Beware the pandemic scams
Online romance remains a favourite for scammers, but the pandemic is providing fertile new ground
Australians are on track to lose more than $200 million to scammers this year. According to Scamwatch, in 2020 they parted with $176 million, with 216,000 cases reported to authorities (10.6% involved financial loss). Already 2021 is looking worse. The figure for January and February is $43 million, with 40,000 cases reported (9.7% involved a loss).
“With another year of undoubted uncertainty ahead, we can be sure the threat landscape will continue to evolve and with the evidence pointing towards phish
ing remaining as one of most the successful tactics of choice by scammers, this will likely continue in 2021 as scammers look to capitalise on the ever-changing shifts in global news agendas,” says Crispin Kerr, vice-president for Proofpoint in Australia and New Zealand.
“Our own latest research shows that Australia is unfortunately above the global average for phishing attacks, so it’s clearly a tactic being employed throughout the country, with an unfortunately high degree of success.”
While scammers are becoming increasingly sophisticated, knowing what to look out for can save you a lot of heartache.
This year alone, the Australian Financial Complaints Authority (AFCA) has received more than 11,000 complaints related to Covid-19.
“Our sense is that scammers stepped up their activity to take advantage of people spending more time at home and feeling financially vulnerable,” says AFCA CEO Justin Untersteiner. “Scams were growing before Covid-19 but the pandemic has accelerated this trend.”
Recently scammers have been exploiting fears born of the pandemic. “Watch out for people preying on Covid fears,” warns Kate Carruthers, chief data and insights officer for University of NSW.
Australians do not have to pay for Covid tests or vaccines, but scammers would have you believe otherwise.
“They say, ‘we’ll put you on the list for vaccination if you give us some money,’ or they’ll tout an unproven medical treatment that cures Covid.”
The phone has been the medium of choice for Covid scammers, according to Carruthers. “Baby boomers are very prone to answering unknown numbers, so they’re vulnerable to phone scams.”
1. Cryptocurrency
In June last year, the Australian Securities and Investment Commission (ASIC) reported a rise in cryptocurrency scams from March to May 2020 of 20% year on year.
“Many cryptocurrency scams begin as dating and romance scams,” the Australian Competition and Consumer Commission(ACCC) tells Money.
Such scams are referred to as romance baiting. “Victims form a romantic connection with a scammer via dating sites and are then lured into investing in fake cryptocurrency investment schemes,” says the ACCC.
Many of these scams work by initially promising a profit, and this initial “profit” may even be returned to the victim in the hope they will double down with an even bigger investment. It may only be apparent that these profits are fake when you ask to withdraw larger portions of your funds or profits,” says the ACCC. “At this point, scammers may either disappear and stop all contact with you or may demand that you invest more money in order to access these funds.”
2. Investments
Bond investment scams are also on the rise, warns ASIC. Scammers call up unsuspecting investors offering high-yield bonds.
ASIC has outlined five common tactics:
• sending professional-looking but fake prospectuses with unrealistically high returns;
• falsely stating the bonds are issued by prominent financial services firms when this is not true and there is no underlying investment;
• falsely claiming investor funds will be pooled to invest in government bonds or the bonds of companies with AAA credit ratings;
• falsely claiming the purchase price of the bonds is protected under the Commonwealth government’s financial claims scheme; and
• using contact details gathered online through fake investment comparison websites to call people and pressure them to invest or risk missing out.
Karen Chester, ASIC’s acting chair, says investors should be suspicious of bond yields that are unusually high, meaning they’re either a scam or carry high levels of risk. “Investors searching for income-generating investments are at risk of being duped into buying these
imposter bonds,” she says. “Any prospectus offering incredible returns in today’s economic environment is likely to be just that: incredible.”
3. Ransomware
These attacks are an ever-present threat. “Primarily ransomware is malware that prevents your access to your device or data in exchange for payment,” says Suelette Dreyfus, senior lecturer at University of Melbourne’s school of computing and information systems. “They block access and you’ll receive instructions about how to pay.”
For example, somebody sends you an email claiming to be your bank asking for you to click a link to confirm personal details, you do so and your computer becomes infected.
“In the old days, people had to go to a branch to rob a bank,” adds Carruthers. “These days people can do it from their basement while wearing pyjamas, and you don’t have to be very sophisticated to do it.”
Some victims take the risk and pay the ransom in the hope of getting their data back. But the official guidance is to avoid doing so.
“On the one hand, people need their data back, and on the other hand there is the recommendation from government,” says Dreyfus. “Part of that is because it encourages more attacks, but also because ransomware perpetrators don’t necessarily unlock your device.”
4. Identity theft
Data theft also takes a huge financial toll. The Australian Institute of Criminology estimates the direct and indirect cost of identity theft at a staggering $3.1 billion in 2018-19, a 17% increase on 2016. This number includes losses suffered by government agencies, businesses and individuals. About a quarter of us have had our personal data misused at some point in our lives.
“If cyber scammers are able to build a profile of you, they could potentially do things such as take out a loan in your name,” warns Dreyfus. “It doesn’t necessarily have to be your bank account – it could be, say, an insurance account.”
In 2016, a woman even had her ACT home sold by fraudsters for $400,000 while she was living in South Africa.