Wednesday, February 02, 2005
FTC Says Most Reported Fraud Stems from Web
With other forms of fraud factored in, including Web services or computer sales that were never completed, some 53 percent of all reported fraud complaints stemmed from the Web, the FTC said. However, identity theft seems to pose the most immediate threat to the continued success of e-commerce (see the Guardian eCommerce consumer alert page).
In a reminder of a lingering threat to the growth of online commerce, a new report from the FTC (Federal Trade Commission) says identity theft -- such as phishing over the Internet -- continued to be the most prevalent form of consumer fraud reported to authorities last year.
In fact, complaints stemming from online activity dominate the list of top consumer problems. For instance, auction fraud complaints ranked second, making up 16 percent of all FTC inquiries, with some 98,000 individual reports in 2004, ranging from incomplete sales to allegations of false advertising in auction listings.
Yes, there is a surge in Phishing, however, identity theft, which has been fueled by a surge in phishing attacks and often involves complex international rings where personal data is sold and resold, seems to pose the most immediate threat to the continued success of e-commerce. The FTC said awareness of the problem of identity theft and a streamlined process for reporting it might have helped drive the increase in reports.
In 2004, 39 percent of some 635,000 consumer fraud complaints stemmed from identity theft. It was the fifth straight year the problem generated the lions share of the complaints the FTC logged.
In the long run, consumer complaints will help stem the tide of identity theft and other forms of fraud that are prevalent online because those reports are thoroughly investigated and often result in arrests or the breakup of fraud rings.
By filing complaints, consumers are one click away from thousands of law enforcement partners who can help restore their good name, protect their financial security , and give the FTC the information they need to stop fraud.
Analysts say the rise of phishing, which evolved from a relative rarity to become one of the most common forms of spam e-mail in 2004, suggests that online identity theft is still increasing.
Consumer awareness is helping, as consumers are becoming smarter about not becoming victims themselves.
Still, if the problem is not curtailed, it will become an impediment to continued growth of e-commerce and the hopes for spreading commerce to mobile devices. Law enforcement is, by nature, an after-the-fact response, one that often happens well after the original theft takes place.
Online merchants can address the situation by beefing up their own security. Consumers say they're willing to endure more security measures, including those that go beyond typical password security, in order to ensure online transactions remain safe.
A trusted third party like Guardian eCommerce can also help consumers identify trustworthy Web sites.
In addition to ID theft and auction woes, top sources of consumer complaints to the FTC last year included those relating to computer or Internet services, scams relating to foreign money exchanges, work-at-home business opportunities and fraudulent loan or credit protection schemes.
More information at Guardian eCommerce Consumer Alerts.
In a reminder of a lingering threat to the growth of online commerce, a new report from the FTC (Federal Trade Commission) says identity theft -- such as phishing over the Internet -- continued to be the most prevalent form of consumer fraud reported to authorities last year.
In fact, complaints stemming from online activity dominate the list of top consumer problems. For instance, auction fraud complaints ranked second, making up 16 percent of all FTC inquiries, with some 98,000 individual reports in 2004, ranging from incomplete sales to allegations of false advertising in auction listings.
Yes, there is a surge in Phishing, however, identity theft, which has been fueled by a surge in phishing attacks and often involves complex international rings where personal data is sold and resold, seems to pose the most immediate threat to the continued success of e-commerce. The FTC said awareness of the problem of identity theft and a streamlined process for reporting it might have helped drive the increase in reports.
In 2004, 39 percent of some 635,000 consumer fraud complaints stemmed from identity theft. It was the fifth straight year the problem generated the lions share of the complaints the FTC logged.
In the long run, consumer complaints will help stem the tide of identity theft and other forms of fraud that are prevalent online because those reports are thoroughly investigated and often result in arrests or the breakup of fraud rings.
By filing complaints, consumers are one click away from thousands of law enforcement partners who can help restore their good name, protect their financial security , and give the FTC the information they need to stop fraud.
Analysts say the rise of phishing, which evolved from a relative rarity to become one of the most common forms of spam e-mail in 2004, suggests that online identity theft is still increasing.
Consumer awareness is helping, as consumers are becoming smarter about not becoming victims themselves.
Still, if the problem is not curtailed, it will become an impediment to continued growth of e-commerce and the hopes for spreading commerce to mobile devices. Law enforcement is, by nature, an after-the-fact response, one that often happens well after the original theft takes place.
Online merchants can address the situation by beefing up their own security. Consumers say they're willing to endure more security measures, including those that go beyond typical password security, in order to ensure online transactions remain safe.
A trusted third party like Guardian eCommerce can also help consumers identify trustworthy Web sites.
In addition to ID theft and auction woes, top sources of consumer complaints to the FTC last year included those relating to computer or Internet services, scams relating to foreign money exchanges, work-at-home business opportunities and fraudulent loan or credit protection schemes.
More information at Guardian eCommerce Consumer Alerts.
