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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.


“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.” (8)


This scam costing Australians $22m more than the dating scams

Investment scams cost Australians more money than dating scams last year, with losses of more than $60 million, an Australian Competition and Consumer Commission report has discovered.

Combined data from the ACCC and the Australian Cybercrime Online Reporting Network (ACORN) found investment scams cost Australian consumers $64 million in 2017. The average reported loss was $53,827, with 20 reports of losses of $400,000 or more.


ACCC deputy chair Delia Rickard said there had been both an increase in the amount of money people were losing to investment scams and an increase in people reporting them.

“Until recently, it’s usually been dating and romance scams that have had the highest losses but they have been overtaken by investment scams in the last year, and people are losing significant amounts of money to them,” she said.

Investment scams offer a range of fake financial opportunities with the promise of quick returns, often using smooth talking, glossy brochures or professional-looking websites to lure victims.

“They’re not particularly new scams,” Ms Rickard said. “However, I think in low inflation times, at low interest rate returns, it makes investments more attractive to people who are concerned about things like their retirement income.”

Dating and relationship scams were still second for sheer cost, with Australians losing just over $42 million to those scams last year, equal with the year before.

Ms Rickard, who is also chair of the Scams Awareness Network, said while the number of reported dating and relationship scams had dropped, the platforms used by scammers have started to change.

“Scams are increasingly being delivered by social media, places like Facebook, so it’s important to be vigilant,” she said.

“Certainly romance scams particularly have shifted to social media – they used to all be once through dating sites.”

Across scams reported to the ACCC’s Scamwatch, ACORN and other government agencies, Australians lost a whopping $340 million to scams in 2017, the report concluded.

That figure is $40 million more than in 2016, and the first time reported losses have risen above $300 million, the ACCC deputy chair said.

“I think even that over-$340 million figure … significantly understates the extent of losses to scams,” she said.

Older people are more vulnerable to all types of cons, with people aged 55 to 64 losing the most money, followed by those aged over 65.

More women reported falling victim to scams than men, but “men tend to lose more money, and that’s probably because men tend to have more money than women,” Ms Rickard said.

“In terms of the scams where you lose a great deal of money, women are more likely to be the victims of romance scams, men are more likely to be the victims of investment scams.”

From reports to the ACCC alone, men reported losses of $22.8 million to investment scams, while women lost $12.7 million to dating and romance scams.

The most common scams reported to the ACCC and ACORN were false billing scams, identity theft and phishing. The ACCC’s report found the real cost of those types of scams was difficult to quantify as the primary aim of the scammer is to gather information for future use.

“The ACCC received over 55,000 reports of these kinds of scams in 2017 and there is little doubt that many more were encountered but not reported,” the report said.

Ms Rickard said there was also an increase in scams involving cryptocurrencies.

“Whether it’s fake exchanges – so you’re not really investing in the real thing – or people asking to be paid by cryptocurrency, that would be another new trend for this year,” she said.

For people worried about scams, Ms Rickard said the Scamwatch website has much helpful information.

“You really will find all the information about scams that are going around, how to identify them, how to avoid them, and what to do if you’ve been scammed,” she said.

The ACCC also has a hard-copy publication, The Little Black Book of Scams, which Ms Rickard said is especially helpful for older people.

A scammer’s trick which involved posing as an officer from the ATO duped many Australians in late 2017. Would you have been wiser? The author here was almost the victim of an attempted scam as per above only just days ago. May 2018. I gave the caller both barrels through the phone. The recorded mesage was in great English.Calling back the number a male Indian voice responded & said he was with the Australian Tax Office. That 02..number is now silent..


Henry Sapiecha