Scammers stole more than $2bn from Australians last year – more than double 2020 total: ACCC
A few days after the call from “the Microsoft man”, Brian realized he had been scammed with his life savings.
The well-spoken caller had rung out of the blue, offered to fix a problem, taken over Brian’s computer and withdrawn $38,700 from the pensioner’s online bank account, leaving $300.
- Australians lost over $2 billion to scammers in 2021, ACCC estimates
- This is more than double the amount lost the previous year
- The rise was driven by a rise in crypto investment scams and pyramid schemes
“It’s all my savings,” Brian, 76, said.
Stories like this have become increasingly common, with the Australian Competition and Consumer Commission reporting a record rise in scams last year, many of which targeted vulnerable elderly victims.
Scammers stole more than double the amount from Australians in 2021 compared to the previous year, according to the ACCC’s Targeting Scams report, released on Monday.
The report compiles data from scam-reporting portals Scamwatch (operated by the ACCC) and ReportCyber (developed by Federal and State Police and Australian security agencies), as well as major banks, remittance senders and other government agencies.
Losses reported to all organizations totaled nearly $1.8 billion. Taking into account the estimated number of unreported scams, the actual losses amount to more than $2 billion, said ACCC Vice President Delia Rickard.
“Even our figure of over $2 billion still underestimates the amount lost,” she said.
“It’s a very scary number, and we know this year is going to be even worse.”
What’s behind the rise?
Losses from scams offering bogus investment opportunities more than doubled to $700 million in 2021, according to the ACCC report.
One of the main causes is the rise of cryptocurrency investment scams, which have seen reported losses increase by 270% to $99 million.
A typical method involved scammers setting up fake cryptocurrency investing and trading platforms to steal money from people looking to invest in cryptocurrency.
This sometimes turned into romance scams, whereby the targets were introduced to the fake investment platforms through their love interest.
“As a result, we see so many people losing large sums of money.”
There has also been a sharp increase in losses from pyramid and ponzi scams, largely due to ponzi investment scam apps.
These modern versions of pyramid schemes see targets innocently investing money in fraudulent schemes that only serve to pay existing investors.
Besides investment scams, the other type that has seen a big increase is payment redirection.
This involves the scammers impersonating a bank, business customer, or even a real estate settlement agent, to get the target to send them money.
Remote access scams, like the one that targeted Brian, also increased.
Losses reported to Scamwatch nearly doubled to more than $16 million, with people over the age of 65 losing almost half the money.
Are the scammers getting better?
Yes, they are, said Ms. Rickard.
“I’ve heard stories from overseas where traditional organized crime groups are getting off drugs and into scamming.
Figures from last year show that the increase in scams reported at the height of the pandemic shutdowns was not an aberration or a one-time event.
Before COVID, in 2019 Australians lost an estimated $634 million. In 2020, this amount has increased to $850 million.
At the time, the increase was partly attributed to the pandemic and people spending more time alone and on their phones, where they were vulnerable to things like email phishing.
This involves scammers impersonating a bank or other authority to trick targets into giving up personal information, including passwords.
The number of reports of phishing scams increased by 183% between 2019 and 2020.
One would have hoped that fewer Australians confined, and therefore isolated from each other, would see a decrease in phishing attacks.
But in 2021, those attacks still increased by 62%.
Last year even saw the biggest fraudulent text message campaign in Australian history.
From August 2021, thousands of Australians received text messages about missed calls, voicemails, deliveries and photo uploads.
The message asked them to click on a link. This downloaded malware which gave crooks access to passwords and accounts.
Reported losses from the scam, known as Flubot, were less than $11,000 in 2021, but the true figure was likely much higher, Ms Rickard said.
“What people have lost is an enormous amount of personal information,” she said.
“I think they were able to gain access to many people’s bank access codes. I don’t think we saw the full extent of financial loss because of that.”
What do we do ?
The steep rise in losses comes after years of concerted activity by Australian government agencies trying to stop the scammers.
“What’s frustrating is that I’ve never seen more scam action than in the past two years,” Ms Rickard said.
An example of this was scam calls, she said.
In December 2020, the telecommunications industry introduced a voluntary industry code to detect and block calls, on the recommendation of the Australian Communications and Media Authority.
In 2021, telcos blocked 357 million fraudulent calls, leading to a reduction in reports of such calls to the ACCC by almost 50% in 2022.
But the scammers have simply changed tactics, focusing on SMS, like the Flubot scam.
In response, Telstra introduced an SMS scam filter in April this year.
Again, the scammers have changed tactics, Ms. Rickard said.
But banks could do more, she added.
In Australia, banks processing online transactions do not check whether the account name matches the account number.
This makes it easier for hackers to perform payment redirection scams, impersonating a business or other legitimate party and asking the target to send payment to their account.
Australian government agencies have been asking banks to introduce name verification, also known as beneficiary confirmation, since at least 2020, but so far banks have refused.
“The introduction of beneficiary confirmation in the UK has led to a significant reduction in payment redirection scams,” said Ms Rickard.
“People are losing hundreds of millions of dollars, the technology is available [to stop this] and we would like to see it introduced as soon as possible.”
What does 2022 look like?
Early figures suggest losses will double again this year, Ms Rickard said.
Losses reported to Scamwatch are already approaching the 2021 total.
Brian’s $38,700 loss is part of that 2022 figure.
The retiree from Albany in Western Australia got ripped off just weeks ago and has already sold a beloved Commodore to restore the bank balance.
“I worked my whole life to have this beautiful car,” he said.
“And now I don’t have it.
“I am totally embarrassed by everything that has happened to me.”