Australian Institute of Criminology

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Executive summary

The Australasian Consumer Fraud Taskforce (ACFT) includes 22 government regulatory agencies and departments in Australia and New Zealand that work alongside private sector, community and non-government partners to prevent fraud. The ACFT has conducted a range of fraud prevention and awareness-raising activities since 2006. One key activity of the ACFT is to hold an annual consumer fraud survey to obtain a snapshot of the public’s exposure to consumer fraud/scams, to assess their impact, to determine how victims respond and to identify emerging typologies and issues. The Australian Institute of Criminology (AIC) as a member of the ACFT and chair of the research subgroup hosts the survey on behalf of the ACFT. It should be noted that as the survey participants were not randomly sampled, the survey findings are therefore not representative of the general population.

This report presents the results of the 2013 survey, which ran for six months commencing from 1 January. This period encompassed the National Fraud Prevention week, which coincides with global awareness-raising activities. The theme of the 2013 campaign was ‘Outsmart the scammers’, which aimed to raise awareness about consumer fraud risks while shopping online. The survey explored consumer fraud where respondents were contacted by phone, SMS, email, letter, via the internet and/or in person by someone who they did not know in relation to:

  • having won a lottery or some other prize (lottery scams);
  • a request for assistance to transfer money out of another country (such as Nigeria) (advance fee frauds);
  • a notification of an inheritance (inheritance scams);
  • a request by a business to confirm your personal details or passwords (phishing scams);
  • a request to supply you with financial advice (financial advice scams);
  • a request to buy, sell or retain securities or other investments (boiler-room scams);
  • an opportunity to work from home (a front for money laundering) (work from home scams);
  • pursuing a personal relationship that turned out to be false (dating scams);
  • a person representing themselves as someone from a computer support centre (computer support scams); and
  • other fraud types.

The survey was made available for completion on the AIC’s website. Participants who did not reside in Australia or New Zealand were excluded from the survey, as were invalid responses. In 2013, 1,059 participants completed the survey. Outliers, typically very large loss figures from respondents who appeared to have misunderstood the question, were removed for the analysis, which left 1,034 responses for analysis.

The 2013 survey suffered from a number of constraints, which meant that comparisons with previous years were not possible. These constraints included a change in the reporting time period and structural changes in the survey. There are also additional limitations with the survey that make it difficult to generalise its findings to the greater Australasian population, particularly the self-selection bias of the survey design. As the sample was not randomly selected, those who participated in the survey may differ from the general population in terms of their experience of scams.

Delivery of scams

The 2013 survey asked respondents about the types of scams they had received, as well as how the scam invitations had been delivered to them. Results indicated that:

  • Ninety-seven percent of respondents reported having received at least one scam invitation in the 12 months preceding the survey.
  • The most common type of scams reported to have been received were lottery scams (received by 69% of the total sample), computer support centre scams (58%) and phishing scams (52%).
  • The least common type of scams received were boiler-room scams, reported by 11 percent of the total sample.
  • Email was the most common scam delivery method, with 78 percent of the sample reporting having received a scam this way.

Responding to scam invitations

Responding to scam invitations included requesting further information, providing personal details or suffering a financial loss. Key findings included:

  • Thirty-four percent of the respondents responded in some way to a scam invitation in the 12 months preceding the survey.
  • Six percent in sent their personal details.
  • Four percent of respondents reported a financial loss.
  • Seven percent reported both sending their personal details and having experienced a financial loss.
  • The median amount reported lost to scams was $2,150. With outliers removed, a total financial loss of $1,110,106 was reported.
  • The top two reasons given for not responding to scam invitations were that the respondent had received similar offers before and thought they were scams (54.2% of the total sample) and ‘had seen/heard this was a type of scam in the media or from a public source’ (50.6% of the total sample).

Victim demographics

Victims were defined as respondents who had provided their personal details and/or suffered a financial loss as the result of replying to a scam invitation. Analysis of the demographic variables of scam victims indicated that:

  • Of the survey respondents who disclosed their gender (98%), 16.1 percent of respondents experiencing victimisation in 2013 were females and 12.9 percent were male.
  • In 2013, the age category that reported the highest percentage of victimisation was ‘over 65’ years (22% of total respondents within that age category).
  • In 2013, the income category that reported the highest percentage of victimisation was $20,000 to less than $40,000 (26% of total respondents within that income category).

Reporting consumer fraud

Respondents were asked whether they had reported consumer fraud incidents to another person or organisation. Key findings included:

  • In 2013, 74 percent of the total sample reported a scam to at least one person or organisation.
  • Family and friends were the most common recipients of scam complaints, with 43 percent of the total sample reporting to this category in 2013.
  • The most common reasons provided for not reporting scams were ‘unsure of which agency to contact’ (40% of the total sample), ‘I didn’t think anything would be done’ (32%) and ‘not worth the effort’ (29%).
  • The most common reasons for reporting scams were ‘wanted to prevent others from being scammed’ (39% of the total sample), ‘knew it was the right thing to do’ (28%) and ‘to assist in the investigation of an offence’ (26%).

Perceptions of consumer fraud

Respondents were asked whether they considered each scam type to be a crime, wrong but not a crime, or just something that happens. The results indicated that:

  • In 2013, the top three scam types to be considered a crime by respondents were advance fee fraud (85%), phishing (85%) and computer support scams (80%).

Recommendations for future campaigns

The report findings were used to develop recommendations for future education and awareness campaigns. It was suggested that future campaigns should focus on:

  • developing a greater understanding of the consequences of consumer fraud, not just the financial impact, but the psycho-social aspects and the lasting effects that falling victim to a scam may have;
  • changing the perception that scams (a type of consumer fraud) are not victimless crimes and victims are not necessarily gullible, greedy or doing something illegal;
  • educating the public on what to do if they have been the victim of a scam or if they are receiving a large amount of scam invitations. The survey has continually found that respondents are unaware of to whom they should report consumer fraud.