The Australasian Consumer Fraud Taskforce (ACFT) is a group of 22 government regulatory agencies and departments in Australia and New Zealand. It works with private sector, community and non-government partners to prevent fraud. The ACFT has run a range of fraud prevention and awareness-raising activities since 2005. One of its key initiatives is to run an annual consumer fraud survey to take a snapshot of the public’s exposure to consumer fraud and fraudulent invitations, to assess their impact, determine how victims respond, and identify emerging typologies and issues. The Australian Institute of Criminology (AIC), as a taskforce member and chair of its research subgroup, hosts the survey on behalf of the ACFT. It should be noted that the survey participants were not randomly sampled and so survey findings are not representative of the general population.
This report presents the results of the 2014 survey, which ran for six months from 1 January 2014. This period encompassed National Fraud Prevention week, which coincides with global fraud awareness-raising activities. The theme of the 2014 campaign was Know who you’re dealing with, and it was aimed at raising awareness about relationship scams by asking people to think twice before transferring money to people they did not know personally.
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 (fraudulent lottery invitations);
- a request for assistance to transfer money out of another country, such as Nigeria (advance fee frauds);
- a notification of an inheritance (fraudulent invitations about inheritances);
- a request by a business to confirm personal details or passwords (phishing);
- a request to buy, sell or retain securities or other investments (fraudulent boiler-room invitations);
- a request to supply financial advice (fraudulent financial advice invitations);
- an opportunity to work from home (a fraudulent invitation to earn large sums of money by working from home);
- a person representing themselves as someone from a computer support centre to ‘fix’ their computer (fraudulent computer support centre invitations);
- pursuing a personal relationship that turned out to be false (fraudulent dating or social networking invitations); and
- other fraud types.
The survey could be completed on the AIC’s website. Participants not living in Australia or New Zealand were excluded, as were invalid responses. In 2014, 879 participants completed the survey. Excluding participants from overseas, 865 responses were available for analysis.
The findings of the 2014 survey cannot be taken as representative of the experiences of the greater Australasian population, given the self-selected, online sampling used in the survey design. As the sample was not randomly selected, those who participated may have differed from the general population in terms of their experience of consumer fraud. The results do, however, reflect the experiences of a large sample of individuals from across Australia and New Zealand.
Delivery of fraudulent invitations
The 2014 survey asked respondents about the types of fraudulent invitations they had received, as well as how the invitations had been delivered to them. Results indicated that:
- 98 percent of respondents reported having received at least one fraudulent invitation in the 12 months preceding the survey;
- the most common type of fraudulent invitation received was computer support centre fraud (received by 63% of the total sample), fraudulent lottery invitation (61%) and phishing schemes (55%);
- the least common type of fraudulent invitation received was the boiler-room invitation, which was reported by just six percent of the total sample; and
- email was the most common delivery method, with 77 percent of those who received a fraudulent invitation reporting that they had received it via email.
Responding to fraudulent invitations
Responding to fraudulent invitations included requesting further information, providing personal details and/or passwords or suffering a financial loss. Key findings included:
- 25 percent of survey participants responded in some way to a fraudulent invitation in the 12 months preceding the survey;
- five percent of respondents (who received an invitation in the 12 months prior to the survey) sent personal details or passwords as a result of the invitation;
- six percent of respondents reported sending money as a result of a fraudulent invitation in the 12 months preceding the survey;
- three percent of respondents reported both sending their personal details and having experienced a financial loss;
- eighteen respondents suffered a financial loss and sent personal details to multiple fraudulent invitations in the 12 months preceding the survey;
- the median amount reported lost to fraudulent invitations was $900, with a total financial loss of $230,707.75. This is the lowest loss amount reported since the AIC began the surveys; and
- the top two reasons for not responding to a fraudulent invitation were that the respondent had received similar offers before and thought they were fraudulent (51% of the total sample) and ‘had seen/heard this was a type of fraud in the media or from a public source’ (48% of the total sample).
Victims were defined as respondents who had provided their personal details and/or suffered a financial loss as the result of replying to a fraudulent invitation. Analysis of the demographic variables of the victims indicated that:
- of the survey respondents who disclosed their gender (98% of respondents disclosed their gender) 67 percent of respondents who experienced victimisation (n=88 victims) were female and 33 percent were male;
- in 2014, the age category that reported the highest percentage of victimisation was ‘over 65’ years (13% of total respondents within that age category); and
- in 2014, individuals earning between $20,000 and $40,000 a year reported the highest percentage of victimisation (16% of total respondents in that income category). This does not include the ‘I’d rather not say’ category.
Reporting consumer fraud
Respondents were asked whether they had reported consumer fraud incidents to another person or organisation. Key findings included:
- in 2014, 73 percent of the total sample (75% of those who received a fraudulent invitation) reported a fraudulent invitation to at least one person or organisation;
- family and friends were the most common recipients of fraud complaints, with 51 percent of the total sample reporting to this category in 2014;
- the most common reasons for reporting fraudulent invitations were ‘wanted to prevent others from being scammed’ (33% of the total sample), and ‘knew it was the right thing to do’ (22% of the total sample); and
- the most common reasons provided for not reporting fraudulent invitations were ‘unsure of which agency to contact’ (37% of the total sample), ‘I didn’t think anything would be done’ (32% of the total sample), and ‘not worth the effort’ (29% of the total sample).
Perceptions of consumer fraud
Respondents were asked whether they considered each fraudulent invitation type to be a crime, wrong but not a crime, or just something that happens. The results indicated that:
- in 2014, the top three fraudulent invitation types to be considered a crime by respondents were exactly the same as those reported in the 2013 survey, namely, advance fee fraud (84%), phishing (82%) and computer support fraud (76%).
Protecting personal information
The theme of the 2015 National Consumer Fraud Week was: Get smarter with your data. The focus of the week was to raise awareness of consumer fraud and the need for individuals to protect themselves against fraudulent invitations, with a focus on protecting personal details and passwords. With that theme in mind the 2014 survey participants who had been exposed to or victimised as a result of fraudulent invitations, especially phishing and similar frauds, were reviewed. It was reported that:
- forty-one respondents (47% of victims in the sample) sent personal information or passwords as a result of a fraudulent invitation;
- email and the telephone were the most common methods of delivery of fraudulent invitations received by victims who lost personal details as a result of the fraud; and
- thirty-four percent of respondents who had received a phishing invitation reported the invitation to an organisation or a statutory authority.
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:
- how people react to receiving fraudulent invitations. Future campaigns could examine why people respond to invitations, what would reduce the likelihood of their responding, and how their online behaviour changes after recognising a fraud; and
- educating the public on common themes used in fraudulent invitations. The 2014 survey identified quite a few respondents who were the victims of multiple different fraudulent invitations. An awareness campaign that identified elements common to most frauds could help people to better understand the deception involved with frauds and inform the development of more targeted prevention initiatives.