Reports of Internet and online fraud have tripled since the Internet Fraud Watch was launched by the National Consumers League in March of 1996. The IFW, a project which operates in tandem with the League's National Fraud Information Center, received an average of nearly 100 fraud reports per month in the first seven months of 1997, compared to 32 per month last year. More than 3.5 million people visited the NFIC's web site from February 1996 to August 1997. The number of "hits" per week is currently 70,000 to 90,000, and e-mails inquiries are also steadily rising, from 100 per week in early 1996 to over 1,500 per week by the end of July, 1997.
To help consumers use the Internet and online services safely, on September 10, 1997 the League unveiled new IFW pages on the NFIC web site. The top 10 categories of Internet fraud in the first seven months of this year were also released.
In analyzing those 1997 Internet fraud statistics, it was clear that new subject categories were needed to reflect the numbers of fraud reports concerning "Sales of General Merchandise" and problems with web "Auctions." "Sales of Computer Equipment/Software" was eliminated and reports in that former category were split into General Merchandise and Auctions.
It is also interesting to note that Pyramid Schemes, while still prevalent, no longer top the list of the most common scams. It should be noted that there were far more fraud reports in the Internet Services category in 1997 because of the "Moldova" case, in which consumers who thought they were able to view free pictures on a web site were unknowingly charged through international call charges on their telephone bills.
As compared with last year, the top 10 Internet Scams are:
| 1996 | 1997 (January - July) | ||
| 1 | Pyramid Schemes/Multilevel Marketing | 1 | Sale of Internet Services |
| 2 | Business Opportunities | 2 | Sale of General Merchandise |
| 3 | Sales of Computer Equipment/Software | 3 | Auctions |
| 4 | Sale of Internet Services | 4 | Pyramids Schemes/Multilevel Marketing |
| 5 | Work-At-Home Schemes | 5 | Business Opportunities |
| 6 | Club-Memberships/Buyers Clubs | 6 | Work-at-Home Schemes |
| 7 | Magazine Subscriptions | 7 | Prizes and Sweepstakes |
| 8 | Investments | 8 | Credit Card Offers |
| 9 | Scholarship Services | 9 | Book Sales |
| 10 | Prizes and Sweepstakes | 10 | Magazine Subscriptions |
"It's like a giant yard sale in cyberspace," said National Fraud Information Center/Internet Fraud Watch director Susan Grant. "Consumers purchase a variety of items that are advertised on-line, but they don't always get what they bargained for."
The most common signs of fraud are extravagant promises of profits, guarantees of credit regardless of bad credit history, incredibly low prices or prizes that require up front payments.
Surprisingly, more than 60 percent of Internet fraud victims pay by check, cash, or money orders, and 19 percent by credit card. Others pay by telephone bills, bank account debits, and wire transfers.
"Consumers lose between $10 to $10,000 in Internet scams," said National Consumers League president Linda Golodner. "Cybercrooks are in your wallet with a click of the mouse."
Internet Fraud Watch assists fraud victims by relaying reports daily to more than 150 law enforcement agencies in the United States and Canada, including the Federal Trade Commission, state Attorneys General and police departments.
The NFIC Web site has already won 13 Internet awards for the quality of consumer information it provides. The new Internet Fraud Watch section of the site features tips to help consumers avoid fraud, articles about activities by government agencies and the private sector to combat abuses, bulletins about the latest scams, and information about using online services and protecting one's privacy in cyberspace.
For additional information, check out press material at the National Consumers League website.
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