The UK is trailing behind other countries in its efforts to track and investigate Internet fraud, according to a new report from the Attorney General's office.

The Attorney General, Lord Goldsmith, criticised the UK authorities for failing to come up with a centralised way for consumers to report Internet fraud, as has been done in countries such as the US and Canada.

The result is that Internet fraud - which accounts for 8-percent of all fraud in the UK - is growing unchecked, the report said.

"It is often confusing for victims to know who to report the fraud to, particularly if it crosses geographical or sectoral boundaries," Goldsmith said in the report.

"Fraudsters benefit from this lack of continuity of response. Internet fraud is a particularly a good example of how fraud can become difficult to report."

He used the example of a fraudster, Mr Bogus, who defrauds a user by advertising products on an Internet auction site, illustrating how such crimes are often not taken seriously.

"Mr. Bogus remains free to re-advertise the computer and performs the same fraud on n increasing number of victims. The police and trading standards do not identify Mr. Bogus as a repeat offender because the reports of fraud are either not accepted, or appear in different force areas," Goldsmith wrote in the report.

He said such crimes have an effect far larger than they appear because of "externalities" such as the chilling effect on e-commerce in general. As an example, the 2002/03 British Crime Survey found that 75 percent of respondents were worried about the security of using a credit card online, Goldsmith said.

He urged the creation of an Internet fraud reporting scheme on a national or EU level, along the lines of the US' Internet Crime Complaints Centre (IC3) or Canada's Reporting Economic Crime Online (RECOL) centre.

"While no such centre exists in the UK to tackle fraud, a national reporting centre has recently been launched to tackle paedophilia and protect children," Goldsmith wrote.

"This model shows that it is possible to establish such operations in the UK and it is feasible to do so."