Consumer Complaints to FTC About Malware Tripled in 2010: Survey

While the number of consumer complaints to the FTC about online fraud remains small, the number of issues around spyware, malware and adware are skyrocketing.

Consumer complaints about malware, spyware and adware skyrocketed in 2010 as users struggled with increasingly sophisticated computer threats, according to the Federal Trade Commission.

The number of complaints consumers made to the FTC about malware, spyware and adware more than tripled from 6,012 issues logged in 2009 to 22,813 in 2010, the FTC said in a report released March 8. There were nine times more complaints to the FTC in 2010 than there were in 2008, the report said.

In the grand scheme of things, online fraud is still minuscule, as it accounted for less than 10 percent of 1.3 million fraud and identity theft complaints the FTC received and processed in 2010. Fraud-both offline and online-constituted 54 percent of total complaints.

Of the 725,087 fraud complaints in 2010, online fraud accounted for about 17 percent. Regardless of fraud type, about 27 percent said e-mail was the method of initial contact, while 6.7 percent reported a Website was. About 40 percent of the complaints didn't have information about the initial contact, so it is likely that the actual online numbers may be higher.

The report had two categories for online fraud. The Internet Auction category referred to the non-delivery of goods, the delivery of goods less valuable than advertised, or not getting all the relevant information about the sale. The Internet Services category included trial offers from Internet service providers; difficulty cancelling an ISP account; issues with online entertainment, gaming and social-networking services; undisclosed charges; and issues with spyware, adware and malware.

Internet auctions had the most complaints for online fraud, with 4.19 percent, followed by Internet information and adult services, at 1.76 percent. Spyware, adware and malware represented the third most common complaint, at 1.7 percent, followed by Internet access services, at 1.19 percent. Interestingly enough, difficulties with an ISP (Internet access services) were the top issues in 2008 and 2009, and spyware, adware and malware accounted for less than half a percent and barely made a blip.

The significant drop in ISP complaints also accounted for the slight decline in the total number of online fraud complaints in 2010 from 2009.

The most dramatic change in the threat landscape was in social-networking services, mirroring the rise in popularity of sites like Facebook and Twitter. While there were only six complaints from consumers to the FTC in 2009, that number jumped to 454 complaints in 2010, according to the report. In contrast, there were no complaints about social-networking services in 2008, said the FTC.

The Consumer Sentinel Network Data Book for January to December 2010 is based on data in the FTC's Consumer Sentinel Network, a secure online database with more than 6.1 million consumer complaints about fraud and identity theft.

The CSN, established in 1997, retains data for only the past five years and also includes complaints from other public service organizations, including the Internet Crime Complaint Center, the Better Business Bureau, the Canadian Anti-Fraud Centre, the U.S. Postal Inspection Service, the Identity Theft Assistance Center and the National Fraud Information Center. For the first time this year, four states submitted data, including North Carolina, Idaho, Mississippi and Minnesota. Publishers Clearing House and MoneyGram International were also included.