Direct Losses

Computer crimes are increasingly in the news.

When Willie Sutton[1] was asked why he robbed banks, he famously replied, "Because that's where the money is." Today, criminals have learned where the money is. Instead of settling for a few thousand dollars in a bank robbery, those with enough expertise can walk away from a computer crime with many millions.

Discussion with the Law Enforcement Agencies in the UK indicates that there are no overall statistics for Internet crime collated and published by any one organisation. There are a number of organisations in the UK that monitor specific trends of Internet use but they are all limited by:

·         Being trusted by the respondents;

·         Scope of survey;

·         Size of population and sample;

·         Skewing by the reporting organisations for a variety of reasons.

·         Truthfulness of the respondents;

It is for this reason that specific results recorded in the US and generic reports from the US and UK are used for quantification purposes.

Internet Fraud Watch

One of the many threats facing consumers today is fraud. Criminals attempt to raid the pockets of consumers over the phone, through the mail, in person or over the Internet.

To fight this growing threat, the National Consumers League (NCL) founded the NFIC in 1992. NFIC was designed to fight telemarketing fraud through prevention and by improving the enforcement capabilities of federal and state agencies.

In March 1996, the NCL launched the Internet Fraud Watch (IFW). IFW produces statistics of Internet fraud reported in the US but which may be perpetrated in other parts of the world.

These reports refer to reported domestic complaints only and so those not reported or outside the US are not included, but they do include cases reported where the victim was in the US even if the perpetrator was outside the US.

Figure 20 - Incidents reported to IFW 1996 - 2005
[Source: IFW Reports]. In late 2003, eBay removed the automatic report a crime button from the eBay web site, accounting for the dramatic fall in 2004 and subsequent years.

The table below shows the top 10 Internet scams between 1996 and 2005 with their specific rankings for the relevant year (1 - 10)

Figure 21 - Rating for the top 10 Internet scams 1999 - 2005 [Source: IFW Annual Reports]

The percentage ranking for the Internet scams above is given for 1999 - 2002. These are the only years that these statistics have been published.

Figure 22 - Internet scam percentage ratings 1999 - 2002
[Source: IFW Annual Reports]

Figure 23 - Total Internet scam losses as reported to IFW 1996 - 2002
[Source: IFW Annual Reports]

Reported Complaints to the IFCC

The Internet Fraud Complaint Centre (IFCC) was set up as a joint effort between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Centre (NW3C). This has now become the Internet Crime Complaint Centre (IC3)

IFCC's mission is to address fraud carried out over the Internet.

IFCC defines Internet fraud as any fraudulent scheme in which one or more components of the Internet, such as Web sites, chat rooms, and Email, play a significant role in offering nonexistent goods or services to consumers, communicating false or fraudulent representations about the schemes to consumers, or transmitting victims' funds, access devices, or other items of value to the control of the scheme's perpetrators. The frauds range from simple geometric progression schemes to complex frauds. The Internet appears to be a perfect manner to locate victims and provides an environment where the victims don't see or speak to the fraudsters. [IFCC 2003][i]

The IFCC only started operation on May 8^th 2000.

Figure 24- Total number of complaints received by the IFCC relating to Internet fraud 2000 - 2005
[Source: IFCC/IC3 Annual Reports]

The table below shows the top 10 Internet Complaints between 2000 and 2002 with their specific rankings for the relevant year (1 - 10). Note These are the only years a complete breakdown is available for

 

Figure 25 - Top 10 Internet complaint categories 2000 - 2002
[Source: IFCC Annual Reports]

Figure 26 - Top percentage ratings 2000 - 2002
[Source: IFCC Annual Reports]

Other Crime Statistics

There are a number of sources of Internet crime statistics and just two have been shown below with their sources. These both show 'direct' as well as 'indirect' losses.

WebSense

[2002 WebSense][ii]

·         U.S. businesses spent $2.6 billion to clean up the Code Red virus alone [Source: Computerworld];

·         In a study commissioned by the FBI, 78% of surveyed companies reported that employees had abused Internet privileges, such as downloading pornography or pirated software [Source: Computerworld];

·         A report by the National Research Council estimates that there are between 2 million and 8 million subscribers to pornography Web sites, and that they paid between $40 and $100 for a year, for a total of approximately $800 million in 2002 [Source: CBS MarketWatch];

·         A survey conducted on behalf of start-up Open Orchard, funded by British Telecom, found that Internet misuse is costing Britain's small businesses almost £1.5 billion per year [Source: BBC News];

·         Jupiter Media Metrix estimates that online pornography revenues in the US will grow from $230 million in 2001 to $400 million by 2006 [Source: eMarketer];

·         By 2006, Jupiter Media Metrix predicts that revenues from online music, games and audio-visual entertainment will far outweigh revenue from online porn [Source: eMarketer];

·         The research group Datamonitor forecasts that the online gaming market will grow from $670 million in 2002 to $2.9 billion in 2005. While the largest market for online gaming is currently South Korea, the United States will bring in the most online gaming revenue by 2005 [Source: NUA Internet Surveys];

·         A research report published by the Informa Media Group estimates that worldwide revenue from e-gambling will climb to $14.5 billion by 2006 [Source: eMarketer];

·         Online shopping is dominated by Amazon.com and eBay both at home and at the office. Only 5.7 million workers visit eBay, compared with 21.5 million for the most-visited site, Yahoo. But eBay visitors stay at the auction site the longest, almost three hours [Source: Nielsen/Net Ratings].

