Australian Competition & Consumer Commission Issues Report on 2018 Fraud Trends

On April 29, the Australian Competition & Consumer Commission (ACCC) issued its report for 2018 on scams activity, Targeting Scams.  Key points in the report included the following:

• In 2018, the ACCC’s Scamwatch service —  which provides information to consumers and small businesses about how to recognize, avoid, and report scams — received a record 177,516 scam reports reflecting more than AU $107 million in losses. That total represents an 18 percent increase in reporting since 2017.   Among all categories of scams reported to Scamwatch, investment scams (AU $38,846,635 in losses) and dating and romance scams (AU $24,648,024 in losses) remained the most financially harmful.
• When the Scamwatch reports are combined with reports made to the Australian Cybercrime Online Reporting Network (ACORN) and other state and territory government agencies, a total of more than 378,000 reports received reflected losses of AU $489 million. That total represents a 44 percent increase over the aggregate AU $340 million in losses reported in 2017.
• Among all victims reporting scam losses, the age cohorts with the largest losses were 55-64 (26 percent), 65+ (22 percent), 45-54 (20 percent), 35-44 (15 percent), and 25-34 (13 percent). Men filed fewer reports than women (79,600 versus 94,200), but reported more cumulative losses (AU $56.9 million versus AU $48.8 million).
• Significant trends in types of scams included:
  • Australian Tax Office (ATO) Scams: A total of more than 137,000 reports to the ATO and Scamwatch involved these scams, which are similar to online scams in which criminals claims to be with the U.S. Internal Revenue Service.
  • “Threats to Life, Arrest or Other” Scams: In 2018, reports and losses attributed to scammers threatening arrest, loss of benefits, and deportation increased to more than 19,000 reports, with AU $3.3 million in reported losses. This total represents a 45 percent increase over 2017.  The ACCC noted that “[t]he significant increase in ATO impersonation scams in late 2018 is a major contributor to this increase.”
  • False Billing Scams: Losses to false-billing scams increased by 97 per cent to AU $5.5 million. The ACCC noted that a large portion of these losses can be attributed to business email compromise (BEC) scams.
  • Remote Access Scams: These scams – which the ACCC described as {“[a] more elaborate version of the classic tech support scam in which scammers impersonate the police and ask for access to a victim’s computer to catch scammers” — resulted in filing of more than 11,300 reports to Scamwatch, with AU $4.7 million in reported losses (a 97 percent increase over 2017).
  • Cryptocurrencies in Scams: The ACCC stated there were 674 reports in which cryptocurrency was used to pay the scammers, with reported losses of AU $6.1 million. Those losses reflect a 190 percent increase over the AU $2.1 million losses reported in 2017.
  • iTunes and Google Play Cards in Scams: The ACCC reported an increase in losses from scams in which scammers requested payment through iTunes cards, with AU $3.1 million in reported losses. Scammers requesting payment through Google Play cards increased dramatically during 2018, as losses rose from AU $1,250 reported in July to AU $179,000 in December.
  • Scams Reported by Businesses: Businesses reported 5,846 scams, with AU $7.2 million in losses. BEC losses reported to Scamwatch totaled more than AU $3.8 million. When combined with reports to ACORN, losses to BEC scams exceeded AU $60 million. That total represents a 170 percent increase over the 2017 combined losses of $22.1 million in reported losses.  The ACCC specifically made reference to a number of reports indicating that BEC scammers were specifically targeting real estate deals, noting that “[t]he real estate sector is particularly attractive for scammers because of these large lump sum transfers between parties without a history of previous interaction.”

Note: Financial-crimes risk and compliance teams at companies with operations in Australia should take note of the ACCC’s findings and consider sharing information from the report with executives and employees based in Australia.  In addition, risk and compliance teams may find it useful to compare the trend information in the ACCC’s 2018 report and the FBI’s Internet Crime Complaint Center’s 2018 report.