Scamming 2019

A LOOK AT THE STATE OF ONLINE SCAMS IN THE LAST YEAR.

EVERY NOW AND then it’s worth taking a look at the state of scammery in Australia. In spite of all the publicity, in spite of how careful most of us have become in our online and phone interactions, scams are still big business. Bigger than ever, in fact. In 2017, a total of $91 million in losses to scams were reported to Scamwatch (which is an Australian Competition and Consumer Commission initiative). In 2018, that rose to $107 million.

There were over 177,000 reports made to Scamwatch, and of those nearly 10% resulted in financial loss. And that only includes incidents actually reported; likely there are many thousands of incidents that were never reported because the victim was too embarrassed or because the target didn’t think it was worth reporting. Indeed, scam attempts are so common now that most of us don’t even bother trying to report. It’s just the cost of being on the internet or having a phone line.

So this month we thought we’d take a walk through the most effective scams of the past year in terms of dollars lost. These aren’t necessarily the one with the most reported incidents – phishing scams nearly always win that race – but the ones that took in the most money.

It’s probably worth noting that you, the intrepid TechLife reader, are probably savvy to most or all of these scams. Your uncle Bruce, the one who calls you for tech support to plug in a router, probably isn’t. So even if you’re across all the scams covered here, it’s worth passing on this article to those in your family who might be more inclined to be credulous the next time someone calls and tells them they’re going to jail for tax fraud.

A LOOK AT THE TOP FIVE TYPES OF SCAMS

So let’s go back a take a look at the types of scams that made the most money last year:

INVESTMENT SCAMS

This actually covers a range of different scams, although the theme is pretty consistent: a little money up front for an incredible return. As always, if a deal seems too good to be true, then it is.

One common type is the advance-fee fraud, where a “broker” contacts you and tells you about an incredible business opportunity. Depending on the effort put in by the scammer, the pitch may be very convincing, with graphs, charts, fake websites and testimonials; they may even talk to you about risk. You just need to pay a brokerage fee or “buy in” upfront and you’re in... until it’s revealed that there is no deal and the scammer disappears with the money.

Then there are ponzi/pyramid and multi-level marketing schemes, where new investor money is used to pay off earlier investors. These are particularly prevalent on internet forums: those “I make $4,000 a day working at home” posts are essentially pyramid schemes.

There are also pump and dump schemes, where scammers will use online forums and other mechanisms to promote a lightly-traded stock, only to dump the stock when the price rises, causing it to crash. Cryptocurrencies are a common victim of this as well.

Although Scamwatch uses a separate category for them, we should also mention sports scams here, which gained some currency during the last Melbourne Cup where a significant number of

these cropped up. This is where the scammer tells you they have a sure thing (often through some miraculous modelling software) or you should join a betting syndicate that has the whole thing worked out so there’s no chance of loss.

DATING SCAMS

Although the incidence of dating scams is quite small, it remains consistently one of the most effective types of scams, with lonely individuals often paying tens of thousands of dollars to fake online girlfriends or boyfriends.

These usually happen through dating websites, though in some cases they can start over email or social media.

The scammer will create a fake profile, often using pictures downloaded from the internet. They’re not always supermodel-attractive – instead they’re actually quite calibrated to appeal to certain fantasy stereotypes: for example, the soldier who has lost his wife and is looking for love again.

Typically the scammer will express a high level of interest very quickly, will try and initiate contact outside of the dating app quickly (but not in person) and has a job outside the country. Then when the victim is invested, there will be a medical emergency and they need money quickly, or they need to borrow money quickly for some reason. Once the victim is run dry, they disappear.

A good start in avoiding dating scams is to do a Google image search on their profile, since many profile photos are just downloaded from the internet. In Chrome now, you can just right click on an image to do a Google image search. Also check for inconsistencies in their profile and their comments, and never send anyone money that you’ve never met in person.

FALSE BILLING

This one is pretty simple, but surprisingly effective: the scammer sends a fake bill for domain renewal, office supplies, magazine subscription renewals, internet search optimisation and so on. Sometimes they are the result of phishing or spear phishing, where the scammer knows you have a relationship with a particular institution (such as a bank) and will send you an invoice that appears to come from that institution.

REMOTE ACCESS SCAMS

Most people have received that call. Out of the blue, “Microsoft” or “Telstra” contacts you and says a problem has been detected with your computer. You just need to install some software and everything will be set aright.

In some cases, the software itself is the scam – you pay real money for software that does nothing. Often as not, that’s just the beginning of the scam, and the software is actually malware that gathers your personal details and monitors your online activity. And, of course, they’ve now harvested your credit card details when you paid for the software.

THREATS TO LIFE AND ARREST

This is a growing category, becoming particularly prevalent in the past few years thanks to tax scams (where you get a call saying there has been an anomaly in your tax returns and the police are on their way – unless your pay off your debt immediately).

In its purest form this type of scam is a straight-up threat: “pay us or well send someone to kill you”, but more often the scammer is pretending to be someone in authority: the Australian Tax Office, the Federal Police, the Department of Immigration and so on. Then they will threaten your liberty unless you pay a “fee” immediately.

These scams can be startling and scary – but as with all scams, a little knowledge of the scam will get you through.