How you can fight Internet fraud

A few months ago, I tried to access my health savings account online to pay for my daughter's braces. I always liked its tax advantages, and had picked an online account before local banks had even heard of it.

But that online service, through Canopy Financial, always left me a little worried. Canopy seemed to change banks regularly, and my password was often changed without my knowledge, causing me to have to contact them directly via phone to gain access to my account. There were never any documents mailed to me, so all I had was what I printed from the website.

Still, the money transfers to and from my checking account were always timely and accurate. I kept meaning to change the account to a local bank once they started offering them, but like most Americans, I would get busy and forget.

Until my account was frozen. That's when I learned the Securities and Exchange Commission was investigating Canopy. A few weeks later the federal government filed fraud charges and the company filed for bankruptcy. Now I'm just another creditor, one of thousands, which likely means I'll recover pennies on the dollar.

Welcome to 21st-century financial fraud.

The U.S. is full of it -- by Internet, by mail, by phone. There's fraud in student loans, mortgages, investments and securities. There's misuse of Social Security numbers, Ponzi schemes and credit card theft.

With so much fraud out there, it's been difficult for the average American caught up in it to know where to turn to report it.

To help, the federal Financial Fraud Enforcement Task Force -- a coalition of local, state and federal law enforcement, investigative and regulatory agencies -- last week launched The website links 20 different federal agencies from the IRS to the U.S. Postal Inspection System and offers a way to file complaints.

"There are so many agencies with so many valuable resources all throughout the government, but the average person may not know how to find them," said Hannah August, spokeswoman for the Justice Department. " compiles these resources to make a one-stop shop for the public."

If you want to report bankruptcy fraud, the website offers a link to the Justice Department. Identity theft? Contact the Federal Trade Commission's Complaint Assistant website or toll-free number. Mortgage fraud? Contact the FTC, the FBI and the Housing and Urban Development's Office of the Inspector General.

Reporting financial fraud to local police and the federal government is important, said Craig Butterworth, spokesman for the National White Collar Crime Center. The center, together with the FBI, runs the Internet Crime Complaint Center, a place to complain about Internet fraud. It's at

"For each and every complaint received, the information is used by law enforcement to identify an emerging crime trend," Butterworth said. "The idea is to create a record that acts like a digital trail left behind by the cybercriminals."

IC3 handles schemes including online auctions, debt elimination, credit cards, lotteries, Nigerian solicitations, phishing (e-mails that impersonate legitimate concerns to get personal information) and spoofing (disguising e-mail addresses to impersonate a legitimate concern).

Cybercrime fraud is up significantly since IC3 began reporting on it 2005.

That year, there were around 231,000 complaints received by victims who lost $183.12 million. Last year, IC3 received 336,655 complaints representing $559.7 million in online fraud, almost double the dollars from the year before.

Texans wrote 20,841 of those complaints last year, reporting losses exceeding $33.5 million. The state ranked No. 3 in both complaints and losses.

IC3 often relays complaints to local police, but Butterworth suggested that victims notify police as well. One IC3 program educates police departments on how to handle cyberfraud.

Unfortunately, IC3's cases likely just scratch the surface. No other agency calculates the total amount of financial fraud going on, said August, the Justice spokeswoman.

Bottom line: Trust your gut. If something seems a little fishy, there's likely fraud going on somewhere behind it.