Internet Fraud Complaint Center: Role in Law Enforcement and Benefits to Consumers

The Internet Fraud Complaint Center (IFCC) is a joint effort by the Federal Bureau of Investigation and the National White Collar Crime Center (NW3C), which serves as a clearinghouse for the receipt, analysis, and dissemination of complaints concerning frauds perpetrated via the Internet. Over the last few years, the FBI has witnessed a dramatic increase in the use of the Internet for criminal purposes. The Internet is a perfect vehicle for locating potential victims and provides a measure of anonymity for the fraudster. It is the FBI's belief that a central repository to house Internet fraud complaints was necessary for law enforcement to effectively address this crime problem. While other agencies currently receive Internet fraud-related complaints, the IFCC possesses the additional capability to analyze the data to identify criminal schemes and has a mechanism in place to make referrals to the appropriate law enforcement or regulatory agency.

Consumer victims of Internet fraud are often unsure of how or where to report what they suspect was criminal conduct. The IFCC provides a convenient and easy way to alert authorities of a suspected criminal activity or civil violation. Victims of Internet crime are able to go directly to the IFCC website (www.ifccfbi.gov) to submit their complaint information, relieving considerable frustration for the victim in trying to decide which law enforcement agency should receive their complaint.

For law enforcement, as well as regulatory agencies, the IFCC offers a central repository for complaints related to Internet fraud, uses the information to quantify fraud patterns, and provides timely statistical data of current fraud trends. Typically, law enforcement receives complaints in a piecemeal and fragmented fashion, most not reaching a level to advance the complaint to a formal investigation. IFCC's trained analysts search for common threads and conduct detailed analytical studies of related complaints, prior to dissemination to law enforcement. Without the immediate technical investigatory steps taken by IFCC personnel, it can become more difficult to identify the location of a website or the origin of an e-mail. By consolidating the complaint information, the IFCC is able to address the larger scope of the Internet crime problem and identify links and emerging fraud schemes.

The IFCC has been contacted by several companies that conduct significant business over the Internet in an effort to gain IFCC assistance in investigating some major frauds. These companies have reported millions of dollars in losses. The IFCC is in the process of providing a business-friendly system for rapid data transfer of multiple complaints in an effort to better serve these crime victim-companies' needs. This will permit Internet companies that are experiencing these losses to file bulk complaints, and those complaints will then be distributed by IFCC to the appropriate law enforcement agencies.

During the start-up phase of IFCC, the entire staff processed incoming complaints and forwarded them to an average of four to five law enforcement agencies. This referral process has spawned hundreds of criminal investigations throughout the country. The FBI staff at the IFCC have begun to use the data to identify multiple victims, various crime trends and same subject cases thus initiating the investigative phase of the center's operations. This process wasn't fully functional until January 1, 2001. There are two types of investigations at IFCC, one when the receiving agency initiates an investigation based on the complaint received from the center, and those investigations initiated at the center based on the information available.

From October 1, 2000 through April 6, 2001, 423 investigations were referred, and an additionally 361 pending investigation are in the process of being referred to various law enforcement agencies. These 784 Internet Fraud investigations have encompassed over 3,000 complaints and have been referred to numerous federal law enforcement agencies and 1,267 local law enforcement agencies.

These do not include the investigations initiated by the complaint referral process. IFCC has also referred 41 cases encompassing over 200 complaints to International law enforcement agencies. To date, IFCC has referred 10,371 complaints to 39,636 law enforcement agencies.

The IFCC has received complaints of victims from 89 different countries. Auction fraud is by far the most reported Internet fraud, comprising nearly two-thirds of all complaints. Payment for merchandise that was never delivered accounts for 22% of complaints, and credit and debit card fraud make up almost 5% of complaints.

There are four Supervisory Special Agents managing twenty three Internet Crime Specialist, seventeen clerical and four computer scientist positions. Hours of operation are from 7:30 a.m. until 5:30 p.m. EST, but victims can file complaints twenty four hours per day, 365 days per year.