Scams 2019 - ACCC

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 2019, scams accounted for over $634 million in combined financial losses attributed to over 336,000 scam reports received by Scamwatch, other government agencies and the major banks.

We look at the key results outlined in the ACCC’s Targeting scams 2019 report.

 

Who is Scamwatch?

Scamwatch is run by the Australian Competition and Consumer Commission (ACCC), focusing on working with government and the private sector to disrupt scams.

While Scamwatch offers the primary government website used by Australians to report scams, only around 13% of victims make a report.

To provide a clearer picture of overall scam activity, the 2019 report incorporates additional data provided by other government agencies such as ReportCyber and for the first time, losses reported to the big four banks.

 

Top scams by loss

 

Reports to Scamwatch

Reports to Scamwatch accounted for $143 million of the total combined financial losses, representing more than a doubling of losses compared to 2009 ($70 million) and a 34% increase compared to 2018 ($107 million).

The following are the top scams reported to Scamwatch in 2019, and associated losses:

  1. Investment scams – $61.8 million
  2. Dating and romance scams – $28.6 million
  3. False billing – $10.1 million
  4. Hacking – $5.1 million
  5. Online shopping scams – $4.8 million
  6. Remote access scams – $4.8 million
  7. Identity theft – $4.3 million
  8. Threats to life, arrest or other – $4.3 million
  9. Classified scams – $2.8 million
  10. Inheritance scams – $2.6 million

While phishing didn’t feature in the top 10 list of scams by financial losses, it was in fact the most frequently reported scam type with over 25,000 reports and over $1.5 million associated losses.

Top contact methods for scammers in general included phone (41.4%), email (24%), text message (16.6%) and internet (7%).

The report also found that males were more affected by investment scams, reporting losses of $44.7 million, while females reported losing more to dating and romance scams with $21.5 million in losses.

 

Aggregated reports

While the report doesn’t provide the same level of detail for the data received by other government agencies and the big four banks, the top three scams in terms of combined financial losses overall were reported as follows:

  1. Business email compromise – $132 million
  2. Investment scams – $126 million
  3. Dating and romance scams – $83 million

While business email compromise did not feature in the list of top 10 scams reported to Scamwatch, it did account for the highest losses overall. This discrepancy may be explained by the fact that scam victims are more likely to report financial losses to their bank than anywhere else, as stated in the report.

 

Key scam trends reported throughout 2019 include:

  • Business email compromise scams – involve the targeted phishing of a business, commonly performed through impersonating senior managers and emailing the business’s clients requesting payment to a fraudulent account.
  • Celebrity endorsement scams – scammers used the image, name and likeness of a celebrity to sell a product or service.
  • Cryptocurrency investment scams – e.g. cloud mining farms. Most scams were Ponzi schemes, with no real cryptocurrency involved.
  • Crowdfunding scams – common scams include impersonating charities or victims of tragic events to raise funds. For example, scammers took advantage of the Australian bushfire crisis.
  • Dating and romance scams – scammers are evolving and moving to new platforms not designed for dating, such as social media and online forums.

 

Conclusion

As technology continues to advance, scammers are evolving their practices to make use of new technologies and exploit societal trends such as the rising use of social media and cryptocurrencies. 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.

A coordinated approach between governments, financial institutions, businesses, digital platforms, and telecommunications and internet providers is required to have a significant impact in disrupting scams.

Nyman Gibson Miralis provides expert advice and representation in complex cases involving scams and cybercrimes.

Contact us if you require assistance.