Internet Fraud - Varieties Of Online Fraud, Protection Against E-fraud, The Extent Of E-fraud

According to the U.S. National Consumers League, Internet-related fraud cost individuals and businesses $3.2 billion at the turn of the 21st century. The U.S. Federal Trade Commission (FTC) identified 18,660 instances of potential Internet fraud in 1999, with fully 25 percent of all consumer fraud complaints concerning the Internet, up from three percent in 1997. The Securities and Exchange Commission (SEC) received about 2,000 e-mails each day concerning possible online scams.

In many ways, the Internet seems tailor-made for engaging in fraudulent activity. A single individual can perpetrate elaborate, low-cost schemes while enjoying anonymity and a platform from which to reach potential victims all over the world. Among the crimes the Internet facilitates are identity theft and the generation of false, but valid, credit card numbers. Cyberspace also provides a new home for more traditional forms of fraud that can be more easily, and often more damagingly, committed online than in the physical world.

The true impact of Internet fraud is difficult to measure. Gartner Group reported that a survey of 166 retailers revealed an online credit card fraud rate that was 18 times higher than overall credit card fraud, while the U.S. Secret Service states that online and offline fraud rates are roughly the same. Part of this variation is caused by reluctance on the part of consumers and merchants to report fraud. Since there are no national reporting standards for credit card fraud, and claimed losses due to alleged fraud often are tal-lied in with all disputed claims, accurate measures are difficult to come by.