Financial scams are rising dramatically and the police and banks probably won’t help you if you get stung, according to experts in the field.
The ACCC recently reported that during 2021 Australians lost $1.8 billion in financial scams, and a scam investigator said as many as 33 per cent of his clients don’t report their losses to police.
“Since COVID scams of all different types have exploded in Australia,” said Ken Gamble, executive chair of financial investigations group IFW Global.
“It’s the most rapid growth in scamming numbers I’ve seen in my 34 years on the job and it’s because people are working from home,” Mr Gamble said.
IFW, an Australian group that is currently chasing $200 million in financial ripoffs for victims, said many victims won’t go to the police.
“One out of every three clients won’t report their losses to the police because of a fear of humiliation and the general understanding that the cops are not going to do anything,” Mr Gamble said.
“Police don’t see financial crime as a priority. They don’t see why they should be the ones dealing with it and they think victims who get caught in overseas scams deserve to lose money,” Mr Gamble told The New Daily.
IFW this week raided a call centre in the Philippines capital Manila with local police targeting scams that took at least $3.3 million in Australian retirement savings. The raid was covered on ABC TV’s 7.30.
Australian police are dismissive of such scams in part because they don’t understand the scale of the criminality involved.
“These are organised syndicates that are making $US250 million a year [$384.56 million] with 500 employees and call centres in five countries,” Mr Gamble said.
What sort of scams are happening?
The big rise in financial scams IFW sees utilise cryptocurrencies.
“Scammers are getting more and more sophisticated and the use of Bitcoin is becoming prolific around the country,” Mr Gamble said.
IFW deals with relatively large amounts of money so most of the scams it deals with relate to using crypto or other types of money transfers to buy bogus securities of one sort or another.
One crypto Ponzi scheme the group is chasing saw new investment flows used to pay existing ‘investors’ between 1 and 3 per cent interest per day in a scam worth at least $200 million globally.
The ACCC watches scams closely and is finding that so-called ‘Hi Mum’ scams are growing and cost Australians $2.6 million in the seven months to July 2022.
Typically a scammer will use WhatsApp to pose as family or a friend and claim they have lost or damaged their phone and are making contact from a new number.
Then, once they have developed a rapport with their target, the scammer will ask for personal information such as photos for their social media profile or money to help urgently pay a bill or replace the phone.
“We have seen an explosion in the number of ‘Hi Mum’ scams in the past couple of months, and so we are warning Australians to be very wary of messages from unknown numbers claiming to be from their children, parents, relatives or friends,” ACCC deputy chair Delia Rickard said in August.
Gerard Brody, CEO of the Consumer Action Law Centre (CALC), said invoice investment scams and spoofing scams are increasingly common.
“There is a large increase in the numbers of people affected by scamming,” he told The New Daily.
Invoice scams involve hackers seeing what payments are due and taking advantage.
“You may be expecting an invoice, but they send you a fake one,” Mr Brody said.
Spoofing scams involve con artists sending you communications that look like they come from your bank – using the bank phone number or even your account details.
You will be asked to make payments or resubmit account details, SMS codes or passwords, Once they have these, they help yourself to your cash.
The massive Optus data breach that left 9.8 million records exposed could also result in scams on customers.
Will the banks help?
If someone gets into your bank account and makes a transaction you didn’t authorise on your credit card the bank will reimburse you.
“But where people are tricked into making transactions themselves the banks will argue that the transaction was authorised by you and therefore they deny liability,” Mr Brody said.
Consumer groups like CALC are lobbying for regulatory change to make the banks make good on these transactions also, when there is no complicity or undue negligence.
Such a move would “create a greater incentive for the banks to invest in systems and practices as preventative measures”, Mr Brody said.
How to protect yourself
“It’s very difficult to protect yourself from scammers because they are becoming more sophisticated,” Mr Brody said.
When it comes to investing online, only use known and trusted websites like those of your bank, Mr Gamble said.
Other than those “do not invest your money in any sort of trade or investment online,” he said.
Even with sites you trust you are not in the clear.
“You can’t tell the difference between a fictitious fraudulent site and a real one,” Mr Gamble said.
The Australian Federal Police told The New Daily it was actively fighting cybercrime.
“The AFP has responded to the growing cybercrime threat, establishing a Cyber Command and significantly bolstering its cyber capacity.”
