Australians are expected to lose $532 million to scams by the end of 2019 — and romance scams are the most 'devastating'

Flickr/ Hannah Mariyam.
  • As National Scam Awareness Week kicks off, the ACCC is projecting the amount of money Australians lose to scams to exceed $532 million by the end of 2019.
  • ACCC Deputy Chair Delia Rickard told Business Insider Australia that cryptocurrency investment scams are on the rise but dating and romance scams are the most “devastating” for victims as they could lose their homes and their friends.
  • New research from Suncorp Bank and Queensland University of Technology has found Australians are more at risk of falling for scams when they are facing a period of change such as divorce or moving house.

As National Scams Awareness Week commences on 12 August, consumer and competition regulator the ACCC expects the amount of money Australians lose to scams to exceed $532 million by the end of 2019 — surpassing half a billion dollars for the first time.

The projection follows the ACCC’s release of a report in In April 2019 which found Australians lost $489.7 million to scams in 2018. This was a 44% increase from the $340 million reported in 2017.

The report also identified the top scams by financial losses in Australia in 2018, with investment scams taking the title position, at $38.8 million.

The ACCC highlighted that investment scams “are one of the most sophisticated and convincing scams” and are particularly big on social media. Some of the most common social media scams include ‘Facebook lottery scams’ and cryptocurrency scams. Between January and July 2019, cryptocurrency scams incurred losses of $14.78 million alone.

“The ones we’re seeing a lot of at the moment are cryptocurrency scams,” ACCC Deputy Chair Delia Rickard told Business Insider Australia.

“We’re seeing quite a lot of Ponzi schemes with them and they’re very sophisticated — you get to talk to a whole range of people who sound very knowledgeable, they have websites…[and] you can track your earnings on there.”

She said in the early days the scammers might let people take some of their earnings out as a way to instil a sense of trust with their victims, before pressuring them to invest more money. “And then after a period – it might be weeks, it might be a month or two – the whole site just disappears and all your money’s gone with it.”

Last week Queensland Police charged five people with operating a cryptocurrency scam in the Gold Coast.

Dating and romance scams caused the second largest amount of financial losses ($24.6 million) after investment scams.

And, despite accounting for fewer total losses, Rickard said dating and romance scams are probably the worst of all.

“They’re just devastating scams and people can lose their homes, their friends, everything through it,” she said.

Rickard added that more victims of dating and romance scams are being approached on social media sites such as Facebook. “If you haven’t got your privacy settings tied down… so only your friends and family people you’ve accepted as friends can see it, [scammers will] often stalk you for a while beforehand so that they can seem to, when they get a contact, share your values, share your interests [and] just make a quick match.”

She added that romance scammers tend to target women over 45 in particular but men also fall victim because at that age, scammers know they’re likely to have some money on them – whether it’s equity in the home or superannuation.

“They’ll be quick to move you off the site, quick to profess their love for you [and] will usually have some reason why they can’t see you in person,” Rickard said. “But eventually they will always ask for money. And their excuses might sound incredibly plausible given the sort of tale they’ve been spinning to you over weeks or months, but it is a scam.”

Rickard advised that it’s best to always do a google image search of the profile picture – and if you’ve seen MTV’s Catfish, you’ll have seen how many people can easily use a different image to hide who they truly are online.

She also said you should look out for inconsistencies in their stories and be suspicious if for one reason or another, you can’t meet.

The next largest scam by financial loss, according to the ACCC’s report released in April, were false billing ($5.5 million), where scammers send invoices to individuals or businesses for items that were never ordered.

This was followed by remote access scams ($4.8 million) where a scammer contacts victims claiming that their computer has a virus and remote access is needed to solve it.

Following that were ‘threats to life’ scams ($3.3 million) where victims’ lives are threatened for reasons such as not paying taxes.

Rickard’s comments come as new research from Suncorp Bank and the Queensland University of Technology has found Australians are more at risk of falling for these scams when they are facing a period of change.

QUT’s Cassandra Cross, an expert in the behavioural indicators behind scams, said, “If you’re ending a long term relationship or going through divorce you might be more likely to fall for a romance scam, or planning to retire you might be at greater risk of an investment scam, and if you’re moving house may fall victim to a financial scam.

“Christmas, end of financial year or festive holidays are also prime times because scammers recognise these seasonal events are typically sentimental where people spend time with family and friends making you more emotional, time poor and distracted.”

To further prevent people from getting caught by scams, Rickard advised people to be aware of how scammers operate.

“Some of the core things we always recommend is if somebody calls you out of the blue, no matter who they say they are – and they all pretend to be well known and trusted institutions – don’t give them any personal information. If you think it might be real, go and independently source the phone number for the organisation they’re pretending to be,” she said.

“Call and check whether or not it’s real. If someone calls you wanting remote access to your computer telling you there’s a problem with it for one reason or another – never, ever, ever give anyone remote access to your computer and keep your passwords strong. Change them regularly.

“And unfortunately, if it sounds too good to be true, that old adage, remember, it probably isn’t true.”

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