Days after the call from “the man from Microsoft,” Brian realized he had been ripped off from his savings.
The articulate caller had called out of the blue, offered to fix a problem, took control of Brian’s computer, and withdrew $38,700 from the retiree’s online bank account, leaving $300 behind.
Most important points:
- Australians lost more than $2 billion to scammers in 2021, ACCC estimates
- This is more than double the loss of the previous year
- The surge was driven by an increase in crypto investment scams and pyramid schemes
“It’s my entire savings,” said Brian, 76.
Stories like this are becoming more common, with the Australian Competition and Consumer Commission reporting a record surge in scams last year, many of which targeted vulnerable elderly victims.
Scammers stole more than double the amount from Australians in 2021 than the year before, according to ACCC’s Targeting Scams report, released Monday.
The report collects data from the scam reporting portals Scamwatch (operated by the ACCC) and ReportCyber (developed by the state and federal police and Australian security agencies), as well as major banks, money transfer companies and other government agencies.
Reported losses for all organizations totaled nearly $1.8 billion. Taking into account the estimated number of unreported scams, actual losses exceeded $2 billion, ACCC deputy chairman Delia Rickard said.
“Even our plus $2 billion figure still underestimates the amount lost,” she said.
“It’s a very scary number, and we know this year will be even worse.”
What’s behind the rise?
Losses from scams that offer bogus investment opportunities have more than doubled to $700 million by 2021, according to the ACCC report.
A major cause of this was the rise of cryptocurrency investment scams, which increased reported losses by 270 percent to $99 million.
A typical method involved scammers setting up fake investment and cryptocurrency trading platforms to steal money from people who want to invest in cryptocurrency.
This sometimes changed with romance scams so that the targets were introduced to the fake investment platforms through their love interest.
“As a result, we see so many people losing large sums of money.”
There was also a large increase in losses related to pyramid and ponzi scams, largely due to investment ponzi scam apps.
These modern versions of pyramid schemes see targets investing innocent money in fraudulent schemes that only serve to pay existing investors.
Investment scams aside, the other type that saw a big increase was the diversion of payments.
This involves scammers impersonating a bank, a corporate client, or even a real estate broker, in order to trick the target into sending money.
Remote access scams, such as the one targeting Brian, also increased.
Losses reported to Scamwatch nearly doubled to more than $16 million, with people over 65 losing nearly half the money.
Are scammers getting better?
Yes, they are, said Mrs. Rickard.
“I’ve heard stories from abroad of traditional organized crime groups getting off drugs and getting scammed.
Last year’s numbers show that the surge in reported scams during the height of pandemic lockdowns was not an aberration or a one-off.
Pre-COVID Australians lost an estimated $634 million in 2019. In 2020, that rose to $850 million.
At the time, the rise was partly attributed to the pandemic and people were spending more time alone and on their phones, where they were vulnerable to things like email phishing.
This means that scammers impersonate a bank or other authority to deceive targets into disclosing personal information, including passwords.
The number of reports of phishing scams increased by 183 percent between 2019 and 2020.
It may have been hoped that fewer Australians in lockdown, and thus isolated from each other, would see a decrease in phishing attacks.
But in 2021, these attacks increased by another 62 percent.
In fact, last year saw the biggest scam SMS campaign in Australia’s history.
As of August 2021, thousands of Australians received text messages about missed calls, voicemails, deliveries and photo uploads.
The message asked them to click on a link. This downloaded malware that gave crooks access to passwords and accounts.
Reported losses from the scam, known as Flubotwere less than $11,000 in 2021, but the actual figure was likely much higher, Ms Rickard said.
“What people lost was a huge amount of personal information,” she said.
“I think they got access to a lot of people’s bank codes. I don’t think we saw the full extent of the financial losses because of that.”
What is being done?
The large increase in losses comes after years of concerted activity by Australian government agencies trying to stop scammers.
“The frustrating thing is that I have never seen more action against scams than in the past two years,” said Ms. Rickard.
An example of this was scams, she said.
In December 2020, the telecom sector introduced a voluntary industry code to detect and block the calls, on the recommendation of the Australian Communications and Media Authority.
In 2021, the telcos blocked 357 million scam calls, resulting in a nearly 50 percent reduction in reports of such calls to the ACCC by 2022.
But scammers just changed their tactics and focused on texting like the Flubot scam.
In response, Telstra introduced: an sms scam filter in April this year.
Again, scammers changed their tactics, Ms Rickard said.
But banks could do more, she added.
In Australia, banks that process online transactions do not verify that the account name matches the account number.
This makes it easier for hackers to run payment redirection scams, impersonate a company or other legitimate party and ask the target to send payment to their account.
Australian government agencies have been calling on banks to introduce name verification, also known as payee confirmation, since 2020, but so far the banks have refused to do so.
“The introduction of payee confirmation in the UK has significantly reduced payment diversion scams,” said Ms Rickard.
“People are losing hundreds of millions of dollars, the technology is available [to stop this] and we would like to see it introduced as soon as possible.”
What will 2022 look like?
Early numbers suggest losses will double again this year, Ms Rickard said.
Reported losses to Scamwatch are already approaching the 2021 total.
Brian’s loss of $38,700 is part of that figure for 2022.
The retiree from Albany in Western Australia was scammed a few weeks ago and has already sold a much-loved Commodore to restore bank balance.
“I’ve worked all my life to have this beautiful car,” he said.
“And now I don’t have it anymore.
“I’m completely ashamed of everything that happened to me.”
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