‘Alarming’ tactics see scam losses surge to $3.1bn

Losses from scams leaped 80 per cent to $3.1 billion last year with a total over 500,000 reports across Scamwatch and other government agencies, and the criminals are getting smarter the ACCC says.

Investment scams accounted for almost half the total, $1.5 billion, the Targeting Scams 2022 report revealed, followed by remote access scams with $229 million lost and payment redirection scams at $224 million.

“We have seen alarming new tactics emerge which make scams incredibly difficult to detect. This includes everything from impersonating official phone numbers, email addresses and websites of legitimate organisations to scam texts that appear in the same conversation thread as genuine messages. This means now more than ever, anyone can fall victim to a scam,” said ACCC deputy chair Catriona Lowe.

“There has been an explosion of reported losses to phishing scams in the past year, such as ‘Hi Mum’ and Toll/Linkt text scams, which skyrocketed by 469 per cent to $24.6 million in 2022.”

Text messages surpassed phone calls as the most reported contact method in 2022, with 79,835 people receiving scam text messages, an increase of 18.8 per cent based on the reports received by Scamwatch.

Reports about scam calls decreased 55.9 per cent to 63,821 but still accounted for the highest reported losses.

Phishing scams remain the most reported scam, with Scamwatch receiving 74,573 alerts.

Imposter bond scams and initial public offering scams were some of the emerging trends in 2022, which involve scammers impersonating companies or financial service providers were some of the emerging trends.

“These scams have become more sophisticated and can result in people losing money even when they do their own research,” the report said.

“The scammers will demonstrate specialised financial knowledge, provide convincing documents, fake websites, and fake information on review platforms.”

Investment scams involving money recovery services have also increased.

“Some of these are follow up scams that target people who have already lost money to a scam,” the report stated.

“Others are businesses that often charge large amounts of money on the basis that they will get money back for victims with most scam victims unable to recover funds.”

Scammers are evolving quickly and using new technology to lure and deceive victims.

The businesses losing money

The Australian business community is also seeing a significant increase in losses to scams, with losses rising 73 per cent to $23.2 million.

Micro businesses with up to four employees were the worst hit, reporting a total of $8 million in losses, a 128.6 per cent increase from the previous year.

The Targeting Scams report indicated across small and micro businesses overall, total scam losses increased 95 per cent to $13.7 million in 2022.

Large companies with over 200 employees reported the smallest amount in losses at $980,000. This was still a 132.8 per cent increase from the year before.

Medium-size enterprises with between 20 to 199 employees was the only category that saw a reduction in scam losses in 2022, with losses falling 13.5 per cent down to $3.6 million.

NSW and Queensland were the worst affected states, with businesses losing $6.5 million and $6 million in total in each state, respectively.

The most common business related scams were payment redirection or business email compromise where scammers compromise the business email, either through hacking or by impersonating the businesses email.

“They alter invoices or requests for payment by changing the bank account details. Many of these are reported to Scamwatch as false billing scams,” the Scamwatch report said.

All business sectors are being impacted by scams but the typical targets have historically been high transaction industries such as real estate conveyancing firms or the construction industry.

The luxury travel industry was also targeted heavily in 2022 with international travel reopening after the COVID-19 border closures.

Further reform needed

The ACCC said a more coordinated effort is required across government, the private sector and law enforcement to combat scams.

“Businesses need to be vigilant and implement effective monitoring and intervention processes to prevent scammers using their services and stop them when they do. Identity, verification and communication processes need constant review as scammers constantly evolve,” the report stated.

“We need to arm consumers with the tools to give them the best chance to identify scams, whilst recognising that humans aren’t going to stop being human any time soon.”

The ACCC is calling on the government to adopt solutions implemented in other jurisdictions which could help to mitigate some of the scam losses in Australia.

“The UK bank initiative to match BSB and account number to the intended recipient is one example. The SMS SenderID registry in Singapore is another. Measures such as these help make systems safer,” it said.

“We are encouraged to see exploration of opportunities like these but there is more work to be done to ensure that scammers do not find the weakest links.”

The government made a commitment in 2021 to implement anti-scam measures and provided seed funding to the ACCC to establish a National Anti-Scam Centre.

“The Centre will bring together government, regulators, industry, and consumer groups to leverage our collective expertise to share intelligence, disrupt scams, empower consumers, and find real solutions to reduce the losses to scams. It will aim to integrate not duplicate existing efforts and build on them,” the Targeting Scams report said.

The ACCC said there is also an opportunity for businesses to lead the way by implementing meaningful change that has real and effective outcomes for Australians. Minimum standards will also be required to ensure that gaps between institutions, industries or regulators aren’t there to be exploited.

“We need solutions that stop scammers reaching consumers and makes it harder for them to get access to money from the bank accounts of ordinary Australians,” it stated.