The latest news from the Australian Competition and Consumer Commission Targeting Scams report indicates Australians will have lost more than A$3 billion to fraud by 2022. This is about a $1 billion increase over reported losses from 2021.
Year after year, we witness an increase in financial losses due to fraud. Behind these numbers are millions of Australians experiencing a range of financial and non-financial problems harms.
Here’s what we learned from the latest report – and some advice on what to look out for in the year ahead.
2022 at a glance
Of the reported $3 billion lost, about half was stolen as part of investment programs — more than double the 2021 figure of $701 million. The desire to invest in cryptocurrency has exacerbated these losses, with potential investors inadvertently transferring money to offenders who advertise a series of untruths.
Remote access schemes — where a scammer convinces the victim to allow them access to their computer — came in second, with $229 million in reported losses. This was followed by payment redirection scams (also known as business email compromise fraud).
Those who reported directly to Scamwatch lost an average of $19,654 – a 54% increase from the $12,742 reported in 2021.
The report also shows that not all victims are targeted equally; people age 65 and older reported the greatest losses across all demographics. Indigenous Australians, people with disabilities and people from culturally and linguistically diverse backgrounds were also over-represented.
For the first time in many years, texting was the most popular method for offenders to target victims. And while wire transfers have been the most popular way to send money to offenders, cryptocurrency transfers continue to grow in popularity – up 162.4% in one year.
Michael Lucy
However, there was a decrease in fraudulent telephone calls. This is probably due to the introduction of regulatory action to block known scam calls. It is a bright spot in an otherwise dark report.
Read more: Scammers can insert fake texts into legitimate SMS threads. Will government action stop them?
Trends to look out for
The Targeting Scams report shows the many ways perpetrators try to scam their victims. On the one hand, people are becoming more aware of common scam tactics. On the other hand, criminals adapt their methods to gain the upper hand.
Here are five types of relatively lesser-known fraud that everyone should be aware of.
1. Romance
Also known as “cryptorom” or “slaughter of pigs”, this scam is an amalgamation of investment fraud and traditional romance fraud approaches.
The perpetrator first enters into a relationship with the victim – via dating apps, websites or social media platforms. Once they have established trust, they encourage the victim to put their money into an ‘investment opportunity’, often in cryptocurrency. The victim will then unconsciously transfer his money to the perpetrator, who is in another guise.
This kind of romantic solicitation raises fewer red flags than asking for money directly, and is aimed at a younger audience compared to more traditional romance frauds.
Such deceptions are coded under investment schemes. This is likely driving the rise in investment scheme losses reported in recent years, while also accounting for a lack of substantial rises in romance fraud.
2. Online shopping fraud
Perpetrators are skilled at making fake websites and product advertisements that look real.
Often these fake sites have only subtle differences from their real counterparts. Consumers may not be able to tell the difference. Criminals can access funds directly through victims’ credit card information obtained from these sites.
Online shopping fraud targets a range of demographics. It happens on standalone websites, social media platforms and online marketplaces.
3. Jobs and Labor Fraud
Research has indicated that working from home and flexible working conditions are strong indicators of a fraudulent job posting.
But in a post-COVID world, flexibility at work is often an important criteria for job seekers, if not a deal-breaker. Violators have noticed this and are responding by posting attractive job opportunities that offer flexibility and high incomes.
Victims submit their resumes and personal references (they are committed to identity crimes), or may have to pay up front for training or material costs for a job that doesn’t exist.
Employment scams mainly target younger people as they are more likely to do so experienced job loss and insecurity in the aftermath of the pandemic.
4. Restoration Arrangements
Many victims of fraud will want to take all possible measures to recover lost money.
To take advantage of this, perpetrators will trade victims’ data with each other. They then pose as authorities (often law enforcement, banks or private agencies) who know about the victim’s circumstances and promote their ability to recover the missing money for a fee.
In this way, victims desperate to recover losses are manipulated into paying even more money to offenders.
5. Remote Access Arrangements
Receiving a call from a computer technician reporting a problem with your computer and offering to fix it is a common experience for many. Although this approach is not new, it experienced a strong revival in 2022, particularly aimed at the elderly.
These scam calls often come through landlines and play on people’s fears for the safety of their bank details and other personal information. The fraudsters often evoke a sense of urgency to solve the “problem”, and victims are persuaded to allow the perpetrator to access their computer remotely.
The criminal then has access to a wealth of personal information. They can directly access bank accounts to transfer money, and access identity references and other sensitive details to commit identity crimes in the future.
Change is needed to protect the public
With the technological evolution, the threat of fraud will only increase. Experts are concerned about artificial intelligence tools such as ChatGPT and image and video generators give cybercriminals yet another tool to add to their arsenal.
Read more: Scams, deepfake porn and romance bots: Advanced AI is exciting, but incredibly dangerous in the hands of criminals
The latest Scamwatch report is further evidence that banks and financial institutions need to take steps to reduce fraud losses; including checking account names against BSB numbers for all transactions. The UK has one confirmation-of-beneficiary policies that do this.
The government is trying to address the continued increase in fraud losses by reviewing it cybersecurity strategy and the possible establishment of one National Fraud Center.
These are both positive steps, but it is clear that there is more work to be done.
If you or someone you know has been a victim of fraud, you can report it to Report Cyber. For support, please contact iDcare. Consult for prevention advice Scam watch.
