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.



Year   

Complaints Received

Dollar Loss

 

2009

336,655    

$559.7 million

  

2008  

275,284

$265 million

  

2007   

206,884  

$239.09 million

  

2006    

207,492

$198.44 million

  

2005    

231,493   

$183.12 millio


News Headlines





FBI: Internet fraud losses more than doubled in 2009


NetworkWorld.com  The top five categories of complaints include non-delivered merchandise and/or payment; identity theft; credit card fraud, auction fraud, and computer fraud
Why the Future of Payments Innovation is in the Cloud

Why is the payments industry now so focused on the notion of cloud computing? In his latest blog series on Invisible Engines, industry expert David S. Evans examines what "payments in the cloud" is and how it will change the industry's ecosystem. Read more | See the entire Briefing Room
Big Merchants Pay $225,000 on Average for PCI Audits, Study Says

Getting an annual assessment to determine their compliance with the Payment Card Industry data-security standard costs big merchants an average of $225,000, but some pay $500,000 or more and...  http://www.digitaltransactions.net/newsstory.cfm?newsid=2470
No substitute for safe computer habits

Seattle Times  As for incoming calls not showing up in your call log or being identified by Caller ID, I'd suggest contacting your telephone service provider
Online fraud levels increase as positive signs are seen over card fraud

SC Magazine UK  A decline in the amount of card fraud is a positive, but UK cardholders should remain vigilant. Figures released by the UK Cards Association showed that
ABI: RFID Market To $5.4 Billion This Year, $8.3 Billion By 2014

Although true item-level RFID is still years away, ABI Research is still confident that RFID sales will hit $5.4 billion this year. And it projects that number will reach $8.3 billion by 2014.   The tagged segments expected to lead the way include real-time location systems, baggage handling, animal ID and a smidgen of item-level use in high-end fashion and other similar high-priced retail offerings. Read more.
MasterCard's Momentum in Emerging Markets Makes Innovation Move

Gary Flood has been at MasterCard for 24 years and is currently the President of Global Products and Solutions. With new and exciting innovations emerging everyday, Flood sees both technology and consumers driving solutions that will shape the future of the payments industry. What's next with MasterCard? Listen to the interview
First Data CEO Capellas steps down as firm narrows Q4 losses

Finextra  Meanwhile, the e-payments processor has narrowed its fourth quarter net losses on higher revenues and lower charges. Capellas was installed as CEO in 2007
Banking fraudsters 'switch to raiding online accounts'

BBC News One factor in this drop has been the introduction of online payment tools, such as MasterCard Secure Code and Verified by Visa, which ask the card owner to
U.S. online retail sales will grow by 11% in 2010 and by an average of 10% per year through 2014, Forrester Research predicts. By 2014, the web will directly account for 8% of U.S. retail sales and influence 53% of consumer purchases.
BANKS FAILING TO PROTECT SMALL BUSINESSES FROM CYBER CRIME WAVE
The US banking industry is failing to protect its small business customers from a destructive epidemic of cyberfraud that is sweeping the nation, according to research by Guardian Analytics and Ponemon Institute   More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21169


B of A helps you avoid the $38 coffee

Marketplace (blog)  A chip and pin debit console. (Christopher Furlong/Getty Images) Steve Chiotakis: Maybe this has happened to you: You buy a $3.00 coffee, put it on a debit
CITI EXPOSES 600,000 SOCIAL SECURITY NUMBERS
US banking giant Citi has been forced to apologise to around 600,000 customers after sending them year-end tax statements through the post with social security numbers printed on the outside of the envelopes.   More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21170


O'Brien: How dot-com start-ups have changed 10 years later

San Jose Mercury News  They're led by longtime angel investor Ron Conway, who has invested in more than 500 startups, including Google, PayPal, and Zappos
Payments in the Cloud

Why is the payments industry now so focused on the notion of cloud computing and "payments in the cloud?" What is it and how does it change the industry's ecosystem? Our latest Briefing Room covers the topic with articles, interviews, webcasts, data points and more to keep you "in the know." Get debriefed!
Customers rely less on credit cards when buying online

WalletPop (blog)  Overall, debit cards were the second most popular method of online payment. "One of the major factors is the control of spending and convenience of purchase
Cyberattacks raise e-banking security fears

Computerworld  ... accounts show that many banks, especially small community banks, have still not deployed such controls, said Avivah Litan, a Gartner Inc. analyst.
 FEATURED ARTICLE

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



This Free IT-Security news feed was compiled and is provided by E-Secure-IT; the most comprehensive and complete Business Risk Management Intelligence Service and IT-Security Risk and Threat Early Warning Service available in the market today.  They offer a 30 day complimentary subscription. 


Visit them at www.e-secure-it.com or email more-info@e-secure-it.com for more information on their available services.

Disqus for ePayment News