The 2007 Internet Crime Report is the seventh annual compilation of information on complaints received and referred by the Internet Crime Complaint Center (IC3) to law enforcement or regulatory agencies for appropriate investigative action. From January 1, 2007 to December 31, 2007, the IC3 website received 206,884 complaint submissions. This is a 0.3% decrease when compared to 2006 when 207,492 complaints were received. These filings were composed of fraudulent and non-fraudulent complaints primarily related to the Internet.

In 2007, IC3 processed more than 219,553 complaints that support Internet crime investigations by law enforcement and regulatory agencies nationwide. These complaints were composed of many different fraud types such as auction fraud, non-delivery, and credit/debit card fraud, as well as other illegal behavior, such as computer intrusions, spam/unsolicited e-mail, and child pornography. All of these complaints are accessible to federal, state, and local law enforcement to support active investigations, trend analysis, and public outreach and awareness efforts.

From the submissions, IC3 referred 90,008 complaints of crime to federal, state, and local law enforcement agencies around the country for further consideration. The vast majority of cases referred alleged fraud and involved a financial loss on the part of the complainant. The total dollar loss from all referred cases of fraud was $239.09 million with a median dollar loss of $680.00 per complaint. This was an increase from $198.44 million in total reported losses in 2006.

Other significant findings related to an analysis of referrals include:

• Perpetrators were predominantly male (75.8%) and half resided in one of the following states: California, Florida, New York, Texas, Illinois, Pennsylvania and Georgia. The majority of reported perpetrators were from the United States. However, a significant number of perpetrators also were located in United Kingdom, Nigeria, Canada, Romania, and Italy.
• Among complainants, 57.6% were male, nearly half were between the ages of 30 and 50 and 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, United Kingdom, Australia, India, and Mexico.
• Males complainants lost more money than females (ratio of $1.67 to every $1.00 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) (73.6%) and web pages (32.7%) were the two primary mechanisms by which the fraudulent contact took place.
• Recent high activity scams commonly reported to the IC3 in 2007 were those involving pets, checks, spam, and online dating sites, all of which have proven effective as criminal devices in the hands of fraudsters.

OVERVIEW

The Internet Crime Complaint Center (IC3), began operation on May 8, 2000 as the Internet Fraud Complaint Center. In December 2003, the Internet Fraud Complaint Center (IFCC) was renamed the Internet Crime Complaint Center (IC3) to better reflect the broad character of such criminal matters having a cyber (Internet) nexus. IC3 established a partnership between the National White Collar Crime Center (NW3C) and the Federal Bureau of Investigation (FBI) to serve as a vehicle to receive, develop, and refer criminal complaints regarding the rapidly expanding arena of cyber crime.

IC3 was intended and continues to emphasize serving the broader law enforcement community, including federal, state and local agencies, which employ key participants in the growing number of Cyber Crime Task Forces. Since its inception, IC3 has received complaints across a wide variety of cyber crime matters, including online fraud (in its many forms), intellectual property rights (IPR) matters, computer intrusions (hacking), economic espionage (theft of trade secrets), child pornography, international money laundering, identity theft, and a growing list of additional criminal matters.

IC3 gives the victims of cyber crime a convenient and easy-to-use reporting mechanism that alerts authorities of suspected criminal or civil violations. For law enforcement and regulatory agencies at the federal, state, and local level, IC3 provides a central referral mechanism for complaints involving Internet related crimes. Significant and supplemental to partnering with law enforcement and regulatory agencies, it will remain a priority objective of IC3 to establish effective alliances with industry. Such alliances will enable IC3 to leverage both intelligence and subject matter expert resources, pivotal in identifying and crafting an aggressive, proactive approach to combating cyber crime.

In 2007, the IC3 saw an increase in several additional crimes that were exclusively related to the Internet these included but are not limited to pet scams, check cashing scams, online dating fraud, phishing, spoofing, and spam. Each of these types of complaints has increased in prevalence over the past year.

Overall, the “IC3 2007 Internet Crime Report” is the seventh annual compilation of information on complaints received and referred by IC3 to law enforcement or regulatory agencies for action. This report provides an examination of key characteristics of 1) complaints, 2) perpetrators, 3) complainants, 4) interaction between perpetrators and complainants, 5) common Internet scams observed throughout the year and 6) success stories involving complaints referred by IC3.

The results in this report are intended to enhance our general knowledge about the scope and prevalence of Internet crime in the United States. This report does not represent all victims of Internet crime or fraud because it is derived solely from information provided by the people who filed a complaint with IC3.

Download 2007 Internet Crime Report

PDF format, 7.6MB, 28Pages.

