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ACCC: Australians were duped over AU$2.1m to Cryptocurrency-related scams in 2017

A detailed report from Australia’s consumer watchdog found many locals got caught up in ‘pyramid’ cryptocurrency schemes last year, hoping to capitalise on the ‘success’ of bitcoin.

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“As the value of actual cryptocurrencies increased, so too did the scam losses in what people thought were real investments,” the report continued. “By the end of the year, reports of losses related to cryptocurrencies exceeded AU$2.1 million but as with other scams, this is likely the very tip of the iceberg.”

According to the ACCC, examples of cryptocurrency scams in 2017 included fake initial coin offerings (ICOs), which purport to be the launch of a new cryptocurrency.

Other scams, the ACCC said, capitalised on the general confusion about how cryptocurrency works and instead of people discovering how to directly buy cryptocurrencies, many found themselves caught up in what were essentially pyramid schemes.

“A number of reports showed that victims entered into cryptocurrency-based scams through friends and family who convinced them they were onto a good thing, a classic element of pyramid schemes,” the watchdog wrote.

“Not all cryptocurrency-related scams involved victims attempting to invest in stocks or initial coin offerings. Many scammers also ask for payment through cryptocurrencies for a variety of scams because it is easier to remain anonymous while receiving payment.”

An example is paying ransomware through bitcoin.

In total, the ACCC reported Australians lost AU$340 million to scammers in 2017, the highest loss since stats were put on record.

More than 200,000 scam reports were submitted to the ACCC, the Australian Cybercrime Online Reporting Network (ACORN), and other federal and state-based government agencies in 2017.

Investment scams topped the losses at AU$64 million; while dating and romance scams caused the second greatest losses at AU$42 million.

“Some scams are becoming very sophisticated and hard to spot. Scammers use modern technology like social media to contact and deceive their victims. In the past few years, reports indicate scammers are using aggressive techniques both over the phone and online,” ACCC Deputy Chair Delia Rickard said.

According to the ACCC, Scamwatch received almost 33,000 reports of threat-based impersonation scams in 2017. It said over AU$4.7 million was reported lost and more than 2,800 people gave their personal information to these scammers.

“The ATO will never threaten you with immediate arrest; Telstra will never need to access your computer to ‘fix’ a problem; and Centrelink will never require a fee to pay money it owes you,” Rickard continued. “Finally, none of these organisations will ask you to pay using iTunes gift cards.”

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Watch out for new Telstra phone service provider scam in Queensland Australia

IF YOU are a Telstra customer and receive an email stating you’re entitled to a refund – delete it immediately.

There have been reports in Qld Australia of an email which claims customers have been charged twice by the phone service provider due to a system error. Sample screen shot telstra scam demand below

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Henry Sapiecha

Warning over terrifying email death threat scam

POLICE say a scary new email shakedown, which claims to be from a hitman who will kill you unless you pay $100,000, is part of a rising trend. Here’s what to do if it lands in your inbox.

Hitman scam: Police warn against new email that threatens to kill you if you do not pay

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YOU get an email from a stranger who claims they have been hired to kill you – what do you do next?

Police say the new scam is on the rise in Queensland, with criminals making terrifying threats to frighten victims into handing over money, the Sunshine Coast Daily reports.

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“The sender claims to be a hitman hired by someone you know,” a Queensland Police Service spokesman said in a statement.

“The only way to save your life is by sending sums of money ranging from $10,000 to $100,000.”

The sender claims to be watching the victim and warns against contacting the police or informing family members.

Police have urged people who receive the scam email to stay calm and follow a series of simple steps.

Police have urged anyone who receives a “hitman” email to remain calm, re-read the email and search for any clues the sender actually knows anything about the victim, including:

● Being addressed by name

● Mentioning a location you frequent as one of the places they’ve followed the victim

● Knowing the victim’s address or phone number

● Knowing the victim’s place of business

● Mentioning any family members by name

Police have advised anyone who receives a ‘hitman’ or any other kind of extortion email to:

● Delete the email immediately. These messages are sent at random, so they won’t know if they have reached a live email address or number unless you respond.

