Saturday, March 13, 2010

FBI: Online Fraud Losses in 2009 More than Double 2008 Losses

For Immediate Release March 12, 2010

Online Fraud Losses go from $265 Million in 20008 to $560 Million in 2009

The Internet Crime Complaint Center (IC3), a partnership between the FBI and the National White Collar Crime Center (NW3C), released the 2009 Annual Report about fraudulent activity on the Internet today.

Online crime complaints increased substantially once again last year, according to the report. The IC3 received a total of 336,655 complaints, a 22.3 percent increase from 2008. The total loss linked to online fraud was $559.7 million; this is up from $265 million in 2008.
Although the complaints consisted of a variety of fraud types, advanced fee scams that fraudulently used the FBI's name ranked number one (16.6 percent). Non-delivery of merchandise and/or payment was the second most reported offense (11.9 percent).

The 2009 Annual Report details information related to the volume and scope of complaints,complainant and perpetrator characteristics, geographical data, most frequently reported scams and results of IC3 referrals.

“"Law enforcement relies on the corporate sector and citizens to report when they encounter on-line suspicious activity so these schemes can be investigated and criminals can be arrested,"” stated Peter Trahon, Section Chief of the FBI's Cyber Division. “"Computer users are encouraged to have up-to-date security protection on their devices and evaluate email solicitations they receive with a healthy skepticism—if something seems too good to be true, it likely is."”

NW3C Director Donald Brackman said the report's findings underscore the threat posed by cyber criminals. “"The figures contained in this report indicate that criminals are continuing to take full advantage of the anonymity afforded them by the Internet. They are also developing increasingly sophisticated means of defrauding unsuspecting consumers. Internet crime is evolving in ways we couldn't have imagined just five years ago."” But Brackman sounded an optimistic tone about the future.

“"With the public’s continued support, law enforcement will be better able to track down these perpetrators and bring them to justice."”

The report is posted in its entirety on the IC3 website.


Complaints Received

Dollar Loss




$559.7 million




$265 million




$239.09 million




$198.44 million




$183.12 millio

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Merchant Risk Council's Annual Merchant Fraud Survey

The Merchant Risk Council (MRC), a merchant-led trade association focused on electronic commerce risk and payment strategies, has announced the results of its Annual Merchant Fraud Survey, sponsored by CyberSource Corporation. According to the MRC, "this year’s survey again confirms that MRC Platinum Members are best in class at reducing revenue losses due to cyber theft, while also leading the way in reviewer productivity for both domestic and international orders."
Key Survey Findings:
  • MRC Platinum Members reported an average of just 0.9% of their total revenue lost to online fraud, compared to 1.2% for the overall sample, and 1.1% for other large non-member merchants with greater than $25 million in online sales

  • MRC Platinum Members rejected just 6% of international orders compared to 8% for the overall sample, and 7% for other large non-member merchants

  • MRC Platinum Members reported a fraudulent international order rate of just 1.4%, compared to 2.0% for the overall sample

  • MRC Platinum Members had a 88% higher review order productivity level compared to other large non-member merchants, and were more than twice as productive as the overall sample

The survey also revealed that MRC Platinum Members use an average of 7.9 automated fraud screening detection tools. This compares to just 4.7 tools utilized by the overall sample and 6.0 tools used by other large non-member merchants.
“Cyber thieves are increasing their sophistication and determination in searching for merchant vulnerabilities,” said MRC Executive Director Tom Donlea. “The MRC provides a growing range of e-Commerce and multi-channel retailers the platform and tools to combine forces and strengthen each of their defenses. These survey results continue to validate our collaborative efforts in both fighting fraud and increasing merchant profitability.”
Full survey results will be presented by CyberSource during the Platinum Meeting portion of the Merchant Risk Council’s SOLD OUT Annual e-Commerce Payments and Risk Conference March 16–18, 2010 at the Wynn Las Vegas. The 2010 conference will be uniting over 700 representatives from the world’s top online and multi-channel merchants, credit card brands, card issuers, payment processors, risk management providers, law enforcement agencies and various consultants and educators from around the world – all with the mission of making e-Commerce safer and more efficient for both merchants and consumers.
About the Survey
The MRC Platinum Fraud Survey was included as part of the 11th Annual CyberSource Fraud Survey, sponsored by CyberSource Corporation and conducted by Mindwave Research. The survey was fielded September 10 through October 7, 2009 and yielded over 350 qualified and complete responses, of which 81 were MRC Platinum merchants. The sample was drawn from a database of companies involved in electronic commerce activities. Incentive to respondents included a summary of the research.
About the Merchant Risk Council
The Merchant Risk Council (MRC) leads industry networking, education, benchmarking and advocacy programs to make electronic commerce more efficient, safe and profitable.
Today, with the power of its member-base, the MRC is the leading trade association for managing payments, preventing online fraud and promoting secure e-Commerce. The MRC is dedicated to working with e-Commerce and multi-channel merchants, payment processors, credit card issuers, credit card companies, alternative payment providers, risk management experts, and law enforcement to make the Internet a safer and more profitable place to do business.
The MRC Board of Directors and Advisors includes: Accertify, Apple, Chase Paymentech, CyberSource Corporation, Dell Inc., Discover Network, Expedia Inc., Gap Inc. Direct, GlobalCollect, Linden Lab, Microsoft, Neiman Marcus, PayPal, Trustwave, Visa Inc. and Wal-Mart.

Internet (Lack of ) Security News Ending March 13th

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