E-Mail Users Losing Money to Online Scams

ByABC News
July 13, 2005, 3:00 AM

— -- Nine percent of U.S. Internet users have lost money on e-mail scams, according to a survey of 791 users conducted by market research firm The Radicati Group.

The study was conducted online in April and commissioned by Mirapoint, a vendor of e-mail appliances that block spam and viruses.

"We didn't expect it to be nine percent, we expected it to be a lot lower than that," says Marcel Nienhuis, a senior analyst with Radicati.

Nienhuis defines an e-mail scam as "any e-mail whose intent is to trick somebody out of money."

The survey, however, left it up to respondents to define a scam, just asking: "Have you ever lost money to an e-mail scam?"

When the respondents were asked which three kind of scams and spams they receive most often, the marketing of prescription drugs, financing services, pornography, and Nigerian fraud and phishing scams were on the top of the list.

Analyst firm Ferris Research also studies consequences of online fraud. The company was not involved in Radicati's online survey but says the results are in line with their own findings.

"The results are reasonable, maybe slightly at the high side," says Richi Jennings, a U.K.-based practice leader for spam and boundary services at Ferris Research and an independent consultant.

"Up to recently, the user education has been really, really poor," Jennings says. "I watched CNN not long ago where one of the top three advices to protect yourself from scams was, 'Don't open e-mail from people you don't know.' The power of branding and recognition is exactly what spammers and scammers make use of."

Jennings and his colleagues at Ferris Research predict that spam and phishing will be gone in a couple of years thanks to antispam software, education, and legislation.

"But the online scams will stay. We already see spam and scams moving to other media such as blogs, Wikis, and distorted search engine queries."

The reason is, not surprisingly, money, says Jennings. "Fundamentally, people are greedy. You get fooled because you want to make money."

According to Ferris Research's estimates based on mathematical models, the worldwide cost of e-mail spam and scams in the world is $50 billion a year, and $17 billion a year in the U.S. alone. "It includes wasted time, cost of putting in and maintaining antispam software, clogged servers, and so on," Jennings says.

Radicati's Nienhuis believes that most people will only be victim of an online scam once. "Until it happens to you, you have the impression that it is a danger but that it doesn't really apply to you. Once you're tricked, from that point forward on, you're probably going to be pretty cautious to what's coming in your in-box."

Of the survey's respondents, 523 were consumers and 268 were corporate e-mail users, according to the Radicati Group.