● Do not respond to these emails.

● If you do, the scammers will escalate their intimidation and attempts to get your money.

● Never send details or personal information to anyone you don’t know or trust.

● If you are concerned for your safety, contact the police immediately.

● If you have information for police, contact Policelink on 131 444 or provide information using the online form 24 hours a day.

You can report information about crime anonymously to Crime Stoppers, a registered charity and community volunteer organisation, by calling 1800 333 000 or via crimestoppersqld.com.au 24 hours a day.

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Henry Sapiecha

Losses from reported Australian hacking victims quadrupled in 2016: ACCC

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The Australian Competition and Consumer Commission (ACCC) has reported a four-fold increase in hacking scams, with AU$2.9 million lost to such activity in 2016, up from AU$700,000 in 2015.

According to Targeting scams: Report of the ACCC on scams activity 2016, businesses bore the brunt of these scams, with over half — AU$1.7 million — being attributed to businesses.

“While the digital economy presents many opportunities and efficiencies for businesses, it also presents significant risks,” ACCC deputy chair Delia Rickard says in the report’s foreword.

“Scams targeting businesses are becoming increasingly sophisticated using modern technology to make fake emails, invoices and websites appear legitimate to even the astute business person.”

While the digital age is hitting businesses in Australia, the report [PDF] highlights that consumers are also being affected by scammers, with digitisation providing the opportunity for scammers to try new tricks.

Online scams — those executed via the internet, email, social networks, and mobile apps — outnumbered phone-based scams in 2016, with an increase of 130 percent over 2015.

Elsewhere in the report, losses to online scams accounted for 58 percent — AU$48.4 million — of total losses, while social media was a particularly busy platform used by scammers to lure victims, netting losses of AU$9.5 million in 2016 compared with AU$3.8 million in 2015.

Of the social media scams, the most prevalent were related to online dating and sextortion, a form of blackmail in which compromising images of the victim are used to extort money.

Business scams top $3.8 million: ACCC

Jason King wasn’t surprised to get an email from the chairman of Launceston Church Grammar School’s board asking him to process a payment to Hong Kong that day.

The school sometimes has cause to make payments to Hong Kong for the school’s accountant, so there was no immediate concern.

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“It had [the chairman’s] name and an email address that looked reasonable,” Mr King says. “They were asking for a payment of $121,780. That was the red flag as we don’t ever pay that much to Hong Kong.”

Mr King called the chairman who knew nothing at all about the payment and hadn’t sent the email.

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Scams on the rise

It was a close call for the school and data released by the Australian Competition and Consumer Commission on Friday shows scams suffered by businesses are on the rise.

Nearly 6000 businesses reported being targeted by scams in 2016, according to the watchdog’s Targeting Scams report. Losses totalled about $3.8 million, an increase of almost 31 per cent.

The highest losses were to computer hacking, fake investment schemes and buying and selling scams, according to reports to Scamwatch over the past year.

Small businesses with fewer than 20 staff are in particular the most vulnerable and accounted for nearly 60 per cent of reported losses.

Lack of reporting

ACCC deputy chairman Michael Schaper says the $3.8 million in reported scams is “really the tip of the iceberg”.

“We already know it’s a well established phenomenon that most of the people who contact Scamwatch haven’t actually lost money, only 10 per cent have,” he says. “We know that small businesses are much more reluctant to report losses. There are two reasons, one is the time and energy and the second one is that a lot of small business think that if they report a scam their insurance premiums are going to be threatened.”

Mr Schaper says while small businesses are less likely than the general public to report a scam, small businesses are also a far more attractive target than the general public.

“It’s easier to find them; those [businesses] trading online have a website presence and you can work out who to target,” he says. “Secondly, we know small businesses don’t have good record keeping systems in many cases and their software is often very basic so they are ripe pickings.”

