With the widespread use of the Internet and a growing number of applications that can be performed online, the ability to fall victim to Internet fraud has increased sharply. In 2003, $200 million in losses was reported to the Federal Trade Commission (FTC) because of Internet fraud. In almost half of the 166,000 complaint reports received by the FTC, online auctions were to blame for the Internet fraud.
The increase in complaints the FTC received regarding online auctions rose by 130% from 2001. eBay, having 93 million registered users, accounts for the majority of online auctions and has been criticized for failing to promptly act on complaints of Internet fraud as well as to indicate how much fraud is present to online users. Some critics think that revealing the prevalence of Internet fraud will hurt brand names.
The FTC just revealed that throughout 2003 there were 319 cases of Internet fraud and deception cases filed. In front of a Senate committee the director of the FTC's Bureau of Consumer Protection said the 319 Internet fraud cases involved instances of identity theft, auction fraud, investment fraud, "Nigerian scams", and cross-border Internet fraud.
Since more than 70 percent of the nation's wealth is held by citizens 55 and older, with an increase in online seniors 65 and older increasing from October 2002 from 7.6 million to 9.6 million in October 2003, seniors targeted for Internet fraud is also rising. The fastest growing group of Internet users, The Chairman of the Senate Special Committee on Aging has just announced a new initiative to raise public awareness of Internet fraud targeting older Americans.
FTC statistics has shown that since 2002 complaints for people over the age 60 has increased 80%. The SEC complained that investors lost $1.5 billion as a whole because of Internet fraud on the exchange. All of the estimations of Internet fraud are only believed to be one in ten of the actual instances of Internet fraud disclosed to the authorities, making the number of victims affected by Internet fraud potentially extremely high.
There have been estimates as high as $10 billion in losses attributed to Internet fraud. The relative ease in which Internet fraud can occur makes it essential to take as many precautions as possible to avoid becoming a victim. Companies and individuals alike are losing high amounts of money because of Internet fraud because of the ability for a website to be copied, hijacked, tampered with.
By becoming more aware of the risks, companies can make it much more difficult for criminals to commit Internet fraud. Measures such as never keeping credit card details on the web server, keeping client data secure even on local machines, ensuring payments are received from the card processor before releasing the ordered merchandise, using a secure web server and browser, having secure firewall technology for in-house servers and networks, and using digital certificates and Ids to verify merchant and customer are just a few ways to reduce risk of Internet fraud.
The availability of the Internet has created opportunity and information at a global capacity non-existent before its time. Expanding the realms of possibility will continue to grow exponentially as more information and online users increases, as well as advancements in technology are made. Better informing users and companies of how to best eliminate the risks can better combat the presence of Internet fraud.
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