Study: Internet Frauds Cost Consumers $4.3M

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Internet frauds cost consumers $4.3 million during the first 10 months of this year, or $636 per person, according to a survey by the National Consumer League's Internet Fraud Watch. Online fraud totaled $3.3 million for 2000, or $427 per person, the consumer organization noted.


The consumer league said 43 percent of the people surveyed noted that their biggest worry about online shopping was that their credit card number would be stolen. Nearly one-third of respondents had a problem with their online purchase -- the most common complaint being the product or service received was not as promised. Twenty-two percent said they feared their personal data would be abused.


"Credit cards are the safest way to pay [for online purchases] because you can dispute the charges if something goes wrong," said Susan Grant, director of the league's Internet Fraud Watch. "And new technologies like substitute or single-use credit card numbers add an extra measure of protection against someone else fraudulently using your account."


The survey found that online auctions had the highest incidence of Internet fraud during the first 10 months of 2001, accounting for 63 percent of all frauds, down from 78 percent in 2000. The other top frauds involved non-auction sales of general merchandise, Nigerian money offers, Internet access services, Internet adult services, computer equipment and software, work-at-home plans, advance-fee loans, credit card issuing, travel and vacations and business opportunities.


"While auction complaints are the most numerous, consumers lose more money in some of the other top 10 Internet frauds, such as general merchandise and computer hardware and software purchases," Grant said. She noted that consumers lost an average of $845 per person to general merchandise frauds and $1,102 per person to online purchases of computer equipment and software.


The league said that while 78 percent of all fraudulent activity on the Internet is accomplished through Web sites, that figure is down from 82 percent last year. The second-largest fraud delivery vehicle is e-mail, which this year accounted for 18 percent of all online frauds, up from 12 percent in 2000.


The survey was conducted by telephone among 1,003 adults living in private households in the United States. Interviews were conducted Aug. 9-12.


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