Who Said (Cyber)crime Doesn’t Pay?
The Internet Crime Complaint Center (IC3) recently released a report with a stunning conclusion: people are losing more money to internet scammers than ever before. In its 14th year of operation, the IC3 released the 2013 Internet Crime Report, which shows a “48.8 percent increase in reported losses since 2012.”
What are these crimes, who are they targeting, and what is causing the sudden surge in reported losses?
What is the IC3?
The IC3 is a partnership between the Federal Bureau of Investigation and the National White Collar Crime Center (NWC3). It acts as a reporting mechanism for victims of online crime as well as a resource for law enforcement at many levels. Each year it releases a detailed annual report on cybercrime.
In the 2013 report the IC3 stated, “criminals continue to use a variety of scams to defraud Internet users,” making it clear that the online crime picture is a diverse one. It’s important to analyze precisely for this reason. There were 262,813 complaints received, of which roughly half of the victims reported financial loss. These losses totaled almost $800 million.
What are the Cybercrimes?
The 2013 report breaks down the different types and methods of cybercrimes. Vehicle fraud, for example, is one of the most prevalent forms. Trying to buy cars from scammers has cost over 1,400 people an average of $3,640 per incident. Perpetrators who pose as FBI agents have cost victims $6,348,881 in total. Cybercriminals can also defraud victims by pretending to sell real estate, producing ransomware or scareware, and even threatening to carry out jobs as hit men.
Surprisingly, romance scamming has caused the highest average losses for its victims. These scams involve a falsified online romantic relationship and cost the average victim about $12,756. By professing love and enticing victims to send financial assistance, romance scammers generally target “people aged 40 years and older, divorced, widowed, disabled, and often elderly,” the report said.
The targets of cybercrimes are primarily middle-aged. For years now the largest demographic has been the 40-59 year old age group, consistently making up over 40 percent of victims of online crime. The extreme age demographics, those under 20 and over 60, are both affected much less, as they make up just over 3 percent and just over 15 percent of victims, respectively. One possible explanation is that those who have grown up with the internet navigate its criminal spaces more carefully, while many of the elderly are simply not online.
What has been happening with Cybercrime?
Although each demographics’ share of cybercrime victims has remained relatively stable, the reported losses have been far from static. An increase of almost 50 percent from 2012 to 2013 demonstrates a wildly changing environment for online crime. While this spike may suggest that the IC3 has been receiving more complaints, its reports indicate otherwise. Each listed demographic actually reported fewer complaints in the previous year. Financial losses per complaint must be rising.
While there was nearly a 22 percent decrease from the number of complaints in 2009 to 2013, the IC3’s reported losses rose from $559.7 million in 2009 to over $781.8 million in 2013. Among those who reported any financial loss, the average loss increased from about $5,500 to well over $6,000 between 2009 and 2013. It seems as though the increased reported losses do not reflect a greater public knowledge of the IC3 and an increased number of reports. Instead, the decrease in actual complaints coupled with the increase in average reported losses suggests that internet scamming may be more lucrative than it has ever been.
As are all sources of criminal information, the IC3 is limited. It relies on the victim filing a complaint through the IC3, and as with all crimes, many cases will go unreported. Unfortunately, it stands alone in its domain. Other data collection systems like the Uniform Crime Reports aggregate data from law enforcement agencies, not from the victims themselves. The National Crime Victimization Survey (NCVS) uses surveys to determine victimization, but does not focus on internet crime. It asks young people about cyber bullying and has compiled a report specifically on identity theft. Aside from these questions, it appears that the NCVS fails to collect information about cybercrime. However if, cybercrime is paying more, then the IC3 and similar programs should be supported as much as possible.
Jake Ephros (@JakeEphros)
Featured image courtesy of [EP Technology via Flickr]