Tuesday, March 14, 2023

Internet crime surged in 2022: possibly causing as much as $160 billion in non-financial losses

Chart of annual Internet crime losses reported to IC3/FBI 2012-22, as compiled by S. Cobb
Financial losses reported to the FBI's Internet Crime Complaint Center in 2022 rose almost 50% over the prior year, reaching $10.3 billion according to the recently released annual report (available here). 

This increase, which comes on top of a 64% surge from 2020 to 2021, has serious implications for companies and consumers who use the Internet, as well as for law enforcement and government.

Those implications are discussed in an article that I wrote over on LinkedIn in the hope that more people will pay attention to the increasingly dire state of Internet crime prevention and deterrence, and how that impacts people. In that article I also discuss the growing awareness that Internet crime creates even more harm than is reflected in the financial losses suffered by victims. There is mounting evidence—some of which I cite in the article—that the health and wellbeing of individuals hit by online fraud suffers considerably, even in cases of attempted fraud where no financial loss occurs. 

One UK study estimated the value of this damage at the equivalent of more than $4,000 per victim. Consider what happens if we round down the number of cases reported in the IC3/FBI annual summary for 2020 to 800,000, then assume that number reflects a fifth of the actual number of cases in which financial loss occurred. That's 4 million cases. Now assume those cases were one tenth of the attempted online crimes and multiply that 40 million by the $4,000 average hit to health and wellbeing estimated by researchers. The result is $160 billion, and that's just for one year; a huge amount of harm to individuals and society.