May 6, 2014

Internet Fraud Statistics: Why You Should Worry

The recent discovery of the Heartbleed bug was a wake-up call for some and a reminder to others that we're always vulnerable to Internet predators. With Nigerian scams still making their way to our inboxes and malware searching for our banking passwords, we always have to be on the lookout for potential dangers online.

Kinds of Fraud

The Federal Trade Commission’s Consumer Sentinel Data Book collected 2.1 million complaints of fraud and identity theft in 2013, up from 714,000 in 2003. Interestingly, identity theft rose at a slower rate than other types of fraud, with 290,000 complaints in 2013, compared with 215,000 a decade earlier. Still, identity theft made up the largest portion of all complaints, at 14 percent, followed by debt collection misdeeds at 10 percent and schemes related to banks and lenders at 7 percent.

Gone Phishing

Not all email scams are as obvious as fake messages from deposed African rulers. Phishing campaigns, which try to get recipients to click on dangerous links, can be almost indistinguishable from legitimate messages from PayPal or your local bank. A CreditDonkey survey found 67 percent of respondents receive at least one phishing message per day and that 98 percent are cautious when they get a message from an unknown sender.

The Anti-Phishing Working Group, a global coalition of organizations dealing with the issue, received reports of 56,767 unique phishing email campaigns in September 2013 impersonating 379 different companies, according to its quarterly report. More than half of the emails targeted payment services, and another 22 percent went after financial institutions. The report also found that, of malware infections reported in the third quarter of 2013, 78 percent were Trojans, which can steal data to give other people access to a computer. Small minorities were other kinds of programs like worms or viruses that spread through networks. In the U.S., just over 30 percent of computers are infected with some sort of malware. That’s worse than in some countries, like the Netherlands, where the rate is under 20 percent, but it’s a lot better than China, where it’s almost 60 percent.

The Damage Done

The FBI’s 2012 Internet Complaint Center Report recorded 290,000 reports of various types of fraud, from fake used car ads on Craigslist to email messages impersonating FBI officials. Of these, 115,000 involved some financial loss. The typical loss was $600, but for some kinds of scams, the figure was much higher, adding up to a total of $525 million lost. Romance scams, where users are conned into a fake relationship and then bilked out of money, accounted for less than 5,000 of the reports to the FBI, but the total damage added up to $56 million. Women aged 50 and older are the most common targets of these scams, with more than $34 million stolen from that demographic.

Vigilance Pays Off

Stopping Internet fraud is certainly a matter that public and corporate policies should address, but consumers also need to be aware of their own vulnerabilities. A CreditDonkey survey on credit card fraud found that more than a third of Americans surveyed have been victimized by credit card fraud, either through digital theft of their information or physical theft of the card itself. The same survey found that, of those readers who have had fraudulent charges made on their credit cards, two-thirds noticed the problem themselves, while the rest got a notification from their bank.

Aside from keeping track of your bank transactions, Internet security experts say there are some easy ways to protect yourself online. The well-known but rarely followed advice to change passwords often and use a different one for each important account is still valid. 68% of Americans surveyed have used the same password for multiple websites according to a CreditDonkey survey on password. It’s also important to scan your computer regularly for malware and viruses and to keep software updated. And, perhaps most importantly, it’s crucial to view all kinds of online solicitations with a strong dose of skepticism.

Other Resources:

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Identity Theft Protection

Identity Theft Statistics

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