Cerbian

[2002 Cerbian]

·         82% of U.S. business executives surveyed by the consulting firm Dataquest (a division of the Gartner Group) believe Internet use should be monitored at their companies [Source: InformationWeek Online];

·         56.5% of employees feel that surfing the Net or sending non-work-related Emails decreases productivity, and 31% of employers said that they restrict employee Internet/Email usage [Source: Vault.com survey];

·         In 2001, 60.7% of employees surveyed said they visit Web sites or surf for personal use at work (up from 50.7% in 2000) [Source: UCLA study on Internet/Email use];

·         70% of all Internet porn traffic occurs during the nine-to-five workday [Source: SexTracker];

·         32% of those who have Internet access at work used the Internet while on the job to buy holiday gifts, while only 24% of Internet users as a whole purchased gifts online. This suggests that people are taking advantage of fast connections at work [Source: Pew Internet & American Life Project];

·         In a survey of Internet sites, the majority reported that traffic to their site is heaviest during work hours. 14% reported that traffic was highest from 7am to 10am, 24% stated it was highest from 10 am to 2pm, 24% from 2pm to 5 pm, 20% from 5pm to 8pm, and 18% from 8pm to 7am [Source: Jupiter Communications];

·         Finance sites reached over 30 percent more work users who spent nearly double the amount of time -- an average of 33 minutes per month -- online than home users [Source: NielsenNetRatings, as reported by Reuters];

·         Thirty-two percent of those who bought holiday gifts online in 2001 did at least some of their holiday shopping from work, up from 26% in 2000 [Source: Pew Internet & American Life];

·         Popular sites that are not always work-related attract many visitors during the work hours. Expedia.com gets 47% of its traffic during the workday, while Travelocity, MSNBC, iWon, and Weather.com reported receiving 46%, 42%, 42%, and 41% of their total visits during working hours [Source: Jupiter Communications];

·         31.2% of employees feel it is appropriate to surf non-work-related sites up to 30 minutes a day, 14.8% said up to one hour is appropriate, and 9% said over an hour, while only 26.6% of employers feel it is appropriate for employees to surf non-work-related sites up to 30 minutes, 8.6% said up to one hour, and 4.2% said over an hour [Source: Vault.com survey];

·         Web users at the office take advantage of high-speed connections to access broadband entertainment sites such as Broadcast.com and MP3 more frequently than at home [Source: NielsenNet Ratings];

·         In a recent study conducted by Net Value, 27.5% of the younger population in the U.S. (age 17 and under) had visited an adult web site [Source: Net Value];

·         53% of teens have encountered offensive Web sites that include pornography, hate or violence. Of these, 91% unintentionally found the offensive sites while searching the Web. [Source: The Safe America Foundation]

·         37.1% of employees said they surf the Web constantly at work, 31.9% said a few times a day, 21.3% said a few times a week, and only 9.7% said never [Source: Vault.com survey];

·         Shopping sites reached 18% more Internet users within the workplace than at home [Source: NielsenNet Ratings];

·         During work hours 9% of employees earning under $35K surf the Net for a new job, while 11% of workers earning $75K to $100K do the same [Source: Greenfield Online];

·         28.83% said that their employer had caught them surfing non-work-related sites, although 54% of employers said that they have caught an employee surfing non-work-related sites at work [Source: Vault.com survey];

·         Americans are spending more time surfing at work and less time surfing at home. In a typical day in 2001, 54% of adults went online only from home, down from 59% in 2000. But the percentage that goes online only from work increased in the same time period from 18% to 21% [Source: Pew Internet & American Life];

·         A research report published by the Informa Media Group estimates that worldwide revenue from E-gambling will climb to $14.5 billion by 2006 [Source: eMarketer];

·         Secret monitoring by the U.S. Treasury Department of Internet use among Internal Revenue Service employees found that activities such as personal Email, online chats, shopping and checking personal finances and stocks accounted for 51 percent of employees' time spent online. The top non-work Web activity favoured by IRS employees was going to financial sites. Chat and Email ran a close second, followed by miscellaneous activities (which included visiting adult sites), search requests, and looking at or downloading streaming media [Source: Chicago Tribune and Business 2.0];

·         Napster music swapping software was found on about 20% of over 15,000 work PCs examined [Source: eMarketer.com];

·         One in five men and one in eight women admitted using their work computers as their primary lifeline to access sexual explicit material online [Source: MSNBC];

·         According to a recent report from comScore Networks, people shopping online from work spent more money in 2001 than those who bought online from home or from college. At-work buyers spent an average of $229 per month in 2001 whereas at-home buyers spent $165 and college buyers spent $146 [Source: comScore Networks];

·         An American Management Association survey this year found that 38 percent of the major U.S. companies polled check their employees' Email and 54 percent monitor Internet connections [Source: AMA];

·         28% of those who made gift purchases did so from their offices or cubicles [Source: Pew Internet & American Life Project];

·         The No. 1 search term used at search engine sites is the word 'sex', according to Alexa Research. Users searched for 'sex' more than other terms such as 'games', 'travel', 'music', 'jokes', 'cars', 'weather', 'health' and 'jobs' combined. The study also found that 'pornography/porno' was the fourth-most searched for subject [Source: Alexa Research];

·         Users of online auctioneer eBay Inc. at work spent 157 minutes at the site in January compared with 126 minutes while at home. Long a favourite among at-work surfers, eBay ranked 7th among the most-visited sites for at-work surfers. However, eBay ranks first in terms of average pages per person and time spent per month, at almost 300 pages and two hours per person. [Source: NielsenNetRatings, as reported by Reuters and Business 2.0];

·         According to a survey of 2,100 firms by the American Management Association, 17 percent have fired employees for misusing the Internet. 26 percent have given workers formal reprimands and 20 percent have issued informal warnings [Source: AMA];

·         The top 3 word searches on the Internet: 1) sex; 2) mp3; 3) hotmail [Source: Wordtracker.com].