Text: FBI Warning on Internet Fraud

(Internet Complaint Center receives 20,000 complaints in six months)
(1070)

More than 20,000 people reported problems to the Internet Fraud
Complaint Center (IFCC) in its first six months of operation,
according to a March 6 news release from the Federal Bureau of
Investigation (FBI).

Almost 5,300 of the complaints involved Internet fraud and have been
referred to law enforcement agencies around the country. Online
auctions generated the most complaints -- 64 percent of the total --
the release says. Non-deliverable merchandise and payment was another
source of complaint, representing 22 percent of the total.

The Internet Fraud Complaint Center is a joint project of the FBI and
the National White Collar Crime Center (NW3C). The information it has
collected is being described as a significant asset to law
enforcement.

"By facilitating the flow of information between law enforcement and
victims of fraud, it streamlines the case initiation effort on behalf
of both the citizen and the enforcement agencies," said Indiana State
Police Colonel Donald J. Brackman, a NW3C board member.

The IFCC Web site and complaint filing center is at
http://www.ifccfbi.gov/

Following is the text of the FBI press release.

(begin text)

U.S. DEPARTMENT OF JUSTICE

Federal Bureau of Investigation

Washington D.C. March 6, 2001 

FBI National Press Office

The Federal Bureau of Investigation (FBI) and the National White
Collar Crime Center today issued its first report revealing the latest
Internet fraud trends and statistics. With more than 37.5 million
visits to its Web site and over 20,000 complaints filed with the
Internet Fraud Complaint Center (IFCC), the report issued today puts a
face on the state of Internet fraud in the United States. This report
reveals current statistics and offers detailed trend information
regarding the nation's top Internet frauds. It also offers a unique
perspective on the complaint referral process to federal, state, and
local law enforcement officials with indicators of the program's early
success. A copy of this report is available on the IFCC web site at
www.ifccfbi.gov.

"E-business is no longer just a buzzword. It's here to stay and we
must find ways to help consumers and businesses have confidence in the
transaction technology they choose," said Texas State Securities
Commissioner Denise Voigt Crawford, board member of the National White
Collar Crime Center (NW3C). "Part of the commitment to our electronic
commerce community rests in law enforcement's ability to respond
quickly to crime problems as they arise. To do that, enforcement
professionals at all levels must have training and programs in place
to prepare them to meet new challenges."

In its first six months of operation, the IFCC received 20,014
complaints. Of these complaint filings, 6,087 were referred to
enforcement agencies around the country. Of those referred complaints,
5,273 involved Internet fraud and serve as the primary analysis of the
report. The remainder of the complaints involve filings that are
incomplete, awaiting review for referral, or were not Internet fraud
specific.

The report shows that auction fraud was the most reported Internet
fraud, comprising 64.1 percent of all referred complaints.
Non-deliverable merchandise and payment accounted for another 22
percent of complaints. and credit and debit card fraud made up nearly
5 percent of complaints. Demographic data reveals that California
ranks #1 for both Internet criminals and victims. Other national
leaders in these categories are Florida, Texas, Pennsylvania, and New
York. From an international perspective, the United States leads
receiving 94.1 percent of the complaints.

"The report clearly demonstrates the need for establishing an
electronic clearinghouse for the prompt receipt, validation, and
referral of Internet fraud cases to the appropriate law enforcement
and regulatory agencies," said FBI Director Louis J. Freeh.
"Additionally it has shown that victims of crime, whether it be
Internet fraud or other crimes, are using the Internet as a reporting
tool. Now critical investigative information can be shared with our
law enforcement colleagues around the country in a readily retrievable
way."

"IFCC was developed as an innovative and progressive approach to a
real crime problem," said Colonel Donald J. Brackman, of the Indiana
State Police and board member of the NW3C. "By facilitating the flow
of information between law enforcement and victims of fraud, it
streamlines the case initiation effort on behalf of both the citizen
and the enforcement agencies. Not only will its efforts reduce the
amount of economic loss by Internet fraud throughout the United
States, it will also give state and local enforcement professionals a
venue to develop and successfully prosecute criminal Internet fraud
cases."

Already the IFCC has offered help to America's fraud victims by
referring large and small complaints to enforcement agencies
nationwide. Several of the complaints involved monetary losses of
$100,000 or more, including one complaint involving more than
$366,000. That case resulted in a prosecution in the Western District
of Louisiana. Other matters are referred to federal, state and local
prosecutors nation wide.

"This report enhances our general knowledge about the scope and
prevalence of Internet fraud in the United States," Brackman said. "It
is our hope that the information will also serve as fuel to help us
sustain organizational and financial support for existing white collar
crime enforcement, prosecution, and prevention programs, as well as
help enforcement agencies secure critically needed resources to
address this threat to our citizens."

This six-month report is the first in a series of regular research
initiatives that are scheduled and will be provided by the NW3C and
the FBI on IFCC complaint data. An annual report will be presented in
the third quarter of 2001. A copy of the IFCC report is also available
by contacting the NW3C's Research Director, Dr. Don Rebovich, at (304)
291-2080, extension 249, or by e-mail at drebovich@nw3c.org.

About the Internet Fraud Complaint Center

The Internet Fraud Complaint Center (IFCC) is a partnership between
the Federal Bureau of Investigation and the National White Collar
Crime Center and began operating in May 2000. For victims of Internet
fraud, the IFCC provides a convenient and easy way to alert
authorities of a suspected criminal or civil violation. For law
enforcement and regulatory agencies, the IFCC offers a central
repository for complaints related to Internet fraud, uses the
information to quantify fraud patterns, and provides timely
statistical data of current fraud trends. The IFCC Web site is located
at www.ifccfbi.gov.

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(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)