Internet-Related Fraud: Crisis or Beat-Up?

• NCJ Number: 190944
• Author(s): Russell G. Smith
• Date Published: June 2001
• Length: 13 pages
• Sale Source: Australian Institute of Criminology
• Publication Format: Document
• Publication Type: Issue Overview
• Language: English
• Country: Australia
• Note: Paper presented at the 4th National Outlook Syumposium on Crime in Australia, "New Crimes or New Responses," held in Canberra June 21-22, 2001; downloaded October 8, 2001.

Annotation

This paper assesses current evidence used to support the proposition that Internet-related fraud has reached crisis proportions, as well as opposing evidence used to support the view that the problem has been greatly exaggerated in public discourse.

Abstract

Internet-related fraud is defined as "any dishonest activity that involves the Internet as the target or means of obtaining some financial reward." Consumer fraud occurs when goods and services are advertised on Web sites and the consumer is not provided with the product purchased. This includes practices by Internet Service Providers (ISP's), whereby they overbill and/or fail to provide the services advertised. A related problem arises when a person visits a Web site that manipulates the telephone billing system, resulting in large international calls being billed. Consumers can also be the perpetrators of fraud. As with other types of telecommunications, it is possible to steal Internet-related services by entering into a contract with an ISP and a telephone carrier and then failing to pay for the services provided. Consumers are also able to defraud merchants by entering into commercial transactions, obtaining the goods and services in question, and then defaulting on payment. In the media, a "beat-up" is a news story whose prominence and importance greatly exceeds the available supporting evidence. For the purposes of this discussion, the characterization of Internet fraud as a "beat-up" means that it has been exaggerated far beyond any material available to justify the claims. The statistical information on Internet fraud comes mainly from victimization surveys conducted in the business community as well as extrapolated estimates of loss by business analysts. On the basis of the evidence considered and the arguments reviewed, the author concludes that some aspects of Internet fraud pose a serious problem, albeit not yet in the category of "crisis." Still, in terms of the empirical data available, Internet fraud is of no greater concern than other types of economic crime, although the knowledge base is currently seriously deficient. Internet fraud differs from some other types of economic crime, however, in that it poses distinctive challenges for law enforcement related to jurisdictional problems and the kinds of expertise required to obtain evidence and identify and track down the perpetrators.