Cyber Crime: Taking a Toll on the Economy and You

According to a recent study from Norton Cyber on Internet identity theft and other types of Internet crime, 2011 statistics from 24 developed countries reveal that total online losses to various forms of cyber crime topped $388 billion. In the US alone, the same report states, over 74 million people were victims of some form of online criminal activity in 2010. Cyber crime poses a significant threat to online commerce, personal safety, and economic security, yet it goes largely unreported and unprosecuted.

Cyber crime includes the same kinds of illegal and immoral activity that has been around for years, but new variations have emerged. Cyber bullying, for instance, has taken on an identity and urgency far beyond the schoolyard of old. And the child pornography industry’s reach has widened considerably.

But many online scams have been around as long as the Internet itself, and many of the more primitive forms of internet crime are simply variations of old standbys like the bait and switch, or pyramid schemes of some kind. The ubiquitous “Nigerian prince” emails and their many variations are only updated versions of the old con where someone tells an unsuspecting mark that they need help to handle some recently found or won money.

Other kinds of crimes, such as identity phishing, in which the scammer collects personal information by posing as a legitimate entity, are variations of the old phone calls purporting to be from an individual’s bank or doctor, with requests to “update information.” But other kinds of crime are made possible only by the Net and the easy sharing of information. Cyber stalking, for example, is only possible because people post so much personal data to social sharing sites. And hacking personal business accounts is easy for a dedicated cyber criminal.

While some of the effects of cyber crime are merely inconvenient, resulting in the need to change a password or create a new email account, many are devastating, with entire life savings wiped out, or a reputation irreparably damaged. And the potential effects of cyber crime go far beyond the individual, as cyber terrorism has the potential to damage global commerce as well as the national and economic security of virtually any nation in the world.

Given the escalating threat of cyber crime, why are these types of criminal activity so rarely prosecuted? Seasoned online marketer, Jason Hartman, says one obvious answer is the anonymity of the Internet, where smart hackers can be sure that their cyber footprint remains virtually untraceable. Another is, surprisingly, the reluctance of many victims to report incidences, small and large, of Internet crimes.

Doing so isn’t easy. There’s no central authority to report to, and local authorities may not get involved since the crime itself isn’t local. So Internet users take the risk of being scammed or targeted as an inevitable, if unsavory, aspect of doing business online. The onus falls on users to protect themselves with antivirus software, encrypted passwords, and common sense. And while major hackers may be tracked and prosecuted, many smaller criminals are never found.

Global networks manage national security and drive commerce around the world. Underreported and largely unnoticed, cyber crime in all its forms poses risks not just for individuals, but also for the country as a whole. (Top image: Flickr | Dan Hankins)

The American Monetary Association Team

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