Internet fraud is increasing so quickly that some overwhelmed police forces are refusing to investigate incidents where less than £1,000 has been lost.

The existence of a threshold for such crimes has been exposed by online auction house Ebay, after reports from victims who complained that police failed to act.

The failure to investigate and prosecute offenders was causing the public real harm, Ebay said.

Speaking to the House of Lords Science and Technology Committee on Personal Internet Security , Gareth Griffith, Ebay's head of trust and safety in the UK, said: "When we try to get police involved, sometimes they will say 'We'd love to help you but if it is not over X threshold of thousands of pounds, we cannot'.

"Users come back to us saying the police are not interested because it's only a £500 laptop."

The threshold seems to vary between individual forces, according to Andrew Goodwill, managing director of card fraud prevention company Early Warning.

But with detectives busy investigating other cases of online crime, such as child abuse, hacking and major virus attacks, fraud cases where an individual has only lost a few hundred pounds are pushed to the back of the queue.

A Scotland Yard report released in January backs up these findings. This report said that the scale and the international nature of these crimes meant police could not investigate all alleged offences as a matter of course.

Michael Barrett, chief information security officer at electronic payments firm Paypal, said this practice is resulting in unnecessary crimes being committed.

He said: "You could argue that this is causing the public real harm. You will often find there is a threshold before you can get a prosecutor interested in a case.

"What we do is slowly build a dossier on an individual [perpetrator] until they reach the threshold."

Computeractive's sister publication, Computing, talked to Detective Sergeant Damian Morgan of West Midlands Police’s high-tech crime unit who said thresholds do not officially exist, but such decisions may take place.

"There are no threshold policies written down on paper. But there may be local decisions being made on these crimes and how far they get investigated, rather than a central policy being written. This may also be the case in other local forces," said Det Sgt Morgan.

Rick Naylor, vice-president of the Police Superintendents' Association, said he is unaware of such thresholds in normal policing.

However, Computeractive has received complaints from readers who tell us that when they have reported Ebay fraud to local police, the authorities have not been interested in investigating. Often this is because they have only lost - in police parlance - a relatively small sum of money.

These latest findings on the problems of reporting online fraud, combined with a change in reporting procedures for the public from 1 April 2007, will do nothing to help consumer confidence said Goodwill.

"This is the start of a slippery slope. Police forces are under-resourced and with the public only meant to report online fraud to their bank and not the police soon means things are getting really silly now. Where will it end?," he said.

"When we have been burgled, will we have to report the burglary to our insurance company to investigate? The fraudsters are getting away with it and people are going to be incensed that they are getting no help from the police."