This decade will likely go down in history as the time when online commerce finally came into its own. Even in 2008, with a sluggish US economy, online revenue has been brisk for many companies, and studies show that public acceptance of buying online has reached a new high mark. But as e-commerce continues to boom, state officials are also receiving a record number of consumer reports of scandals, spyware and e-mail spam.
In the state of California alone, nearly 9000 consumers reported cases of Internet fraud last year. New York and Illinois also had record numbers of complaints, according to Mercurynews.com. The greatest number of complaints dealt with identity theft and e-mail scams; but others involved spyware, defective software and online delivery and service-based issues.
The Federal Trade Commission received over 220,000 Internet abuse and fraud complaints in 2007, up significantly from the previous year. Experts say that the actual number of consumers who are victims of identity theft or other online-based scams could be much higher, as many victims are not even aware they had been taken.
So far, individual states have bore the brunt of dealing with Internet scam complaints. But most states have focused primarily on child pornography and online sexual predators, leaving many scammers to continue to victimize the public unfettered.
The monetary affect of Internet fraud is considerable: it is estimated that spyware, “phishing” and other online scams cost over $7 billion in lost revenue in 2007. With online scams being reported in record numbers, many e-commerce retailers are getting nervous. The perception of the Internet as a safe and stable environment in which to shop is critical to those who do business online. Without that, online shopping revenue could easily return to where it was 10 years ago, when consumer confidence in buying online was considerably low by today’s standards.
Washington State and New York have been among the most aggressive in the US in going after online scammers, according to recent studies. California and Illinois also took a proactive stance toward online crime, while states like Louisiana and Tennessee were among the weakest in pursuing e-crime cases.
Since most incidents of Internet fraud are handled at the state level, there is not yet a Federal coordinating office to keep track of cases. The Federal Trade Commission handles certain cases of online crime, but is not obligated to coordinate with individual states. Many experts say the time has come for a federal agency specifically devoted to the aggressive pursuit of cyber-crime, and protecting consumer confidence online.
