By Anand Vasu
More than $4 billion was lost to Internet Crime in 2020 and nearly 800,000 cases were investigated, the Federal Bureau of Investigation said in its annual Internet Crime Report.
The top three crimes reported in 2020 were phishing scams, non-payment/non-delivery scams, and extortion. In 2020, a new brand of scams exploiting the Covid-19 pandemic emerged, accounting for 28,500 complaints.
The number of investigations into phishing complaints rose from 114,702 in 2019 to 241,342 in 2020. Adjusted losses from phishing and related scams were over $54 million. The only other type of scam that saw such a significant increase was identity theft, for which the corresponding numbers were 16,053 in 2019 to 43,330 in 2020.
The Internet Crime Complaint Center (IC3) is key to the FBI’s cyber mission and provides the public with a trustworthy source for information on cyber criminal activity, and a way for the public to report directly to the Bureau when they suspect they are a victim of cyber crime. IC3 performs multiple functions in combating Internet Crime, starting with the receipt of complaints, to analysis, and referrals of complaints to hosting a remote access database that law enforcement can access.
“The year 2020 will forever be remembered as the year of the Covid-19 pandemic. The global impact was unlike anything seen in recent history, and the virus permeated all aspects of life,” the report said. “Fraudsters took the opportunity to exploit the pandemic to target both business and individuals. In 2020, the IC3 received over 28,500 complaints related to Covid-19.”
“Unfortunately, criminals are very opportunistic. They see a vulnerable population out there that they can prey upon,” said FBI Section Chief Steven Merrill of the Financial Crimes Section.
2020 was also not a good year for those who fell prey to Business Email Compromise (BEC)/ Email Account Compromise (EAC) schemes, which accounted for losses of $1.8 billion. In the last year, the FBI observed more instances of identity theft, which was later used to create bank accounts that received stolen or illegally obtained cryptocurrency.
The Recovery Asset Team, which attempts to freeze transactions that could be fraudulent, reported an 82% success rate in 2020 across 1,303 incidents. An example of this was a $60 million transfer to a Hong Kong company from St Louis. When it was found that this was a fraudulent transaction, the FBI, working with law enforcement in Hong Kong, ensured that the transfer did not reach the recipient, and successfully initiated a recall to the victim.
Tech support fraud, in which a criminal claims to provide customer, security, or technical support or service accounted for losses of $146m, which represented a 171% increase since 2019. The majority of victims in this type of crime were senior citizens — 66% of victims were over 60 years of age — and they represented 84% of losses in this category.
At least two call centers operating out of India that were allegedly pulling off tech support fraud crimes were flagged. In one case trials are pending, while in the second case, three individuals were arrested and incarcerated following an investigation by the Indian Central Bureau of Investigation.
In 2020, the IC3 received 2,474 complaints identified as ransomware with losses of over $29.1 million. Ransomware is a type of malicious software, or malware, that encrypts data on a computer making it unusable. Criminals then threaten to destroy the data, or release it to the public, unless a ransom is paid.
In the 2020 report, California accounts for the most losses, over $621 million and also the most victims — 69,541, with Florida being the only other state with over 50,000 victims.