Yahoo! News – Identity Theft, Internet Fraud Reports Up in U.S.

Thu Jan 22, 3:13 PM ET

By Andy Sullivan
WASHINGTON (Reuters) – Americans reported losses of $437 million last year to identity theft and fraud as scam artists made themselves at home on the Internet, according to federal statistics released on Thursday.

The Federal Trade Commission said it received more than half a million consumer complaints in 2003 as scam artists financed their spending sprees with other people’s credit cards and hucksters sold nonexistent products through online auction sites like eBay Inc .

But Americans are becoming more aware of the problem and act quickly when they discover they’ve been victimized, said Howard Beales, head of the FTC’s consumer protection division.

Identity theft — the practice of running up bills or committing crimes in someone else’s name — topped the list with 215,000 complaints, up 33 percent from the previous year.

Internet-related fraud, up 51 percent from 2002, accounted for more than half of the remaining complaints as scammers found victims through Web sites or “spam” e-mail, according to an FTC report.

Auction fraud was the most prevalent form of Internet scam, the FTC said, followed by complaints about e-commerce and Internet access services.

Consumers lost an average of $1,868 per incident, though that figure was skewed by a few reports of losses of more than $1 million. Half of those who filed reports said they lost less than $228.

The actual number of victims is probably much higher, as the FTC only reported on the number of formal complaints filed by consumers. More than 60 percent of those who filed reports did not call police, the FTC said.

The FTC estimated last year that identity theft has affected one in eight U.S. adults.

Beales said the FTC was now fielding more inquiries than complaints, a sign that consumers are taking steps to protect themselves.

Credit card companies also have gotten better at stopping fraud, he said.

“There was a time when pre-approved credit offers seemed to be a significant problem for identity theft. There has been a lot of response to that problem, and today there’s no personally identifiable information in a pre-approved credit offer that’s not in any other piece of mail you get,” he said.

Consumers should keep credit cards in a safe place, shred financial statements and only shop on secure Web sites — those with a small symbol of a lock in the Web browser — to avoid becoming fraud victims, said Brian Keeter, a spokesman for Your Credit Card Companies, an industry trade group.

Congress passed laws to outlaw fraudulent spam and fight identity theft last year.

Credit-reporting bureaus will have to provide free reports to consumers annually and businesses will face restrictions on sharing consumer data under the new identity-theft measure, which was signed into law on Dec. 4 but has yet to take effect.