FBI: Auctions, Shopping Get Most Complaints

W A S H I N G T O N, March 7 -- Phony auction Web sites that disappear aftertaking people's money and online shopping centers that neverdeliver the goods are the two most-reported instances of Internetfraud, according to the first FBI report on the subject.

And while studies have shown that most online shoppers' greatestfear is having their credit card number misused or stolen, thoseschemes comprised only 5 percent of complaints.

The report, released Tuesday, was a joint effort by the FBI andthe National White Collar Crime Center, a nationwide networksupported by the Justice Department that helps law enforcementagencies combat economic and high-tech crimes.

Fraud Cited in Majority of Complaints

"It clearly demonstrates the need for establishing anelectronic clearinghouse for the prompt receipt and referral ofInternet fraud cases to the appropriate law enforcement agencies,"said FBI Director Louis Freeh. "It has shown that victims ofcrime, whether it be Internet fraud or other crimes, are using theInternet as a reporting tool."

Auction fraud comprised 64 percent of all complaints to thegovernment's online Internet Fraud Complaint Center. Undeliveredmerchandise comprised 22 percent of all complaints.

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In its first six months of operation, the report center recordedabout 20,000 complaints. Of those complaints, 5,273 were classifiedas fraud by law enforcement agencies around the country.

The report also shows that California ranks first in the numberof online victims and criminals, followed by Florida, Texas,Pennsylvania and New York.

The National White Collar Crime Center said the report shows theneed for a renewed effort to help refine systems for Internettransactions.

"E-business is no longer just a buzzword," said Texas stateSecurities Commissioner Denise Voigt Crawford, a board member ofthe National White Collar Crime Center. "It's here to stay and wemust find ways to help consumers and business have confidence inthe transaction technology they choose."