Findings and discussion
As in previous years, a large proportion of survey respondents received consumer fraud invitations, with 98 percent receiving one in the 12 months prior to the survey. The most commonly received fraudulent invitations were those that used dishonest computer support centres, involved false winnings in lottery or prizes, or claimed to be from a legitimate business or organisation trying to obtain personal information (phishing fraud). These three fraudulent invitations were also the most common frauds experienced in the 2013 survey, although in that year invitations involving fraudulent prizes or lottery winnings were the most common.
Twenty-five percent of respondents disclosed that they had responded to a fraudulent invitation in the 12 months leading up to the survey. Responding could involve sending money or personal details (or both), or seeking further information. Five percent of respondents who had received a fraudulent invitation in the 12 months before completing the survey had sent personal details and/or passwords in response to the invitation and six percent sent money, with three percent disclosing they had sent personal details and experienced a financial loss. Some respondents suffered a financial loss and/or lost personal details to more than one fraudulent invitation. The percentage of people experiencing both a financial loss and losing personal details decreased from the 2013 survey (Jorna 2015).
The 2014 survey results relating how fraudulent invitations were delivered were consistent with findings from previous ACFT surveys (Hutchings & Jorna 2013; Jorna 2015), with email remaining the most common method. However, unsolicited telephone calls as a fraudulent invitation delivery method continued to gain popularity in the 2014 survey with 72 percent of respondents receiving an invitation via landline telephone—almost as high as the 75 percent who received an invitation via email last year. In 2013, the ACCC (ACCC 2014) found that the telephone had once again replaced email as the most common scam delivery method, with 52 percent of their scam-related contacts receiving a fraudulent invitation via telephone.
Since the ACFT started, the median financial loss reported in the surveys had been steadily declining until 2013, when the median reported loss rose to $2,100. In 2014 the median financial loss decreased to $900, which, aside from 2013, was still higher than other reported losses since 2010. The reason for the decrease between 2013 and 2014 is that fewer respondents identified as victims who suffered a financial loss, and the amounts reportedly lost in the 2014 survey were much lower than those reported in 2013.
Once again, the fraudulent invitation that resulted in the highest losses experienced by victims was not one of the most common invitations received. Fraudulent invitations involving dating and social network frauds were again the most costly, with victims losing more than $104,000 to those frauds alone. The total financial impact of frauds experienced in the 2014 survey was more than $230,700, with dating and social network fraudulent invitations making up 45 percent of those losses. The only fraudulent invitation type that did not result in at least one self-identified victim was the fake inheritance scheme. All other fraudulent invitations resulted in at least one respondent identifying as a victim and suffering either a financial impact, loss of personal information or both.
Reporting fraudulent invitations to authorities has traditionally been low (Hutchings & Lindley 2012, Jorna & Hutchings 2013). However, the percentage of victims who reported the fraud to police increased to 31 percent in the 2014 survey. One reason may be the recent establishment of the Australian Cybercrime Online Reporting Network (ACORN)—a national online system that allows the public to securely report instances of cybercrime, and advises on how to recognise and avoid common types of this crime (ACORN 2015). Substantial media attention to the reporting system prior to ACORN’s official launch may have influenced victims’ reporting behaviour. That said, the percentage of victims of fraudulent invitations reporting to the ACCC’s SCAMwatch was the same as those reporting to police—31 percent. This indicates that SCAMwatch still provides a valuable resource for educating consumer fraud victims on how to avoid fraudulent invitations and where assistance is available.
In the 2014 survey, nine respondents (10% of all victims) were identified as victims who did not report the victimisation to anyone, including friends or family. The most frequently cited reason for not reporting a fraudulent invitation was not knowing which agency to contact. It is hoped that the introduction of ACORN and the continuing success of SCAMwatch will ease this confusion, and that the impact of these important self-reporting services will be seen in future ACFT surveys.
Even if a person is not a victim of a fraudulent invitation they should report the type of invitation and how it was received to SCAMwatch or consumer protection agencies. This is important as it allows agencies to improve their knowledge and understanding of the types of frauds that are affecting the public. Reporting also helps them to develop awareness and education programs to reduce the level of victimisation. It can also guide the allocation of resources to combat or disrupt frauds. Overall, reporting rates of fraudulent invitations are increasing, and when respondents did report an invitation, the most frequent reasons for doing so were to prevent others from becoming a victim of the fraud, and because they knew it was the right thing to do. These top two reasons for reporting a fraudulent invitation were the same as those reported in the 2013 survey and continue to demonstrate that the key requirement to reducing the impact of consumer fraud is education in a variety of different formats.
The theme of the 2015 National Consumer Fraud Week was Get smarter with your data. The week was designed to raise awareness of consumer fraud and the need to protect individuals against fraudulent invitations, with a focus on protecting personal details and passwords. Phishing is the act of pretending to be a legitimate business or organisation and trying to obtain personal information or account details through emails or websites that may appear legitimate (Hutchings & Hayes 2009). Phishing invitations have been identified (Smith & Hutchings 2014) as one of the most successful means of dishonestly obtaining personal information that may be used to commit further identity crimes.
In the 2014 survey, 41 respondents (47% of those who were characterised as victims) sent personal details or passwords as a result of a fraudulent invitation. Twenty (4% of those who received an invitation of that nature) were victims of a phishing fraud. Two victims suffered a financial loss as a result of a phishing invitation and 17 victims lost personal information or passwords to fraudsters. One respondent suffered both a financial loss and lost personal data. Victims of phishing invitations were aged between 18 and over 65 years, with only those under 17 years not falling victim to fraudulent invitations of that nature. Email was the most common means of delivering phishing invitations.
Suggestions for future campaigns
Suggested themes for future education and awareness campaigns include a focus on:
- how people react to receiving fraudulent invitations. Developing a greater understanding of how people react to fraudulent invitations—for example, determining if they change their behaviour while using social networking sites of buying and selling products online to avoid the risk of victimisation or whether they choose to ignore potential risks. The 2014 survey found that 220 participants responded in some way to a fraudulent invitation by requesting further information or sending money and/or personal details. Future campaigns could examine why people respond, what would reduce the likelihood of their responding and how their behaviour online changes after recognising a fraud; and
- educating the public on common themes used in fraudulent invitations. The 2014 survey identified victims of multiple fraudulent invitations who lost money or personal data to more than one consumer fraud. Greater education on the common themes used in fraudulent invitations would be valuable in helping the public to recognise a fraud, and particularly useful in reducing the number of victims of multiple consumer frauds.