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Michigan, Ohio 7th in nation for victims of online fraud

Source: The MiamiHerald
Associated Press
Date: December 08, 2003

online fraud DETROIT - Michigan is tied in seventh place with Ohio for the number of residents filing complaints about fraud cases involving Internet auction sites, according to a federal agency. The Internet Fraud Complaint Center, created three years ago by the FBI, says about 2,500 people in each state filed such complaints last year.

Fraud cases involving the auction sites nearly tripled in the United States from 2001 to 2002. Consumers reported about $54 million in losses last year, up from $17 million a year earlier. Auction site managers say they work to prevent fraud, but they're not held legally responsible when Internet users are scammed.

"With a site that has 63 million users a day, we're going to see every possible scam you can imagine," Kevin Pursglove, a spokesman for the most popular auction site, eBay, told The Detroit News for a Sunday story. Jeff Neumann of Taylor says he was conned out of $7,500 by someone who said they wanted to buy his 1989 Camaro IROC Z-28 online, then sent a bogus cashier's check.

Troy resident Mike Bies shipped five National Geographic magazines worth $150 to an eBay buyer whose personal check turned out to be phony. Bies filed a complaint with eBay, which shut down the offender's account. "But it takes about 10 minutes to set up a new account," Bies said.

Deciding whether local or federal authorities should handle online fraud cases has stalled some efforts to catch perpetrators, especially when the scam is run from another country. "Even if we're able to identify the perpetrator, which would be difficult to do, getting the person over here to stand trial is difficult," said Bill Cousins, a supervisor of fraud squads at the Detroit branch of the U.S. Secret Service. "For a $5,000 fraud case, the U.S. government isn't going to put forth the assets needed."

Neumann, 35, had been contacted via e-mail by someone from Nigeria who offered to buy his Camaro for $2,100. The buyer offered to send a cashier's check for $7,500. He told Neumann to keep $2,100 and wire back the change. Neumann already had sold the car locally by the time he received the $7,500 check. He deposited it into his checking account and waited a week before having his bank wire the $7,500 back to Nigeria.

Two hours after he wired the money back, Neumann found out the cashier's check was bogus. "And I was responsible for the $7,500," Neumann said. "I didn't know about this scam. I was under the impression a cashier's check was as good as cash."

Jessica Roth of Howell experienced the same scam when she sold two flutes online. She received a cashier's check for $5,000 from Nigeria and wired back $4,175 before learning the check was no good. "I'm college educated and so is my husband, and I'm suspicious by nature," Roth said. "I feel so stupid I fell for this."

Roth, her husband and their 2-year-old son moved to Howell two months before the scam. "We've got a new house, a new baby and we're living less than paycheck to paycheck," Roth said. "But we'll get by. I wonder how many other people out there won't."

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