Reports of scam activity to the consumer watchdog were up almost 50 per cent last year, with the biggest losses coming from investment scams.
The Australian Competition and Consumer Commission received more than 155,000 scam reports in 2016 – a 47 per cent increase over the previous year. Combined with reports to the Australian Cybercrime Online Reporting Network and other sources, more than 200,000 scams were reported.
The estimated cost of this disruption was $300 million, with an average loss of $7226. The ACCC says the real extent of losses is probably much higher.
The ACCC says scams are often sophisticated, targeted and involve long-term grooming. People aged 45 to 54 were the most affected by investment scams.
Online scams – those executed via the internet, email, social networks and mobile apps – increased by 130 per cent and outnumbered phone-based scams. Online scams accounted for 58 per cent of losses reported to the ACCC.
Cold calling investment scams resulted in the highest reported losses for phone based scams.
Social media is an increasingly popular platform for scamming. In one case, the victim received a private facebook message from a person he believed to be his cousin. The scammer used the cousin’s profile picture and sent a message saying the victim could make $1 million dollars in a few days investing in an online trading platform. The victim lost $500,000.
Looking at the relationship between age and fraud victimisation, the Australian Institute of Criminology has reported that young people are more likely to encounter scams via a wide variety of different technologies, such as the internet and mobile phones, while older people are more likely to encounter them through email or landline.
People aged 65 and over are more likely to send money to fraudsters.
The ACCC says there has been an increase in reports of “threat-based scams”, where the scammer adopts the identity of a figure of authority and uses intimidation tactics to scare the victim and force them to meet their demands.
The majority of threat-based scams are tax scams. The scammer tells the victim that they have underpaid their tax and owe money to the ATO, which must be paid immediately under threat of arrest or other serious repercussions.
Scammers often use personal information found online to try and convince people that they are legitimate. Many use VoIP phone numbers to disguise the fact they are calling from overseas.
The ACCC found that scammers are turning to iTunes and other gift card services for payment. Increasingly, scam victims are being asked to purchase a large number of iTunes gift cards and provide the 16-digit code to the scammer. Scammers sell the voucher numbers on the online black markets.
The ACCC recommends that investors check at its Scamwatch site for news, updates and tips. They should also visit the Australian Securities and Investments Commission’s MoneySmart site, which has a guide to checking the bona fides of investments companies, as well as a list of dodgy businesses and scam reports.