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New Report Reveals the Types of Online Scams that are Defrauding Australians of Over $8.5 Billion

Melbourne, Victoria,  Australia (News4us.com) March 08, 2011

New Report Reveals the Types of Online Scams that are Defrauding Australians of Over $8.5 Billion

New Report Reveals the Types of Online Scams that are Defrauding Australians of Over $8.5 Billion

The Minister for Justice Brendan O’Connor today launched a new report that reveals the types of online scams that are defrauding Australians of their hard earned cash.

The Minister will release the biennial analysis of the Consumer Fraud Online Surveys by the Australian Institute of Criminology at the Australasian Consumer Fraud Taskforce Agency Forum in Melbourne today.

“Online scams can deprive people of serious amounts of money, but they can also result in identity theft, which can have devastating effects on a person’s financial future.

“This week is Consumer Fraud Week and there’s no better time to learn about how to avoid online scams to protect your money and your identity,” Mr O’Connor said.

“The estimated cost of fraud in Australia is more than $8.5 billion – making it the most costly of all crime types,” he said.

“The ever-evolving nature of the Internet and the ease and low cost of sending invitations by social networking, email and SMS is creating attractive new avenues for criminals.”

The Consumer Fraud in Australasia report analyses results from the latest available surveys from 2008 and 2009.

The results show that invitations sent by email remained the most common scam method. Lottery scams attracted the highest number of victims in 2008, while ‘work from home’ scams were most common in 2009.

“What’s most concerning from a law enforcement perspective is that this report warns that ‘work from home’ scams are increasingly being used by organised crime groups to launder money.

“That means that by unwittingly engaging in such scams members of the public are being turned into money mules and are exposed to criminal charges themselves,” Mr O’Connor said.

The report also highlights the stigma associated with being scammed, a factor that may be responsible for low reporting rates, especially amongst consumers on high incomes, or in the 25-35 age bracket.

The Parliamentary Secretary for Treasury David Bradbury said education is the key.

“The best way to make sure you don’t fall for a scam – or avoid falling for one again – is to be informed about what to look out for and maintain a suspicious mind when you are online,” Mr Bradbury said.

“The surveys show that knowledge of a scam, such as receiving similar offers in the past or being made aware of the scam through the media, were key factors in avoiding falling victim.”

Scamwatch is a wealth of information about scams and offers these golden rules (www.scamwatch.gov.au):

• If it looks too good to be true – it probably is

• Never send money or give credit card or online account details to anyone you do not know and trust

• Always get independent advice if significant money, time or commitment is involved

• Remember there are no get rich quick schemes – the only people who make money are the scammers

• Do not agree to offers or deals straight away

• Contact the ACCC, ASIC or your local Office of Fair Trading for help

• Check your bank account and credit card statements and report anomalies to your bank

• Keep your credit and bank cards safe. Do not share your PIN with anyone or keep a written copy with your card.

“Consumer fraud comes in many forms. It can include fraudsters selling a non-existent item that requires an advanced payment, persuading consumers to buy an unwanted product through deceptive marketing techniques or using someone else’s personal details for their own benefit.”

Common scam types in Australasia include:

• advance fee frauds (such as Nigerian or 419 scams)

• phishing (requesting personal data under false pretences)

• lottery and prize scams

• inheritance scams

• financial investment scams

• work from home scams

• dating and relationship scams.

As part of Consumer Fraud Awareness Week, the Australasian Consumer Fraud Taskforce is encouraging people to participate in this year’s confidential survey by visiting www.aic.gov.au.

“This information will form a snapshot of the public’s exposure to consumer scams and help to improve the prevention, detection, investigation and prosecution of consumer scams,” he said.

The Gillard Government also recently introduced new identity crime offences, which took effect last week:

• Up to five years jail for making, supplying or using identification information with the intention of committing a Commonwealth indictable offence

• Up to three years jail for possessing identification information with the intention of committing identity crime

• Up to three years jail for possessing equipment to make identification documentation with the intention of committing identity crime.

The legislation also helps victims to re-establish their identities more easily, by creating a Magistrate-issued certificate that states when a person’s identity information has been misused.

The full analysis titled Consumer Fraud in Australasia: Results of the Australasian Consumer Fraud Taskforce online Australia surveys 2008 and 2009 is available at www.aic.gov.au

 

 

ADDITIONAL KEY FINDINGS

 

Consumer fraud in Australasia: Results of the Australasian Consumer Fraud Taskforce online Australia surveys 2008 and 2009

The reported victimisation rates in both the 2008 (18%) and 2009 (17%) confidential surveys were higher than those found in similar surveys.

In both the 2008 and 2009 surveys, the main method of receiving a scam invitation was via email and the majority of people who received a scam invitation did not respond.

In 2008 it was found that the 45–54 year age group was less likely to respond to a scam; and the 55–64 year age group was more likely to respond to a scam.

It was also revealed that the 55–64 and 65+ year age groups were more likely to respond positively to lottery scams; and the 55–64 year age group was more likely to respond positively to advance fee frauds and personal information (or phishing) scams.

Work from home scams where a jobseeker becomes a ‘financial agent’ and opens a bank account to transfer money from overseas and into another account while receiving a ‘commission’ leaves the person open to prosecution for money laundering.

In phishing scams, 0.8% of phishing victims lost money to the scam and 7.4% lost personal information.

In 2009, those earning less than $20,000 per annum were more likely to send personal information to a scam; and those earning more than $80,000 per annum were less likely to send personal information to a scam.

Those earning over $80,000 a year were less likely to report a scam to family and friends than those earning less, while those earning less than $20,000 a year were more likely than respondents from other income brackets to report a scam to a formal agency (e.g. police, Australian Competition and Consumer Commission (ACCC)).

There was a statistically significant relationship between age and reporting; the 25–34 year age group was less likely than expected to report a scam to either a formal agency or family and friends; and the 55–64 year age group was more likely than expected to report a scam to either a formal agency or family and friends.

Respondents from Western Australia were less likely to respond to a scam; and respondents from Tasmania were more likely to respond to a scam.

The report recommends exploring activities aimed at raising awareness of scam types as this could be an effective way to reduce victimisation.


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