Ride the Lightning

FBI Recovers 75% of Monies Reported Fraudulently Wired in 2018

April 30, 2019

Well, that really shouldn't be the headline, but it sure was my biggest takeaway from SC Magazine's recent story about the issuance of the FBI's 2018 Internet Crime Report.

The FBI’s Internet Crime Complaint Center (IC3) received nearly 352,000 complaints related to cybercrime activity that collectively was responsible for $2.7 billion in losses, according to the agency’s 2018 Internet Crime Report.

The three most commonly reported internet crimes last year were non-payment/non-delivery scams (i.e. the scammer never pays for or never ships ordered merchandise), extortion, and personal data breaches. Crimes that couldn’t be categorized due to incomplete complaints were next most common, followed by phishing scams (plus related crimes such as smishing), Business Email Compromise/Email Account Compromise (BEC/EAC) campaigns, and confidence fraud/romance scams.

Despite being only the sixth most commonly reported cybercrime in 2018, BEC/EAC campaigns was the top crime with the highest reported loss total – nearly $1.3 billion. In particular, the IC3 took note of an increase in the number of these scams that used spoofed emails, texts or phone calls to trick victims into thinking a superior or authority figure asked them to purchase gift cards.

To combat the growing BEC plague, IC3 last year launched its Recovery Asset Team, which “works within the Domestic Financial Fraud Kill Chain (DFFKC) to recover fraudulent funds wired by victims,” the annual report explains. “The DFFKC is a partnership between law enforcement and financial entities. In 2018, the IC3 RAT notified 56 field offices and 12 legal attachés of 1,061 DFFKCs totaling $257,096,992, a recovery rate of 75 percent.”

I was astonished at how high the recovery percentage was. This should tell anyone who has been a victim of this kind of fraud to report it to the IC3 immediately!

The nine next most financially costly crimes, in order, were confidence fraud/romance scams, investment schemes, non-payment/non-delivery scams, real estate/rental fraud, personal data breaches, corporate data breaches, identity theft, advanced fee schemes and credit card fraud.

The report also noted some standout or emerging trends from the past year. These included:

Payroll diversion scams, in which cybercriminals use phishing emails to capture employees’ login credentials in order to access their payroll accounts and redirect their direct deposit payments to an attacker-controlled account. The IC3 received about 100 such complaints, which were responsible for about $100 million of losses.

Extortion – the report noted a 242 percent increase in extortion-related complaints since 2017, with adjusted losses of over $83 million.

Tech support fraud. The FBI tracked a 161 percent year-over-year increase in losses resulting from such crimes. Altogether, victims from 48 countries lodged 14,408 complaints, with losses amounting to nearly $39 million.

The IC3 has received a total of roughly 4.42 million complaints since its inception in 2000.

Congrats to the IC3 and its Recovery Asset Team on making such headway recovering fraudulently wired funds!

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