The latest Targeting Scams report has revealed Australians lost a record $3.1 billion to scams in 2022, with investment scams the highest loss category.
The report compiled data reported by a number of government agencies, such as the Australian Competition and Consumer Commission (ACCC) Scamwatch, the Australian Financial Crimes Exchange (AFCX), and IDCARE.
With $3.1 billion lost last year, it marked an 80 per cent increase from 2021.
Investment scams comprised $1.5 billion of the total losses and there were over 9,360 reports to Scamwatch regarding investment scams, with reported losses increasing 112 per cent to over $377 million.
The average investment scam victim was likely to be a man, aged 65 or over, and living in NSW, Scamwatch said. He would meet the scammer on social media or respond to a scam advertisement and have contact by phone. He was likely to be in the scam for several months and pay the scammer via cryptocurrency or bank transfer.
By gender, men lost $190 million in investment scams while women lost $123 million.
Overall scam reports to Scamwatch fell by 16.5 per cent; however, the losses experienced by each victim rose by more than 50 per cent to an average of almost $20,000.
Addressing scams had been an important part of Financial Services Minister Stephen Jones’ agenda in the last year, with some $10 million in funding committed to the ACCC towards the establishment of a National Anti-Scams Centre.
Jones had also described scams as “a menace” and “a destructive force” in the economy.
Social media
The report noted there had been a 32 per cent increase in reports about investment scams on social media and a 43 per cent increase in reported losses from social media to $80.2 million.
Catriona Lowe, ACCC deputy chair, said: “We have seen alarming new tactics emerge, which make scams incredibly difficult to detect,” Lowe said.
“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.
“Scammers are the most opportunistic of all criminals. Unfortunately, the more information a scammer has about you, the more convincing they can be,” Lowe said.
In March 2023, an international task force co-chaired by the Australian Securities and Investments Commission (ASIC) and the Central Bank of Ireland, had noted inappropriate online marketing and finfluencer activity exacerbated retail conduct issues and vulnerabilities.
They were also identified as a “driving force” behind crypto and tech-based scams.
Last week, finfluencer Tyson Scholz was found by the Federal Court to have contravened the Corporations Act in December 2022 and received a permanent injunction from ASIC.
Diversity
Concerningly, the data also found that people from culturally and linguistically diverse communities were significantly over-represented in terms of financial losses across a range of scam types.
They lost $29.7 million in investment scams, up 45 per cent from 2021, with a median loss of $13,000.
They also accounted for over a quarter (27.9 per cent) of total losses associated with identity theft and about a third (32.7 per cent) of all losses to pyramid schemes. Losses related to pyramid schemes, in particular, were up over 380 per cent in this demographic.
Indigenous respondents lost $2.5 million in investment scams, a 63 per cent increase, with a median loss of $4,000.
“This is a worrying trend that urgently needs to be addressed by both government and industry with input from consumer advocacy groups,” Lowe added.
I bet politicians and regulators would love to levy financial advisors to remediate this.