SCAMMERS have capitalised on the cryptocurrency and fidget spinner crazes, a report reveals.
Cryptocurrency-related scams were last year responsible for more than $2.1 million worth of reported losses, according to the Australian Competition and Consumer Commission.
But the consumer watchdog believes it’s “likely the very tip of the iceberg.”
“Examples of cryptocurrency scams in 2017 include fake ‘initial coin offerings’ which, like initial stock offerings, purport to be the launch of a new cryptocurrency,” the ACCC’s Targeting scams report said.
“Others capitalised on the general confusion about how cryptocurrency works and instead of people discovering how to directly buy cryptocurrencies, many found themselves caught up in what were essentially pyramid schemes.”
Scamwatch received almost 33,000 reports in 2017 of scammers impersonating government agencies, or trusted businesses like Telstra and Australia Post, and making threats. Always stop & check #IsThisForReal. For more info https://t.co/yNnvM724U5#ScamsWeek18pic.twitter.com/lEIQLAyFzv— Scamwatch_gov_au (@Scamwatch_gov) May 21, 2018
Some victims found themselves involved in cryptocurrency-based fraud after being convinced by friends and family they were ‘onto a good thing” – something the report identified as “a classic element of pyramid schemes”.
Scams related to digital currency increased in the last quarter of the year, as cryptocurrency speculation became more popular.
The ACCC also received reports of people falling victim to fake offers for fidget spinner toys.
“Scamwatch data revealed that shoes and the must-have toy of 2017, the fidget spinner, were the two most commonly reported items victims were trying to buy from online shopping scams,” the Targeting scams report stated.
More than half of reported scam losses were for sums of less than $500 last year.
Yet, there were more than 3000 reported scams in which victims lost between $1000 – $9999.
What were the most popular forms of scams in 2017?
Investment scams overtook dating and romance scams as the most costly category of fraudulent activity, accounting for losses of $64 million and $42 million respectively.
“Offshore cold-calling is the most common type of investment scam, where a compelling investment offer is delivered by someone who will then back up the pitch with a slick website, fake research and insistent follow-up calls,’ ASIC deputy chair Peter Kell said.
“In one case reported to ASIC a retired widow invested $450,000 in overseas listed companies before a relative became aware of the story and alerted ASIC.
“In another case a woman lost her life savings after dealing with an offshore investment broker who was introduced by a close friend. The best defence against these scams is simply to hang up.”
How much money are we losing to scams?
Reported losses to scams amounted to a total of $340 million in 2017 – $40 million more than the year prior, and a record high.
“It’s very worrying that Australians are losing such extraordinary amounts to scammers,” ACCC deputy chair Delia Rickard said.
“Based on just the reports provided to the ACCC, victims are losing an average of $6500. In some cases people have lost more than $1 million.”
She said some scams were becoming sophisticated and hard to spot.
“Scammers use modern technology like social media to contact and deceive their victims,” Ms Rickard said.
“In the past few years, reports indicate scammers are using aggressive techniques both over the phone and online.”
How can we avoid being scammed?
The state government launched a campaign last week to help inform Victorians about scams.
Education sessions are to be delivered by Consumer Affairs Victoria and Crime Stoppers Victoria at Victorian libraries.
Meanwhile, Ms Rickard advised people to ask themselves if the information presented by scammers made sense.
“The Australian Taxation Office will never threaten you with immediate arrest; Telstra will never need to access your computer to ‘fix’ a problem; and Centrelink will never require a fee to pay money it owes you. Finally, none of these organisations will ask you to pay using iTunes gift cards,” Ms Rickard said.
“If something doesn’t feel right, hang up the phone or hit delete.
“If the person said they were, for example, from Telstra or the ATO, find the phone number for that organisation online or in the phone book, call them and let them know about the call you received. They’ll let you know if it’s genuine or a scam.”
She encouraged people to visit www.scamwatch.gov.au to report scams so the ACCC could warn others about them and learn more about what to do if they were targeted by scams.
Ms Rickard said people could follow @scamwatch_gov on Twitter and subscribe to Scamwatch radar alerts to keep up to date with advice for avoiding the latest scams affecting the community.