Broadly, illegal activity involving a computer may be called a cybercrime. With the advent of the Internet, cybercrime has exploded – not surprising with over one billion people using the Internet worldwide. There is no shortage of potential targets, and victims and perpetrators can be separated by oceans.
The anonymity of the Internet allows for low costs and leaves few traces, and cybercriminals may be either solo operators or parts of larger schemes, possibly even affiliated with organized crime. Ironically, technology makes it easy to create fraudulent online material that looks identical to the Internet marketing Web pages of legitimate entities.
The increase in Internet activity has brought more prosecution. Because of the facelessness of those committing these crimes, it is easy for law enforcement investigators to use circumstantial to prosecute the wrong people.
Unified Law Enforcement Action
The Internet Crime Complaint Center (IC3) is a joint program of the Federal Bureau of Investigation (FBI), the U.S. Department of Justice’s (DOJ’s) Bureau of Justice Assistance (BJA), and the National White Collar Crime Center (NW3C), a nonprofit organization dedicated to supporting law enforcement in its fight against “economic and high-tech crime.”
The IC3 is a clearinghouse for complaints of cybercrime and related civil law violations. Complaints filed with IC3 online are reviewed by analysts for forwarding to local, state, federal or international law enforcement, or civil agencies with jurisdiction to investigate and prosecute potential cybercrimes.
The IC3 released its 2009 report on cybercrime in March and the findings show an explosion of illegal online activity. For example, the number of complaints filed with IC3 in 2009 was up over 22 percent from 2008 numbers. Monetary loss connected to online fraud almost doubled to about $560 million compared with $265 million the year before.
Online criminal complaints increased substantially again last year, according to the report. The IC3 received 336,655 2009 complaints, a 22.3 percent increase from 2008. The total loss linked to online fraud in 2009 was $559.7 million, up from $265 million in 2008.
This growth has placed great pressure on law enforcement to “do something” about the problem. This usually means the police arrest more people and prosecutors prosecute more. The increased pressure on law enforcement can lead to a “rush to judgment,” such that false accusations are levied at innocent people.
Common Types of Financial Cybercrimes
Identity theft: Someone can steal your identity by using personal information like your social security number (SSN), driver’s license number or credit-card account number to commit fraudulent transactions such as opening credit or bank accounts, taking out loans or making large purchases. The Internet can be the vehicle both for pilfering of personal information, and for using it to commit online misrepresentation and theft. Such crimes can severely damage credit ratings.
Internet fraud: The Internet can be used to commit many illegal acts involving fraud. E-mails, chat rooms and websites are used to conduct a variety of fraudulent schemes. Fraud may be used to approach individual victims online, engage in fraudulent business activities or deal deceptively with banks and other financial institutions.
Incomplete transactions: In any exchange of goods or services for money, the parties must act in good faith and rely on each other to complete the transaction. Unfortunately when things are bought over the Internet, either party can get burned. The seller can keep the money and not send the item, or the buyer can keep the item and not pay for it. Many variations on this theme are carried out every day in cyberspace.
Online auction fraud: Auction sites commonly concern allegations of economic fraud. Auction websites conduct virtual auctions for a variety of items and are extremely popular with the public. Unfortunately, fraud can occur in several ways, such as:
- A seller may never send the item to the winning bidder after receiving payment
- A seller may send an inferior, damaged or knockoff product
- A buyer may submit a high bid to hold off other bidders and withdraw it at the last minute so a low bid by an associate is successful
- A seller may arrange for someone to drive bids higher
International cybercrime: Schemes international in scope include invitations to enter foreign lotteries, and money offers in exchange for assistance with money transfers into the United States or into overseas accounts for supposedly sympathetic causes. Nigeria is often associated with these dangerous offers, specifically called 419 schemes in reference to a section of the Nigerian Criminal Code.
Phishing – Phishing is an attempt to get personal information by using an e-mail that appears to be from a trusted source such as your bank, asking that sensitive data be sent by return e-mail. Phished e-mails are often sent en masse.
Spoofed websites – Those with technical expertise can create professional-looking websites for fake charities designed to obtain personal information in the process of collecting donations.
Protect Yourself from Overzealous Prosecution
With the wide variety of cybercrimes and the enormous increase in their frequency, law enforcement is under pressure to prosecute anyone it suspects of cybercrime. The novelty of methods used to commit cybercrimes often means that many law enforcement entities – with little investigative experience – are not prepared to fully investigate these cases. It is in this context that mistakes are often made in determining whom to charge with a given cybercrime.