Australians were swindled out of a recorded $126 million through investment scams last year, with reported losses to a government agency surging by 59 per cent year-on-year.
Fraudulent investments caused the most losses in 2019 out of scams reported to government agency Scamwatch, according to new data released in the ACCC’s Targeting Scams report.
Australians had reported $61.8 million in losses to Scamwatch, an increase of 59 per cent from the year before. The category covered 43 per cent of all reported losses.
But as found by a Roy Morgan and ACCC survey, only around 13 per cent of victims make a report, which led the consumer watchdog to include losses reported to other agencies and the big four banks. The combined data captured $126 million being lost to fraudulent investment schemes.
Australians had lost more than $634 million to scams in total during the year, with there being more than 353,000 combined reports to Scamwatch, other government agencies and the big four banks.
ACCC deputy chair Delia Rickard said when Scamwatch reports are combined with partner data, losses total at $2.5 billion during the last 10 years.
“We know these numbers still vastly understate losses as around [one-third] of people don’t report scam losses to anyone and in the past far fewer scam reports to other agencies have been captured,” Ms Rickard said.
“Some of these scams can last for months, or even years, and can leave victims financially and emotionally devastated.”
Around two-fifths of people who had reported an investment scam lost money, with an average loss of $12,350.
Men were the most affected by investment scams, reporting losses of $44.7 million.
Investment scams also incurred the highest financial losses for Indigenous consumers, with losses topping $1.1 million.
The scams had included fake initial stock or coin offerings, brokerage services or an investment in expensive or online trading platforms.
Cryptocurrencies were reported to be common in investment scams, often being requested as a payment method.
Cryptocurrency investment scams were also noted to be now one of the most financially damaging scams for Australians – causing a “sharp increase in losses over the past two years”, with people losing more than $21 million.
Investment scams had risen by almost five times over the last five years, from a previous $12.5 million in 2014.
The number of reports had also risen, from 938 in 2014 to 5,005 in 2019.
Cloud mining farms were a common adaptation of the cryptocurrency scam, with most being Ponzi schemes involving no real cryptocurrency.
Although phone calls were the top contact method, scams originating on social media had increased by 20 per cent in 2019 and contacts via mobile apps had increased by 29 per cent.
“Over the last decade, scammers have taken advantage of new technologies and current scams are using social media apps and new payment methods that didn’t exist in 2009,” Ms Rickard said.
“In particular, a new trend with dating and romance scams is scammer contacting the victim on social media apps or games which are not designed for dating, so it’s important to be aware that scammers can target you anywhere.”
Common manipulation techniques including making exclusive offers to victims, or asking for small commitments, such as completing a survey, to make a person more likely to comply with larger schemes.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
Former CEO of ING Direct Vaughn Richtor will assume the role of chairman at MyState following the retirement of Miles Hampton, the compan...