As predicted, Internet crime surged in 2020, losses up 20% based on FBI and IC3 reports: analysis and opinion

Losses to individual and business victims of internet crime in 2020 exceeded $4 billion according to the recently published 2020 Internet Crimes Report from the FBI and IC3; this represents a 20% increase over losses reported in 2019. The number of complaints also rose dramatically, up nearly 70%.

IC3/FBI internet crime data graphed by S. Cobb

Throughout 2020, criminologists and cybersecurity experts had expressed growing fears that 2020 would be a big year for internet crime, particularly as it became clear that many criminals were prepared to ruthlessly exploit the COVID-19 pandemic for their own selfish ends.

When the 2019 Internet Crimes Report was published in February of 2020 it documented "$3.5 billion in losses to individual and business victims."

What I said back then, about the loss number that I expected to see in the 2020 report, was this: "I certainly wouldn't bet against it blowing through $4 billion"

(Here's a link to the article where I said that). 

Quite frankly, I'm not the least bit happy that I was right. Just as I take no pleasure in having been right for each of the last 20 years, when my annual response to "what does the year ahead look like for cybersecurity?" has been to say, with depressingly consistent accuracy: it's going to get worse before it gets better. As I see it, a 20% annual increase in losses to internet crime, despite record levels of spending on cybersecurity, is a clear indicator that current strategies for securing our digital world against criminal activity are not working.

A shred of hope?

However, like many cybersecurity professionals, I have always had an optimistic streak, a vein of hope compressed deep beneath the bedrock of my experience. (Periodically, we have to mine this hope to counter the urge to throw up our hands and declare: "We're screwed! Let's just go make music.")

So let me offer a small shred of hope. 

I am honor bound to point out that cybercrime's impact last year may not have been as bad I had come to expect. Yes, at the start of 2020 I predicted that cybercrime would maintain its steep upward trajectory. I said the IC3/FBI loss number for 2020 would pass $4 billion and it did. But then "the Covid effect" kicked in, generating scores of headlines about criminal exploitation of the pandemic in both cyberspace and meatspace. And behind each of those headlines were thousands of victims experiencing a range of distressing psychological impacts and economic loss.

By the end of 2020 I was predicting that the IC3/FBI number could be as high as $4.7 billion (see my December, 2020, article: Cybersecurity had a rough 2020). In that context, the reported 2020 number of $4.2 billion was "better than expected." Indeed, the year-on-year increase from 2019 to 2020 of 20% was not as bad as the 2018-2019 increase of 29%. 

However, when I look at the graph at the top of this article I'm not yet ready to say things are improving. And I'm very aware that every one of the 791,790 complaints of suspected internet crime that the IC3 catalogued in 2020—an increase of more than 300,000 from 2019—signifies a distressing incident that negatively impacted the victim, and often their family and friends as well.

In 2020, the pandemic proved to be a very criminogenic phenomenon. I'm pretty sure it also generated greater public awareness of statistical terms like growth curves, rolling averages, trend lines, dips, and plateaus. Right now I see no reason to think cybercrime will dip or even plateau in 2021. But let's hope I'm wrong and in the months and years to come there is a turnaround in the struggle to reduce to the abuse of digital technologies, hopefully before my vein of optimism is all mined out.

Disclaimer: I acknowledge that there are issues with using the IC3 numbers as crime metrics. For a start, they are not collected as an exercise in crime metrics, but rather as part of one avenue of attack against the crimes they represent, an issue I addressed in this law journal article. However, I have studied each IC3 annual report and am satisfied that collectively they reflect real world trends in cybercrime's impact on victims, as measured by direct monetary lost (the psychological impact of internet crime creates other costs, to victims and society, but so far we have done a woefully poor job of measuring those).

As soon as I get a chance I will dig deeper into the 2020 IC3/FBI report and report back; I'm particularly interested in trends impacting the "60 and over" demographic which @Chey_Cobb and I highlighted in the IEEE piece we wrote about age tech after last year's report. 

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