New research suggests, governments should focus more funds on internet policing rather than anti-virus software, says a new cybercrime report conducted by computer scientists at the University of Cambridge at the instance of the UK's Ministry of Defence.
According to the report, the UK spent around £640 million annually on the problem. It added, less than £10 million was being spent on cybercrime law enforcement.
The team coordinated with colleagues in Germany, the Netherlands, the US and UK to compile the study focusing on all the main types of cybercrime, including online payment and banking fraud.
According to lead author professor Ross Anderson who spoke to the BBC, less government money should be spent on monitoring phone and internet communications.
He added, police in the UK were often months behind and focused far too much on surveillance, because resources had been misallocated. He added that some police forces believed the problem was too large to tackle.
He said it was a fact that a small number of gangs were responsible for many of the incidents and locking them up would be far more effective than telling the public to fit an anti-phishing toolbar or purchase anti-virus software. He added, cybercrooks imposed disproportionate costs on society.
He said it was mainly the US government, and the FBI in particular, that carried out the "heavy lifting" when it came to pursuing cybercrime.
Welcoming the report a UK cabinet office spokesman said that the government believed the threat was serious and needed to be tackled and said the government's approach needed to strike the right balance between defending "our interests and pursuing cyber-criminals".
The study reports internet scams cost UK citizens an average of a few tens of pence a year, while they may be spending as much as 100 times as much on anti-virus software. It adds, online banking fraud costs tens of pounds per person, but the fear of online transactions hurts the economy far more.
Dr Richard Clayton, the co-author of the study said in credit card fraud, for instance, loss was clearly the monetary loss suffered by the victim.
He added, however, on losing trust in online banking, the consumer would make fewer electronic transactions, increasing the indirect costs for the bank because it now needed to maintain cheque clearing facilities, and this cost was passed on to society. (Also see: Cybercriminals infect networks to steal data undetected: report)