Illinois emerged as a new hotbed for internet crime in 2020, though California continued to lead the nation with the largest online fraud victim losses and number of victims, according to research from Florida Atlantic University’s College of Business.
The report from FAU’s Center for Forensic Accounting, based on crime data from the FBI, also showed large growth in technical support and non-payment/non-delivery scams, which likely were the result of a surge in online shopping during the pandemic.
Online victim losses in California grew 8 percent from 2019 to $621.4 million, while the number of victims in the Golden State increased by 39 percent to nearly 70,000.
Meanwhile, Florida had the largest population-adjusted victim rate of 2,475.1 per 1 million in population. The Sunshine State had the second-highest number of victims at 53,793, a 98 percent increase from 2019, while Illinois had a 95 percent increase.
The report identified California, Florida, Illinois, New York, Ohio and Texas as the top six states for internet crime in 2020. Illinois replaced Washington from last year’s report.
Law enforcement, government agencies, policymakers and the public can use the research to increase awareness, which may be the most effective way to mitigate online crime, according to the FAU report. Many of the scams originate outside the United States, beyond the reach of U.S. law enforcement.
“Online criminals did not take a break in 2020 during the pandemic,” said Michael Crain, DBA, director of FAU’s Center for Forensic Accounting. “Internet crime continues to be a large and growing problem mainly because we are so connected online. Organizations and individuals are at risk as technology and governments alone cannot prevent online crime. The first line of defense is user awareness when clicking on links and opening email messages.”
When it comes to the different types of online crime, business email compromise/email account compromise (BEC/EAC) remained the top internet scam in 2020 with reported victim losses of $1.9 billion, followed by confidence fraud/romance scams ($600 million).
BEC/EAC is when business or personal email accounts are hacked or spoofed with the purpose of diverting and requesting electronic wire transfers to fraudulent money accounts. In confidence fraud/romance, an online scammer pretends to be in a friendly, romantic or family relationship to win the victim’s trust.
Investment fraud became third largest online crime with $336 million in losses. This is when fraudsters lure consumers (many of them seniors), offering high returns if they make an investment.
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Non-payment/non-delivery scams occur when goods or services are paid online but not sent or when payment is not received but goods are delivered. Floridians were hit especially hard, with losses growing 31 percent to $27.1 million in 2020. The number of victims in Florida increased 76 percent to 7,742.
Tech support fraud is when a fraudster pretends to be an organization’s representative offering customer, technical or security support. Losses from tech support increased globally, making it one of the 10 top crimes. Texas experienced the highest growth in victim losses of 303 percent over 2019.
“Much online crime comes from organized criminal groups outside the United States,” Crain said. “The recent ransomware attack on Colonial Pipeline, resulting in a major fuel line shutdown and long gasoline lines, shows the limits that companies and governments have in prevention. Although Colonial got lucky in recovering part of the ransom it paid, the criminals are likely beyond the reach of the U.S. government.”
Meanwhile, identity theft, when a scammer obtains a victim’s personal information to commit fraud or another kind of crime, remained a persistent problem, particularly in Florida. For the past two years, the Sunshine State pushed past California in victim losses and had the highest losses among the six top states.
Source: Florida Atlantic University
