Occurrences of online fraud complaints: 2002 through 2015

Abstract

Purpose The purpose of this paper is to report on the findings and lessons that were learned from the many cases of internet fraud complaints that are gathered by the Federal Trade Commission in the USA. The implications that are contained in the behavior of the complaints and trends identified are critical for addressing all types of online criminal activities in the increasing world of cybercrimes. Design/methodology/approach Data for this paper are extracted from the Consumer Sentinel Network Data Handbook covering a period of 13 years. Using the raw data, the occurrences were plotted and trends (number of cycles, time between cycles, and leading state and lagging states) were identified. Descriptive statistics covering the 13 years were examined and discussed. Using 20002 as the base year, the rate of growth of each of the states were ranked annually and were tested for stability and predictability using non-parametric approaches. Findings The key findings are indigenous to the occurrences of online fraud complaints in the USA. However, as the leading nation with the best database on fraud complaints, the findings are mission critical to fraud prevention across the globe. Specifically, this study found that since 2002, there have been four distinct cycles. Each cycle is clearly noticeable because there is a rapid growth in the number of crime complaints in the beginning half of the period followed by a slowing down period. However, the speed of change from one cycle to the next is steeper and the time gap is faster. While it is true that from the perspective of all the 50 states, the ranks appear to change every year and thus are not stable. However, the majority of the changes are relatively small so their relative positions by rank are still predictable. Originality/value The paper extends existing understanding of online fraud occurrences in the USA. The findings are timely and based on longitudinal data that span over a decade. The four new cycles identified are critical to the body of knowledge. The observed change in time from one cycle to another and its changes from a mathematic to a geometric one are also new. The findings are invaluable to persons working in law enforcement related occupations (auditors, lawyers, forensic experts, among others) and who must deal with the increasing problem of online fraud and cybercrimes.

Financial and other frauds in the United States: a panel analysis approach

“…It seems that where there are more people and the economy is more vibrant, there are more fraud complaints. These results are consistent with the findings reported in earlier studies (Koong et al, 2008a;Koong et al, 2008b;Koong et al, 2017;Liu et al, 2005).…”

“…Reports related to online fraud have been launched by the National Consumers League's National Fraud Information Center since 1996. In 2002, the Consumer Sentinel, a computer crime report, was publicly available in the USA and by 2015; it was found that the number of complaints filed had increased over 12-fold even though the government expenditure on consumer spending and business protection had a new subsection that dealt with international collaborations against cybercrimes (Koong et al, 2017;Qin et al, 2012). Some of the most common current crime categories indicated include: Advanced Payments for Credit Services, Auto-Related Complaints, Banks and Lenders, Credit Bureaus, Information Furnishers and Report Users, Credit Cards, Debt Collection, Foreign Money Offers and Counterfeit Check Scams, Health Care, Imposter Scams, Internet Auction, Internet Services, Prizes, Sweepstakes and Lotteries, Telephone and Mobile Services, Television and Electronic Media and Shop-at-Home and Catalog Sales (Consumer Sentinel Network Data Book, 2015).…”

“…From 2002 to 2015, the number of complaints filed with the FTC increased 12-fold (Koong et al, 2017). It should be pointed out here that all these previous research and reports were done using quantitative techniques that can only report aggregate results from a single dimension.…”