According to a new Center for American Progress report, not enough is being done to protect the public from fraud on the Internet. The report cautions that the convenience, choices and lower prices enjoyed by Internet users are at risk because of inadequate protection against identity theft.

The center says that high levels of fraud and abuse may cause more and more consumers to lose trust, which is a major threat to e-commerce. Malicious software, phishing and spam were the primary causes of the high levels of fraud and abuse on the Internet.
The report states that although the Federal Trade Commission (FTC) is improving its enforcement activity, it lacks the resources to make a big difference.

The Center for American Progress and the Center for Democracy and Technology asked States to provide data on the complaints they received 2006 and 2007. Thirty six States responded and most of them had a Internet related category listed in their top-ten complaints. It was also noted that overall Internet related complaints increased from 2006 to 2007. Eight of the States listed Internet related complaints in their top-three and four States listed them as being the number-one complaint.

The conclusion given by the researchers is that not very many crimes involving phishing, spyware, spam, adware and hacking were being effectively investigated or prosecuted. “Internet crime requires almost no expense to execute, carries potentially high financial rewards, and involves relatively little risk of being caught and punished,” according to the report.

Reported incidents of mortgage fraud in the U.S. increased by 42 percent in the first quarter of 2008 from a year ago, according to a new report released today by the Mortgage Asset Research Institute (MARI).

For all states, the top fraud incident type was in “General Application Misrepresentation” followed closely by misrepresentations related to “Income” and “Employment.” In addition, MARI continues to see multiple fraud types, such as identity theft and identity fraud, in loan transactions.

The number of U.S. breaches of personal information that could be used to commit identity theft so far this year has already passed the total for 2007.

According to the Identity Theft Resource Center, this year’s running total passed the 2007 mark of 446 on Friday, with more than four months to go.

Between January 1st and June 27th, the total number of data breaches recorded by the ITRC is 342, more than 69% greater than the same time period in 2007. The actual number of breaches is more than likely higher, due to underreporting, and the fact that some of the breaches reported, which affect multiple businesses, are listed as a single event.

According to the Seattle Post Intelligencer, Nina Olson, the official appointed to speak on behalf of U.S. taxpayers, believes that the Internal Revenue Service (IRS) is not doing enough to protect citizens from identity theft. She says that the agency must better protect victims of tax-related identity theft and should get more information out to homeowners about a new law eliminating taxes on debt canceled as a result of foreclosure.

Olson issued a summer report to Congress outlining what the IRS needs to focus on in the 2009 fiscal year. Here are three major areas described in the report:

• Tax-related identity theft. Olson said identity theft targeted at taxpayers is a serious problem. She says that the IRS doesn’t have adequate procedures in place to assist victims of identity theft.
• Cancellation of debt income. When an individual or business borrows money and the debt is canceled, the borrower generally must include the amount of the canceled debt in gross income. This often-unexpected tax hit can affect borrowers who lose their homes to foreclosure or who default on car loans or credit card debts.
Last year, Congress passed a law giving temporary tax relief to homeowners who had mortgage debt canceled. The Mortgage Forgiveness Debt Relief Act allows a taxpayer to exclude from income qualified home loan debt forgiven in 2007, 2008 or 2009. But many people entitled to this tax break aren’t filing the form. Olson says the IRS needs to get the word out to more people.
• IRS collection practices. Olson remains concerned about collection issues, including the seizure of assets before other collection alternatives have been exhausted.

Data Loss Source: The personal information on thousands of criminals in England and Wales has been lost on a USB drive.
Date of Loss: August 22, 2008
Size of Loss : 10,000
Affected Individuals: Criminals
Geographic Focus: England and Wales
Data contained: The data includes information on about 10,000 offenders, as well as the names, birth dates and some release information of all 84,000 prisoners in England and Wales — and a further 33,000 records from the police national computer.
Additional Notes: Although the data had been encrypted in a database, it was not encrypted when moved to the mobile storage device.
Additional Information: SC Magazine