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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.

TAX REFUND MONIES STOLEN FROM THE ATO

SCAMMERS & ON LINE THIEVES STEALING YOUR TAX REFUND AFTER ID THEFT

The Australian Taxation Office has been targeted more than 11,000 times by identity fraudsters attempting to steal tax refunds in the 2014-2015 financial year.

And a help-service for victims of identity crime says it is being inundated with taxpayers whose IDs have been hijacked and their tax returns robbed.

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The ATO recorded 91,000 “revenue fraud incidents” in 2014-15. Photo: Louie Douvis

The 11,000 attempts at ID fraud are part of the wider picture of 91,000 “revenue fraud incidents” recorded on the ATO’s systems in 2014-2015.

Only the efforts that were detected and foiled are recorded, according to the agency, with the full extent of successful frauds unclear.

But iDcare, a service that helps victims rebuild their identities after they have been stolen, says the volume of calls for help it is currently receiving indicates that criminals are reaping a tax-time bonanza from unsuspecting taxpayers.

Managing director Dave Lacey said his staff had dealt with at least 400 cases this financial year involving tax refund theft.

He said taxpayer money was being lost as the ATO’s process was typically to determine an initial refund was fraudulent and then reissue the funds to the victim.

“We’re in tax fraud season at the moment. It’s organised crime. It’s big business. This has been going on for months now,” he said.

Mr Lacey said the biggest impact on victims was often not the initial financial loss but the effect identity theft had on their mental health, with one in five – almost one in four – requiring ongoing mental health support.

He said this was largely because of how victims were treated by government agencies and organisations when they tried to follow up on the fraud, seek answers for how it occurred and re-establish themselves.

“We test these things continuously and regrettably the standards are very low,” Mr Lacey said.

Fairfax Media revealed last week that sophisticated cyber-crims had managed to penetrate employers’ payroll systems, making off with detailed information on unsuspecting workers and using the data to lodge bogus tax returns.

Other victims have told how their legitimate tax refunds had been siphoned off into bank accounts operated by the fraudsters after fake MyGov profiles had been built by the thieves.

The ATO says it stopped about $9 million in refunds going out in 2014-2015 after finding they had been fraudulently claimed and the previous year the figure was even higher, with $17 million prevented from being paid amid 18,000 attempts at ID fraud.

Victims have complained about a lack of police follow-up, but an ATO spokeswoman said the agency had its own investigators who teamed up with the Australian Federal Police when frontline police powers were needed.

“The ATO maintains a criminal investigation capability that investigates significant tax crime matters, which includes identity crime enabled refund fraud and refers briefs of evidence to the Commonwealth Director of Public Prosecutions for consideration and prosecution,” the spokeswoman said.

“The AFP executes search warrants in support of ATO investigations and the ATO refers matters to the AFP for investigation when AFP capabilities are required.”

tax fraud victim image www.scamsfakes.com

ATO tax fraud scam

Paul Francisco has had his tax refund stolen by fraudsters two years in a row. The ATO have been unable to address the problem and to make matters worse they have sent him a request for payment of tax debt.

Do you know more? Email lisa.cox@fairfaxmedia.com.au.

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Henry Sapiecha