Best Practices to Prevent Internet Crime

Internet Auction Fraud Prevention tips:

• Understand as much as possible about how Internet auctions work, what your obligations are as a buyer, and what the seller’s obligations are before you bid.
• Find out what actions the website takes if a problem occurs and consider insuring the transaction and shipment.
• Do not allow the seller or buyer to convince you to ignore the rules of a legitimate Internet auction website or exit the auction website to complete a transaction.
• Be cautious of second chance offers especially unsolicited email offers where you are contacted after an auction is listed as closed, or the item is listed as sold, with an offer to purchase the listed item allegedly because the original buyer backed out of a sale. Many times these second chance offers are fraudulent.
• Learn as much as possible about the seller, especially if the only information you have is an e-mail address. If it is a business, check the Better Business Bureau where the seller/business is located.
• Examine the feedback on the seller and use common sense. If the seller has a history of negative feedback, then do not deal with that particular seller.
• Determine what method of payment the seller is asking for and where he/she is asking to send payment. Use caution when the mailing address is a post office box number.
• Be aware of the difference in laws governing auctions between the U.S. and other countries. If a problem occurs with the auction transaction that has the seller in one country and a buyer in another, it might result in a dubious outcome leaving you empty handed.
• Be sure to ask the seller about when delivery can be expected and warranty/exchange information for merchandise that you might want to return.
• To avoid unexpected costs, find out if shipping and delivery are included in the auction price or are additional.
• Avoid giving out your social security number or driver’s license number to the seller, as the sellers have no need for this information.
• Finally, practice an attitude of healthy skepticism. If something sounds too good to be true, it usually is.

Steps to take if victimized:

1. File a complaint with the online auction company. In order to be considered for eBay’s Fraud Protection Program, you should submit an online Fraud Complaint 90 days after the listing end-date at http://crs.ebay.com/aw-cgi/ebayisapi.dll?crsstartpage).
2. File a complaint with the Internet Crime Complaint Center (http://www.ic3.gov).
3. Contact law enforcement officials at the local and state level (your local and state police departments).
4. Also contact law enforcement officials in the perpetrator’s town and state.
5. File a complaint with the shipper USPS, UPS, Fed-Ex, etc.=
6. File a complaint with the National Fraud Information Center (http://www.fraud.org/info/contactnfic.htm).
7. File a complaint with the Better Business Bureau (http://(http://www.bbb.org).

Non-Delivery of Merchandise

Prevention tips:

• Make sure you are purchasing merchandise from a reputable source. As with auction fraud, check the reputation of the seller whenever possible, including the Better Business Bureau.
• Try to obtain a physical address rather than merely a post office box and a phone number. Also, call the seller to see if the number is correct and working.
• Send them e-mail to see if they have an active e-mail address. Be cautious of sellers who use free e-mail services where a credit card was not required to open the account.
• Investigate other websites regarding this person/company.
• Do not judge a person/company by their fancy website; thoroughly check out the person/company out.
• Be cautious when responding to special offers (especially through unsolicited e-mail).
• Be cautious when dealing with individuals/companies from outside your own country. Remember the laws of different countries might pose issues if a problem arises with your transaction.
• Inquire about returns and warranties on all items.
• The safest way to purchase items via the Internet is by credit card because you can often dispute the charges if something is wrong. Also, consider utilizing an escrow or alternate payment service, after conducting thorough research on the escrow service. Many times fraudsters want victims to pay using wire transfers because they can collect and move the victim’s money before the victim learns of the fraud.
• Make sure the website is secure when you electronically send your credit card numbers.

Credit Card Fraud

Prevention tips:

• Don’t give out your credit card number(s) online unless the website is both secure and reputable. Sometimes a tiny icon of a padlock appears to symbolize a higher level of security to transmit data. This icon is not a guarantee of a secure site, but may provide you some assurance.
• Before using a site, check out the security software it uses to make sure that your information will be protected.
• Make sure you are purchasing merchandise from a reputable/legitimate source. Once again investigate the person or company before purchasing any products.
• Try to obtain a physical address rather than merely a post office box and a phone number. Call the seller to see if the number is correct and working.
• Send them e-mail to see if they have an active e-mail address and be wary of sellers who use free e-mail services where a credit card was not required to open the account.
• Do not purchase from sellers who refuse to provide you with verifiable contact information.
• Check with the Better Business Bureau to see if there have been any prior complaints against the seller.
• Check out other websites regarding this person/company.
• Be cautious when responding to special offers (especially through unsolicited e-mail).
• Be cautious when dealing with individuals/companies from outside your own country.
• If you are going to purchase an item via the Internet, use a credit card since you can often dispute the charges if something does go wrong.
• Make sure the transaction is secure when you electronically send your credit card numbers.
• You should also keep a list of all your credit cards and account information along with the card issuer’s contact information. If anything looks suspicious or you lose your credit card(s), contact the card issuer immediately.

Prevention tips for Businesses:

• Do not accept orders unless complete information is provided (including full address and phone number). Require address verification for all of your credit card orders. Require anyone who uses a different shipping address than their billing address to send a fax with their signature and credit card number authorizing the transaction.
• Be especially careful with orders that come from free e-mail services— there is a much higher incidence of fraud from these services. Many businesses won’t even accept orders that come through these free e-mail accounts anymore. Send an e-mail requesting additional information before you process the order asking for: a non-free e-mail address, the name and phone number of the bank that issued the credit card, the exact name on credit card, and the exact billing address.
• Be wary of orders that are larger than your typical order amount and orders with next day delivery.
• Be cautious of buyers who use numerous credit cards to pay for a single order, especially if the order is unusual in nature or size. Check all the credit cards to verify that they all belong to the same person or business.
• Pay extra attention to international orders. Validate the order before you ship your product to a different country.
• If you are suspicious, pick up the phone and call the customer to confirm the order.
• Consider using software or services to fight credit card fraud online.
• If defrauded by a credit card thief, you should contact your bank and the authorities.