We know small businesses don’t have good record keeping systems in many cases and their software is often very basic so they are ripe pickings.

Michael Schaper

Mr Schaper says recent events with the WannaCry ransomware scam show businesses can be just as vulnerable to scams as anyone else in the community.

There are “steep increases” in scammers contacting businesses, according to the ACCC.

What to look out for

The top three scams identified by Scamwatch against businesses are:

  1. Ransomware. These scams trick a victim into downloading a virus that infects computer systems and prevents user access until payment is made to unlock it. In 2016, reports indicate that there was an increase in ransomware emails to businesses, purportedly from legitimate companies such as Australia Post or a utility provider.
  2. Business email compromise scams. These are a form of hacking scam that operate by the scammer obtaining access to a business’ email address. The scammer will then send an email (purportedly from senior management) to the business’ suppliers advising of new payment arrangements and requesting a wire transfer to the new account.
  3. Investment scams. These scams are promoted as business opportunities (for example sports investment or stock broker scams, superannuation schemes or managed funds) and promise inflated returns but are, in reality, nothing more than a method used to drain a business of its funds.

Mr Schaper says 85 per cent of scammers make contact with businesses via email or phone so it is important to be wary. He says small businesses can help protect themselves by backing up data.

“Backing up your data and keeping it offline or backing it up to the cloud is the single most important thing you can do to protect yourself from that threat,” he says. “If you pay a false bill by and large it won’t be the death knell of your business but if you lose all the information about your clients you could lose your business overnight.”

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Henry Sapiecha

Email CEO scams costs companies $2bn

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Scams  where criminals impersonate the email accounts of chief executives have cost businesses globally  more than $2bn in around two years, says the US Federal Bureau of Investigation.

The FBI has seen a sharp increase in “business email crime,” a simple scam that is also known as “CEO fraud”, with more than 12,000 victims affected internationally

In this scam, a criminal mimics a chief executive’s email account and directs an employee to wire money to an overseas bank account. By the time the company sees it has been duped, the money has vanished.

The average loss is $120,000 but some companies have been tricked into sending as much as $90m to offshore accounts, US authorities say.

Reports of CEO fraud are on the increase. Between October 2013 and August 2015, about $1.2bn globally was lost to the scheme, the FBI said, but that loss increased by another $800m in the past six months. US authorities have traced the money involved to 108 countries.

“Criminals don’t have borders and this is a global problem,” said James Barnacle, chief of the FBI’s money laundering unit. “We’re working with our criminal investigation resources, our cyber resources, our international operations divisions — which is all our legal attachés overseas — and we’re working with foreign partners around the world to try to tackle this crime problem.”

The rise in reported CEO frauds can be partly attributed to companies detecting the crime, but it also reflects the simple nature of the scheme that can be run from anywhere around the globe.

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“It’s easy. All you need is a computer,” Mr Barnacle said.

Most of the offshore bank accounts in which the money ends up are located in Asia or Africa, where it can be harder for the US to gain the assistance of local authorities.

The FBI has seen similarities between different CEO fraud schemes but it is not clear if there is one dominant global ring.

“We’re putting more resource to it. We’re trying to find those patterns,” Mr Barnacle said.

The FBI advises companies to be more guarded with their information even if it means taking additional steps that are not cost-effective, such as making a phone call to the executive to confirm the transfer.

The crime has hit very large companies and small ones. Most recently, there have been new reports in the US of criminals targeting real estate firms to steal closing fees on housing sales. Some companies have been asked by imposters to email employee wage and tax statements.

Last year police from Italy, Spain and other European countries arrested more than 60 members of an alleged criminal group, including several Nigerians, for their role in an email fraud scheme that affected hundreds of individuals and tens of companies.

Still, few cases have been made, reflecting the challenges of combating international cyber crimes.

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Henry Sapiecha