The purpose of this paper is to report the findings from the Australasian Consumer Fraud Taskforce (ACFT) 2014 survey to provide an overall picture of the nature of consumer fraud in Australasia.
Australasian Consumer Fraud Taskforce
The ACFT, chaired by the Australian Competition and Consumer Commission (ACCC), was formed in March 2005. It is made up of 22 Australian and New Zealand governmental regulatory agencies and departments responsible for consumer protection regarding frauds and scams, including consumer protection and policing agencies at the state and federal levels. The taskforce also has a range of partners from the community, non-government and private sectors with an interest in increasing the level of fraud awareness in the community. The aim of the ACFT is to take a coordinated approach to reducing the number of incidents, and the impact of consumer frauds and scams. Each year the taskforce coordinates a week-long information campaign, timed to coincide with global consumer fraud prevention activities.
The Australian Institute of Criminology (AIC) has conducted an annual survey to assess consumer fraud experiences since 2006. See Smith (2007) for the results of the pilot study conducted in 2006, Smith and Akman (2008) for the 2007 survey results, Budd and Anderson (2011) for the results of the 2008 and 2009 surveys, Hutchings and Lindley (2012) for the 2010 and 2011 survey results, Jorna and Hutchings (2013) for the 2012 survey results and Jorna (2015) for the results of the 2013 survey. The survey reported in this paper ran for six months between January and June 2014, which included the taskforce’s annual fraud week.
Defining consumer fraud and fraudulent invitations
According to the Australian Bureau of Statistics (ABS), scams are defined as ‘a fraudulent invitation, request, notification or offer, designed to obtain someone’s personal information or money or otherwise to obtain a financial benefit by deceptive means’ (ABS 2012: np). While the terms ‘fraud’ and ‘scam’ are often used interchangeably, scams are generally considered to be a fraud category, with fraud referring to matters involving dishonesty and deception. A range of consumer fraud activities may be classified as fraudulent invitations. Nine common types of consumer frauds were explored in the 2014 ACFT survey namely: advance fee fraud, dating schemes, financial advice fraud, boiler-room fraudulent invitations, inheritance schemes, lottery fraud, phishing, work from home schemes, and fraud involving computer support. An additional ‘other’ category was offered to respondents for fraud types that did not fall into the supplied categories. Definitions for these fraudulent invitations are provided in Table 1. Consumer frauds target individuals and consumers, rather than businesses or governments (Budd & Anderson 2011).
|Fraudulent money transfers||Advance fee frauds have existed throughout history and have adapted to advances in technology. Generally, these frauds are communicated by email or letter and seek help to transfer a large amount of money overseas. These are the most commonly complained about frauds in Australia, according to the ACCC.|
|Dating/social networking schemes||Dating and social networking schemes may exist through illegitimate or legitimate dating or social networking websites and may require payment for each email sent and received by a potential match. Alternatively, fraudsters may hook victims by claiming to have a sick relative or severe financial trouble and seeking assistance. Due to the trust already established, victims may be more easily duped and are often shocked when fraudsters no longer communicate after money has been sent.|
|Fraudulent financial advice||Fraudulent financial advice schemes are offered by fraudsters cold-calling from overseas and sharing advice on shares, mortgage or real estate ‘investments’, ‘high-return’ schemes, option trading or foreign currency trading. The advice generally does not lead to increased wealth.|
|Boiler-room or investment fraud||Requests to buy, sell or retain securities or other investments (including superannuation investments) that are usually offered through cold-calling by fraudsters who seek to sell worthless shares or investments to recipients.|
|Inheritance frauds||Inheritance frauds are usually sent by a lawyer or bank purporting to act for a deceased estate and may falsely claim that a distant relative has died and through some means has left the victim a large inheritance.|
|Lottery fraud||A lottery fraud may be delivered by email, text message or pop-up screen falsely claiming the victim has won a prize or competition.|
|Phishing||Phishing refers to emails that trick people into giving out their personal details and banking information. They are increasingly also sent by SMS.|
|Work from home fraudulent invitations||Working from home frauds are often promoted through spam emails or advertisements on noticeboards, however they are generally not advertising real jobs. Working from home frauds may be fronts for illegal money-laundering activities or pyramid schemes.|
|A person representing themselves as someone from a computer support centre||Computer support centre fraud occurs when recipients receive mainly telephone calls from fraudsters claiming they are from well-known computer manufacturers or businesses that can fix problems with the recipients’ computers. Fraudsters may ask for money, personal details or passwords or seek to sell worthless products to fix computers.|