Investment Fraud

Prevention tips:

• Do not invest in anything based upon appearances. Just because an individual or company has a flashy website doesn’t mean it is legitimate. Web sites can be created in just a few days. After a short period of taking money, a site can vanish without a trace.
• Do not invest in anything about which you are not absolutely sure. Do your homework on the investment to ensure that it is legitimate.
• Thoroughly investigate the individual or company to ensure that they are legitimate.
• Check out other websites regarding this person/company.
• Be cautious when responding to special investment offers (especially through unsolicited e-mail) by fast talking telemarketers. Know with whom you are dealing with!
• Inquire about all the terms and conditions dealing with the investors and the investment.
• Rule of Thumb: If it sounds too good to be true, it probably is.

Nigerian Letter Scam/419 Scam

Prevention tips:

• Be skeptical of individuals representing themselves as Nigerian or other foreign government officials asking for your help in placing large sums of money in overseas bank accounts.
• Do not believe the promise of large sums of money for your cooperation.
• Do not give out any personal identifying information regarding your savings, checking, credit, or other financial accounts.
• If you are solicited, do not respond and quickly notify the appropriate authorities.

Business Fraud

Prevention tips:

• Purchase merchandise from reputable dealers or establishments.
• Try to obtain a physical address rather than merely a post office box and a phone number, and call the seller to see if the number is correct and working.
• Send them e-mail to see if they have an active e-mail address and be wary of those that utilize free e-mail services where a credit card wasn’t required to open the account.
• Do not purchase from sellers who won’t provide you with this type of information.
• Purchase merchandise directly from the individual/company that holds the trademark, copyright, or patent. Be aware of counterfeit and look-alike items.
• Beware when responding to e-mail that may not have been sent by a reputable company. Always investigate before purchasing any products.

Identity Theft

Prevention tips:

• Check your credit reports once a year from all three of the credit reporting agencies (Experian, Transunion, and Equifax).
• Guard your Social Security number. When possible, don’t carry your Social Security card with you.
• Don’t put your Social Security Number or driver’s license number on your checks.
• Guard your personal information. You should never give your Social Security number to anyone unless you can verify that they are required to collect it.
• Carefully destroy papers you discard, especially those with sensitive or identifying information such as bank account and credit card statements.
• Be suspicious of telephone solicitors. Never provide information unless you have initiated the call.
• Delete any suspicious e-mail requests without replying. Remember: If your bank or credit card company needs you to contact them, they have telephone numbers and website information on your statement. You do not have to click on unsolicited emails to contact them.

Steps to take if victimized:

1. Contact the fraud departments of each of the three major credit bureaus and report that your identity has been stolen.
2. Get a “fraud alert” placed on your file so that no new credit will be granted without your approval.
3. Contact the security departments of the appropriate creditors and/or financial institutions for any accounts that may have been fraudulently accessed. Close these accounts. Create new passwords on any new accounts that you open.
4. File a report with your local police and/or the police where the identity theft took place.
5. Retain a copy of the police report because it may be needed by the bank, credit card company, or other businesses as evidence that your identity was stolen.

Cyberstalking

Prevention tips (from W.H.O.A – Working to Halt Online Abuse at www.haltabuse.org):

• Use a gender-neutral user name/e-mail address.
• Use a free e-mail account such as Hotmail (www.hotmail.com) or YAHOO! (www.yahoo.com) for newsgroups/mailing lists, chat rooms, Instant messages (IMs), e-mails from strangers, message boards, filling out forms, and other online activities.
• Don’t give your primary e-mail address to anyone you do not know or trust.
• Instruct children to never give out their real name, age, address, or phone number over the Internet without your permission.
• Don’t provide your credit card number or other information as proof of age to access or subscribe to a website with which you are not familiar with.
• Monitor/observe newsgroups, mailing lists, and chat rooms before “speaking” or posting messages.
• When you do participate online, be careful – only type what you would say to someone’s face.
• Don’t be so trusting online – don’t reveal personal things about yourself until you really and truly know the other person.
• Your first instinct may be to defend yourself – Don’t – this is how most online harassment situations begin.
  If it looks too good to be true – it is.

Visit The Internet Crime Complaint Center (IC3) Website

The Internet Crime Complaint Center (IC3) was established as a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C) to serve as a means to receive Internet related criminal complaints and to further research, develop, and refer the criminal complaints to federal, state, local, or international law enforcement and/or regulatory agencies for any investigation they deem to be appropriate.

The IC3 was intended, and continues to emphasize, serving the broader law enforcement community to include federal, as well as state, local, and international agencies, which are combating Internet crime and, in many cases, participating in Cyber Crime Task Forces.

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