Technological advancements over the past decade have led to a rapid escalation of scam activity affecting Australians, with scams evolving to use social media, cryptocurrency and emerging online services.
In 2021, scams accounted for over $2 billion in combined financial losses attributed to scam reports received by Scamwatch, other government agencies and the major banks.
This represents a significant increase compared to 2020, where $851 million in combined financial losses were reported.
We look at the key results outlined in the ACCC’s Targeting Scams 2021 report.
Who is Scamwatch?
Scamwatch is run by the Australian Competition and Consumer Commission (ACCC) and focuses on working with government and the private sector to disrupt scams.
While Scamwatch offers the primary government website used by Australians to report scams, a relatively small percentage of victims use this avenue to make a report.
To provide a clearer picture of overall scam activity, the 2021 report incorporates additional data provided by other government agencies such as ReportCyber, and losses reported to major banks.
Top scams by loss
Reports to Scamwatch
Reports to Scamwatch accounted for $324 million of the total combined financial losses, representing an 84 percent increase compared to 2020, where the reported losses were $176 million.
The following are the top scams reported to Scamwatch in 2021, and associated losses:
- Investment scams – $177 million
- Dating and romance scams – $56 million
- False billing – $17 million
- Remote access scams – $16 million
- Threats to life, arrest or other – $11 million
- Identity theft – $10 million
- Online shopping scams – $8 million
- Classified scams – $7 million
- Phishing scams – $4 million
- Hacking – $3 million
Top contact methods for scammers in general included phone (50%), text message (23%), email (14%), internet (4%) and social media (4%).
The report also found that males were the gender most affected by scams, accounting for 59% of losses.
Aggregated reports
While the report doesn’t provide the same level of detail for the data received by other government agencies and the banks, the top three scams in terms of combined financial losses overall were reported as follows:
- Investment scams – $701 million
- Payment redirection scams – $227 million
- Romance scams – $142 million
2021 scam trends
Investment scams
Investment scams made up 55% of the total losses reported to Scamwatch in 2021. The main driver of the increase in investment scams were cryptocurrency investment scams which increased in losses by 270% in 2021. These scams generally involve scammers setting up fake investment and cryptocurrency trading platforms, sometimes impersonating legitimate, well-known websites, to steal money from people looking to invest in cryptocurrency.
Scamwatch also observed an increase in:
- Impostor bond scams – scammers impersonated legitimate companies and sold fake high yield corporate or government bonds.
- Ponzi schemes and related scams – Ponzi schemes use funds collected from new investors to pay existing investors. No real investment exists, and these schemes inevitably collapse.
Flubot SMS scam – largest SMS scam in Australia
Flubot is a form of malware that operates on Android phones through a malicious link. It is hidden through an SMS message that the user opens leading to a chain of similar messages to people on the person’s contact list to potentially put others at risk. The malware can harvest the contact list to spread to other devices. It can not only infect the device but access personal information and banking data.
Remote Access scams
Remote access scams continued to increase in 2021. In nearly all instances of remote access, contact was first initiated by phone. The scammer often claims to be from a reputable company and presents the victim with a fictitious scenario such as there having been a fraudulent transaction on their account. They then trick the person into allowing remote access to their computer or device where personal information can be stolen or manipulated. Older Australians tend to be more impacted by remote access scams.
Continuing impacts of COVID-19
In 2021, scammers continued to use the COVD-19 pandemic to perpetrate scams. This included:
- Government impersonation scams – these scams rely on fear, intimidation, and a desire to comply with authority to convince people into parting with their money. For example, messages were sent purporting to be from MyGov, inviting the recipient to click a link to claim a “one-off COVID-19 relief payment”. The link took the recipient to a page to “verify” their personal information in order to confirm they were eligible for the payment. This information could then be used to perpetrate crimes such as identity theft and stealing the victim’s money.
- Vaccine scams – for example, victims received a text message with a link inviting them to set up their Covid passport. The link took victims to a site that mimicked the Medicare website and would ask for personal and banking details.
- Pet scams – pet scams increased in 2020 as a result of lockdowns, but despite lockdowns easing, Scamwatch continued to see pet scam reports increase by 48% in 2021. After a pet has been paid for, victims will be asked for more money because of a range of problems including transport issues, illness and need for vaccines.
Agriculture scams
In 2021, Australian farmers and agriculture businesses lost over $1.5 million to scammers targeting the agriculture industry. Scams included:
- Tractor scams – these scams targeted people looking to purchase both new and second-hand machinery.
- Livestock scams – these scams involved people looking to purchase livestock such as cattle, sheep, donkeys, horses, etc.
Key takeaways
Scammers are continuing to evolve, exploiting societal trends and technologies such as cryptocurrency to scam victims. This increasingly sophisticated approach by scammers has led to a sharp increase in the total financial losses to scams year on year, which shows no signs of slowing down.
