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Investment scams prove lucrative

Tuesday 22 May 2018

Fraud Risk 

During National Scam Awareness week, the Australian Competition and Consumer Commission (ACCC) released its Targeting Scams Report.

With calculated accumulated losses reported to the ACCC and other agencies amounting to $340 million—approximately $91 million reported to the ACCC alone—the figures are sobering.

According to the Report, phishing, identity theft, and false billing were the top three scams reported in 2017.

The same day the ACCC released its Report, the Australian Securities and Investments Commission (ASIC) highlighted that, this year, investments scams have replaced romance and dating scams as the most-profitable form of fraud.

“Offshore cold-calling is the most common type of investment scam, where a compelling investment offer is delivered by someone who will then back up the pitch with a slick website, fake research and insistent follow-up calls,” said ASIC Deputy Commissioner, Peter Kell.

The corporate regulator said their register of ‘Companies You should Not Deal with’ had 45 entries in 2017.

“Reports to ASIC about investment scams in 2017 show that $4.9 million was lost by investors, with the average loss being $82,973,” Kell said.


Business scams
According to the Report, website Scamwatch received 5,432 reports from businesses, with the average loss evening out at $10,935.

“The typical business scam in 2017 was delivered via email (60 per cent) and money was sent via bank transfers (85 per cent) rather than through remittance services or cryptocurrencies, which are common in other scams. This indicates that typical business scams presented in writing are relatively convincing and seek payment via trusted financial channels.”

However, the Report also indicated that the impact on Australian businesses is likely to be greater than what was reported to Scamwatch in 2017.

New South Wales Small Business Commissioner has authorised its own report on business cyber-crime. One of its findings is that cybercrime has a lot of overlap with the type of scams discussed in the ACCC’s Report.
Cyber-crime costs Australian businesses $1 billion annually.