Fraudsters turn to the net

Credit card fraud is on the increase in the US

Fraudsters are increasingly using the internet - instead of mail and telephone - to carry out their cons, according to new US figures.

The great thing about the internet is it's easy to find other information, and what consumers should do is cross-check

Federal Trade Commission

Identity theft - where fraudsters run up credit card bills in someone else's name - remains most common consumer fraud.

It accounting for 43% of the 380,000 complaints logged by the Federal Trade Commission (FTC).

But the FTC also found con-artists were increasingly using bogus websites and "spam" e-mail to lure their victims.

Shadow site

Last month, BBC News Online told how the world's largest online auction site eBay had been targeted by fraudsters using a shadow site to steal credit card details.

The scam involved sending e-mails to customers asking them to log on to a Florida-based website - ebayupdates.com - and re-submit their financial details.

In a statement eBay said it "never asks its users for their user ID and password."

"Fraud constitutes less than 0.01% of all transactions that take place on the site," it added.

The shadow site has been taken down.

Cross-checking

Howard Beales, head of the FTC's consumer-protection bureau, said consumers should make sure they are dealing with a reputable seller before giving out credit-card numbers or other sensitive information online.

"The great thing about the internet is it's easy to find other information, and what consumers should do is cross-check.

"If this product is telling you it's the cure for cancer, then go to the National Cancer Institute's site," said Mr Beales.

According to the FTC, 47% of consumer-fraud complaints that were not identity theft were internet-related.

This was an increase of 31% in 2000.

Service providers

Internet auction fraud was the most common online-only complaint, accounting for 13% of complaints received.

This was followed by online retailers that did not deliver what they promised.

Disputes with internet service providers, credit-protection schemes and advance-fee loans also generated a lot of complaints.

Advance fee fraud

Foreign-money schemes - such as the Advanced Fee or 419 fraud - where people are sent an unsolicited fax or e-mail offering a share of any cash successfully moved out of Africa - generated 4% of complaints.

Anyone taking the bait in such a fraud is asked to pay increasingly large sums to supposedly bribe uncooperative officials and to smooth the passage of the cash, which never materialises.

Spoof websites are increasingly being used instead of fake banking certificates to lend such cons an air of authenticity.

Greater awareness

In total, US consumers reported losses of more than $343m in 2002 to fraud, a sharp increase from the previous year, the FTC said.

Some of the increase may be down to greater awareness and reporting of offences by consumers.

But while it might be impossible to tell if the total number of consumer scams has increased, Mr Beales said, the proportion of those that take place online had definitely grown.