Internet auctions and shopping centers get most fraud complaints

<br>WASHINGTON (AP) _ Phony auction Web sites that disappear after taking people's money and online shopping centers that never deliver the goods are the two most reported instances of Internet fraud,

Wednesday, March 7th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ Phony auction Web sites that disappear after taking people's money and online shopping centers that never deliver the goods are the two most reported instances of Internet fraud, according to the first FBI report on the subject.

And while studies have shown that most online shoppers' greatest fear is having their credit card number misused or stolen, those schemes comprised only 5 percent of complaints.

The report, released Tuesday, was a joint effort by the FBI and the National White Collar Crime Center, a nationwide network supported by the Justice Department that helps law enforcement agencies combat economic and high-tech crimes.

``It clearly demonstrates the need for establishing an electronic clearinghouse for the prompt receipt and referral of Internet fraud cases to the appropriate law enforcement agencies,'' said FBI Director Louis Freeh. ``It has shown that victims of crime, whether it be Internet fraud or other crimes, are using the Internet as a reporting tool.''

Auction fraud comprised 64 percent of all complaints to the government's online Internet Fraud Complaint Center. Undelivered merchandise comprised 22 percent of all complaints.

In its first six months of operation, the report center recorded about 20,000 complaints. Of those complaints, 5,273 were classified as fraud by law enforcement agencies around the country.

The report also shows that California ranks first in the number of online victims and criminals, followed by Florida, Texas, Pennsylvania and New York.

The National White Collar Crime Center said the report shows the need for a renewed effort to help refine systems for Internet transactions.

``E-business is no longer just a buzzword,'' said Texas state Securities Commissioner Denise Voigt Crawford, a board member of the National White Collar Crime Center. ``It's here to stay and we must find ways to help consumers and business have confidence in the transaction technology they choose.''

The six-month report is the first in a series of regular research that will be produced by the FBI.