Gadgetwise: Internet fraud decreased in 2010

Were criminals hurt by the recession, too?

-Online fraud consumer complaints dipped nearly 10 percent in 2010, according to an annual report from the Internet Crime Complaint Center, or IC3, a partnership between the Federal Bureau of Investigation and the National White Collar Crime Center.

303,809 Center received complaints from the public last year, down from 336,655 in 2009. If a significantly decreased, tally of 2010 was still the second highest in the history of the report and could even be a blip on the screen.

A chart from the IC3 report on online fraud.
Welcome, while the primary cause of dip after years of steady increase was probably the overall decline in retail sales activities associated with a weak economy, said Greg Donewar, manager of IC3. Complaint figures show a strong correlation with the plunge in retail sales and the tap of the recession, he said. "The unemployment rate remained above 9% for the nation, so there was less money for the trade of any kind."

In fact, the complaints were down for several large scams related to e-commerce, including auction fraud, credit card fraud and excessive so-called fraud, in which a scammer using a bad check overpays for a lease or some other item and obtains the recipient to send them a good verification with a difference. However, complaints of failure of goods or payments rose 9 percent to approximately $ 43,720, pushing this type of scam to no. 1 spot on the list of IC3 for the year.

Complaints about identity theft, cybercrime and fraud involving things like job offers-«bogus sweepstakes and also increased last year.

It seems likely that there will be a return to an upward trend in fraud complaints as the economy improves. Yet there may be some more lasting good forces at work, Mr. Donewar and others say. There is more awareness of online consumer fraud. Financial institutions and payment processors have gotten more aggressive use of anti-fraud technologies and retailers are improving the security of customer data.

"They're doing a better job with better tools," says Adam Chernichaw, a privacy and technology lawyer at White & Case. Fraud is kept at bay and is stated above, he said.

Without doubt, the criminals will make every effort to accommodate all of these defenses. In fact, there is no sign that the battle against online crime is being won. On the contrary, the IC3 report shows that it has become more pervasive, affecting people in all demographic groups and all across the country. Complaints from women, once less and less severe, reaching almost with complaints from men. Young and old are all well represented, with people aged 40-59 now provide most of the complaints.

"It is a natural result of the pervasiveness of technology in this time," says Mr. Chernichaw. "Now all over."