A report by the Center for American Progress and the Center for Democracy and Technology has found there is too little action being taken against online criminals, despite rising consumer concern about online safety.
The report found that state officials were spending only 40 per cent of case time investigating online fraudsters, preferring instead to concentrate on higher profile solicitation and pornography cases.
Only 8.9 per cent of investigations involved data security, confidential records, or identity theft, and 15.5 per cent involved online sales and services, such as failure to deliver on a purchase. Over the past three years state attorneys general brought only 11 cases against spyware purveyors, despite spyware costing an estimated $1.7bn in losses.
"Online consumers are now at risk," said Ari Schwartz, vice president and chief operating officer at the Center for Democracy and Technology.
"Internet crime costs basically nothing to execute, can be highly lucrative, and involves little risk of being caught and punished. We need all 50 state attorneys general focused on this problem. Through committed action and vigorous enforcement, they can provide a powerful and much needed deterrent."
Overall, the Federal Trade Commission reported 221,226 internet-related fraud complaints, up almost 16,000 from 2006 and more than 24,000 in 2005. In 2007, 24 out of 30 states reported an internet-related category within their top 10 complaints, with eight ranking internet-related complaints among their top three most common consumer problems.
"These numbers are startling, but they may even understate the problem," said Reece Rushing, director of regulatory and information policy at the Center for American Progress.
"Consumers are often unaware, and thus may not report, when they are victimised by online threats such as spyware or phishing. We must take action against these threats to protect consumers and preserve confidence in internet commerce."
by Iain Thomson in San Francisco