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WASHINGTON, D.C. -- Con artists used to rely on personal charm and wit to defraud their victims. Today, they use the cloak of the Internet to mask their identities and hide trails that might lead police to the door, say law enforcement officials.

And they're scamming people online to the tune of more than $117 million in about a year's time, as measured by a cooperative law enforcement venture. The Internet Fraud Complaint Center, created about a year ago as a central site for people to report online problems, identified 61 cases involving more than 56,000 people in its first year.

The result: criminal charges have been brought against approximately 90 individuals and companies associated with these cases, according to the FBI. The cybercrimes report came at a Congressional hearing this week on the fight against Internet fraud.

Cops Share Information, Investigations

"Old-style fraudulent and criminal activities have made their way to the Internet," says Rep. Cliff Stearns, R-Florida, who chairs the House Subcommittee on Commerce, Trade and Consumer Protection.

The Fraud Complaint Center Web site is one attempt to curtail the online scams.

"The IFCC serves as an Internet neighborhood watch," says Thomas Kubic, an FBI representative. Created by the FBI and the National White Collar Crime Center, it sifts through complaints and sends them to the appropriate federal, state, or local law enforcement agency. The effort is funded by the Department of Justice and comprises federal and state law enforcement agencies.

Since it went online, the center has collected 36,410 complaints, and 30,000 were referred for investigation, according to Kubic.

Progress, but Room for Improvement

Privacy issues come up in many of the fraud investigations. With personal information such as Social Security numbers becoming available on servers and in cyberspace, identity theft is a concern.

"It has become a frightening reality that one individual can literally take over another individual's financial identity without the victim's knowledge," says Bruce Townsend, representing the Secret Service.

A 1998 law specifically made identity theft a crime. Representatives of the Secret Service, the FBI, the Federal Trade Commission, and the Department of Justice told the subcommittee that the Identity Theft Act and existing fraud laws are strong enough to combat the problem of online fraud.

"At this time the laws are quite adequate to deal with this particular problem," Kubic says.

But Susan Grant of the National Consumers League says she would like to see more FTC regulations concerning e-commerce. She wants rules that online retailers should follow, clear definitions of fraudulent activity, and requirements that retailers disclose information such as where they are physically located and how they can be contacted, she says.

Outlawing unsolicited bulk e-mail would be another positive step, Grant says.

Old Scams Get New Life Online

Online auctions are the activity ripest with fraud, according to Grant. Last year, 78 percent of Internet fraud was related to online auctions, she says--which is down from two years ago, when its share was 87 percent.

A common problem with auction sites is that buyers do not receive the ordered item, or they get something different from what was advertised. Grant told the story of a woman who ordered a wheelchair but received a lawn chair with wheels.

Other common scams include offering loans for an up-front fee, work-at-home offers that require an application or processing fee, and pyramid schemes that promise more money for every person the victim coaxes to invest, according to the Internet Fraud Complaint Center.

"People have to understand that on the Internet, like in the rest of the world, if you see a deal that is too good to be true, it probably is," testified Scott Charney, a partner at PricewaterhouseCoopers.

Yet the most common fears are sometimes unfounded. People often fear the theft of their credit card numbers online. Grant says using a credit card is safer than other options, such as debit cards or transferring money.

"We urge consumers to use credit cards, because it is easier to detect fraud," she says.

Visa representative Mark MacCarthy concurs that credit cards are safe but says Visa's debit card users are likewise protected online. He testified that 95 percent of all Internet transactions use credit cards (53 percent of which are Visa cards). For every $100 charged online through Visa, 24 cents are involved in fraud. This compares to 7 cents per $100 for all Visa card transactions.

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