.97 dollars lost per male to every $1.00 dollar lost per female). This may be a function of both online purchasing differences by gender and the type of fraudulent schemes by which the individuals were victimized.
  
  • Electronic mail (E-mail) and web pages were the two primary mechanisms by which the fraudulent contact took place. In all, 63.5% of complainants reported that they had e-mail contact with the perpetrator and 23.5% had contact through a web page.

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/me does a happy dance!

Spotlight thread! And only 3 months active. I'd like to thank the Senior members, and the Academy, and Mom and Dad...

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Originally posted here by Chickenpox2004
Personally I think the People who have lost money due to online Fraud is their fault. Due to the reason that everybody knows that the Internet is not safe and so they as Customers should take Security Meassures against it e.g. not surfing without a Firewall.

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That's a pretty broad denunciation, Pox. How do you know that everyone knows that the internet is dangerous and hostile? My father-in-law certainly hasn't learned it with his Net-Zero dialup account. AOL has penned a deal to partner with RSA so they can give all their users SecurID tokens, but its not globally in place...how do all those users know?

I can appreciate the feelings of "it's their own damned fault!" from an embittered tech worker who is tired of handling the repetitive support calls...I know. Been there, done that, got the t-shirt to prove it.

But as security professionals (those of us that ARE in the industry), don't we have a certain obligation to help those less informed than we are? Or at least to minimize the harm they can encounter? Take a look at nihil's .sig sometime. It's very poignant, and appropriate.

Yes, to a certain extent it might be their own faults...but you can't expect a young child to know that electrical sockets are dangerous by instinct, can you? Of course, the first time they stick a finger (or GI Joe, or Barbie, or paperclip) into it, they'll probably learn a valuable lesson, hopefully without long lasting or disastorous consequences. But as a parent (or even as a decent human being) isn't it our responsibility to guide that child away from the socket when we see them contemplating it?

Wow, pretty deep there. (/me let's out a big John-Belushi-esque burp). That's better.