Scot-Free Scams

By eweek  |  Posted 2001-02-26

One of the biggest problems for merchants facing Internet fraud is that criminals are getting more sophisticated and there are very few cops on the beat to catch them.

"The Internet gives these criminals anonymity, and the international angle makes it very difficult to prosecute these criminals in jurisdictions outside of the U.S.," said Mark Rasch, vice president of cyberlaw at Predictive Systems in Reston, Va.

Governments at all levels have failed to fund resources adequately to address cybercrime, so criminals exploiting the Internet have little fear of law enforcement, said Avivah Litan, vice president of payment services at Gartner Group, an information technology consulting firm in Stamford, Conn. "Many of the crimes are going unpunished," Litan said.

Approximately 97 percent of all law enforcement funding for cybercrime investigation in the U.S. is spent on about 300 federal agents out of the 600,000 law enforcement agents serving the U.S., Litan said.

In 2000, federal discretionary spending on law enforcement amounted to $17 billion, and only $10 million of that was allocated for computer-crime-related training, staffing and support.

When Internet merchants get stuck with a bill, they can report it to local police departments. If the police department has a detective working on credit-card fraud, theyre lucky.

However, in many states, credit-card fraud is considered a misdemeanor unless the value of the loss reaches $400, said Michelle Rahm, owner of in Loveland, Colo. "Many police departments simply do not have the manpower to dedicate to misdemeanor crimes, and the crimes and the cases are closed, leaving the merchant holding the bill," she said.

For theft of goods worth $400 to $15,000, the crime is considered a felony, and the best place for merchants to turn is the Federal Bureau of Investigation, experts said. The agency runs the Internet Fraud Complaint Center at, which takes online complaints from merchants.

Even the government admitted cybercriminals are difficult to catch.

"With scores of Internet-connected countries around the world, the coordination challenges facing law enforcement are tremendous. And any delay in an investigation is critical, as a criminals trail often ends as soon as he or she disconnects from the Internet," said a March 2000 report from the Presidents Working Group on Unlawful Conduct on the Internet.

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