NOBODY LIKES a call from the taxman. Donald Rumsfeld, who as America’s defence secretary oversaw a budget bigger than the economy of a typical country, nonetheless finds the rules so confusing that he writes to the Internal Revenue Service each year complaining that he has “no idea” whether he has filed his taxes correctly. So it is hardly surprising that, when the phone rings and an official-sounding voice says you have underpaid your taxes and will be connected to an adviser to pay the balance, ordinary folk tremble.
It is, however, invariably a scam. Few tax authorities call individuals about their taxes. If you are lucky, they will send you a letter a year later, to the wrong address. They will certainly not menace you, as bogus calls often do, with the threat of arrest if you do not stump up the cash right now.
Such scams have become vastly more common. Phone calls from tricksters claiming to be taxmen almost doubled in number last year, according to UK Finance, a trade association of banks. Other countries show increases at least as dramatic.
Even as rates of most crimes remain low in rich countries, the spectacular growth of cyber-crime—crime committed mostly or entirely by digital means—stands out. According to the Crime Survey of England and Wales, the best indicator of long-term trends in Britain, in 2019 there were 3.8m incidents of fraud, mostly online, representing a third of all crimes committed. That figure has increased every year since 2017 when the government started collecting data. Around 7% of all adults were victims. Three-quarters lost money, and 15% lost more than £1,000 ($1,390). In America the number of reported cases of internet fraud increased by 69% last year. Reported losses there (excluding bank or credit-card fraud) reached $4.2bn, three times higher than in 2017.
Other kinds of internet-enabled crime are growing too. Computer-enabled spam phone calls and text messages, typically trying to defraud people, extract billions of dollars a year. Illegal gambling websites, many of which steal from their customers, have multiplied. And new technology makes many old-fashioned crimes easier to perpetrate. Drug-dealers use Bitcoin, a cryptocurrency, to take payments and move money around. They rely on specialised criminal encrypted-communications software to organise their affairs. “There is no serious organised crime that does not have a digital component,” says Nigel Leary of Britain’s National Crime Agency (NCA).
Most significant over the past year is the growth in “ransomware”—hacking attacks where victims’ files are locked up until money is paid. Such attacks were once crude. Ransomware arrived in spam emails and targeted ordinary people’s computers. The sums demanded were often small, to encourage people to pay up.
These days hackers focus on large organisations and demand…