Scams double amidst evolving technology

A new report by the Australian Competition and Consumer Commission reveals scam-related reports more than doubled from 2009 to 2010, with online scams soaring.

The ACCC’s annual report on consumer fraud, titled Targeting Scams, shows 42,000 scam-related reports were made in 2010 compared to around 20,000 in 2009.

According to the report, 16% of consumers and small businesses who reported scams to the ACCC in 2010 suffered monetary losses of up to several million dollars.

Although scam reports to the ACCC increased in 2010, the amount reported lost was $63 million, down from the 2009 figure.

Online scams remained the largest method of delivery, with the figure rising from 14,000 in 2009 to more than 19,000 in 2010.

There was also a notable increase in scams initiated by telephone, which grew from around 2,000 in 2009 to more than 14,000 in 2010.

ACCC deputy chair Peter Kell said in a statement it appears that many of these calls may have originated offshore, and it is likely scammers are taking advantage of cheap or free voice-over-internet services.

“The increasing popularity of inexpensive voice-over-internet services is a likely cause of the 23.5% increase in scams delivered by phone compared to 2009,” he said.

Kell said 2010 also saw an increase in scams impersonating government departments or major businesses, with the use of logos and language that look and sound genuine.

“Scammers will continue to masquerade as well-known government agencies or large global corporate entities,” he said.

The Australian Bankers’ Association says people should beware of hoax emails purporting to be from their bank, asking them to update their personal information.

“Your bank will never email you to ask you for this confidential information,” ABA chief executive Steven Münchenberg says.

“Consumers should also be aware of websites that ask for these details. These will often re-direct you to a replica of your bank’s website. Such websites are set up by fraudsters to steal the customer’s information.”

According to the ASIC report, the top scams most commonly reported to the ACCC in 2010 included advanced fee or upfront payment; computer hacking; false billing, banking and online accounts; and jobs and employment including business opportunities.

“In 2010, computer hacking became the third most commonly reported scam type [after advanced fee/upfront payment, and online and auction shopping] due to the emergence of a non-traditional hacking scam in which scammers use telemarketing calls to request remote access to the consumer’s computer,” the report says.

The ACCC says while the findings are alarming, it believes more consumers and small businesses are now willing to report scams, allowing the ACCC to issue more timely warnings.

“One challenge in 2010 was the continual evolution in the use of technologies by cyber criminals and scam operators,” the ACCC says.

According to Kell, the evolving nature of scams will continue to be a major challenge for the regulator.

“As seen in 2010, technological advances can open up new avenues for scam approaches as well as the resurgence of approaches which were, until recently, considered old-style,” he says.

“The ways new technologies can be abused by scammers can be difficult to predict and this will continue to pose significant challenges for regulators.”

Kell says the ACCC will focus on unsolicited telephone scams in 2011 given the major growth in this activity in the second half of 2010.

“The ACCC will continue to expand its collaboration with overseas regulators to confront the challenges of taking enforcement action against scammers who are often hard to trace or located in overseas jurisdictions,” he says.