8.2 Fraud Migrates On-line

The same types of fraud schemes that have victimized consumers and merchants for many years before the proliferation of Internet are now beginning to migrate to the Web. Consumers are beginning to find fraud schemes in chat rooms, e-mail, message boards, and e-retailing and auction Web sites. The misuse of credit cards via identify theft was by far the biggest security problem on the Web and the leading consumer-fraud complaint, according to the Federal Trade Commission, which provided this breakdown:

Credit card identity theft (42%)
Internet auctions fraud (10%)
Internet services scams (7%)

Complaints involving fraud on the Internet have jumped sixfold in the United States alone during 2001, according to consumer watchdog Internet Fraud Watch. The rising numbers are in line with the rapid growth of e-commerce, which has become a multimillion dollar business. Around 79 million U.S. citizens are now estimated to surf the Web, with many making purchases on-line or bidding in auction sites for goods and services. However, as e-commerce booms, more fraud is perpetrated.