The evolving, costly tactics of scammers

The BDO Australian Scam Culture Report provides a deep dive analysis of scam activity during the first quarter of FY24 and estimates that scams cost Australia more than $105 million over that period.

Nov 27, 2023, updated Dec 06, 2023
Photo: Taylor Grote/Unsplash

Photo: Taylor Grote/Unsplash

In today’s continually evolving digital landscape, scammers are constantly looking for newer ways to deceive the vulnerable via email, text messages, phone calls and social media.

Through convincing marketing and the latest technology, scammers leverage authority, urgency, and emotion, costing hard-working Australians and the industry millions of dollars and untold emotional distress.

According to Michael Cassidy, BDO’s National Forensic Services Leader, a record level of scam activity continued during the September 2023 quarter, with Scamwatch reporting an approximate financial loss of over $105 million.

“Investment scams, while not the highest by number of occurrences, still account for the highest dollar amount of losses in the quarter,” Cassidy said.

“However, in the September 2023 quarter, losses attributed to investment scams decreased by over $13 million in comparison to the June 2023 quarter.”

He said the decrease may be the first result of proactive action by the government and other players.

This includes ASIC’s new investment scam and phishing website takedown capability, which forms part of the government’s Fighting Scams initiative and supports the work of the National Anti-Scams Centre (NASC) which commenced operation on 1 July 2023.

“It will be interesting to see the impact this may have in future quarters in relation to monies lost by way of investment scams,” Cassidy said.

The survey results found:

Scam delivery method (four-quarter comparison)

Emails have surpassed phone calls and increased by 4 per cent this quarter, becoming the primary method for delivering scams. This shift may be attributable to the increasing reliance on digital communication and the inherent capability of email systems to be “individually” tailored yet be sent out in bulk to large volumes of recipients.

Loss by scam type

Investment scams continue to have the highest financial impact, contributing to 66 per cent of the total monies lost reported in the September quarter.

Common types of investment scams include Crypto scams, Ponzi schemes, Imposter bonds, and fake initial public offering scams.

Loss by delivery method (two-quarter comparison)

In the September quarter, phone calls, emails and text messages equal 84 per cent of reported activity, which resulted in 45 per cent of reported value lost.

The monetary value lost to scams has dropped by 24 per cent from the June quarter to the September quarter, although the number of reports has increased by 11 per cent.

Total loss by scams (two-quarter comparison)

The total losses of reported scams in the September quarter have decreased by 24 per cent compared to the previous April to June quarter.

The total amount lost in the June quarter was $139,279,875 compared to the total amount lost in the July-September quarter of $105,499,889.

Age groups targeted in scams (four-quarter comparison)

In the June quarter, 47 per cent of individuals subjected to scams were aged 55 and over. In the September quarter, this figure increased to 54 per cent. The 7 per cent increase illustrates that scammers continue to target Gen X populations.

Dealings on the dark web

There is increased negotiation activity on the dark web, with traders and buyers actively promoting communication to resolve issues and differences.

Like any marketplace, trust is crucial to making a transaction on the dark web, because if a transaction doesn’t go to plan, you cannot report it to the police. Sellers inviting buyers to negotiate with them and reach a solution has become a standardised feature, rather than setting fixed prices with no room to move.

There has been no significant change in pricing, with the possible exception of passports which have significantly dropped in value.

An increase in activity for identity documents in countries such as Germany, Italy and France.

Law enforcement is active, with a number of the larger and more popular marketplace sites having been shut down, however, several newer ones have sprung up in their place – many with the same vendors.

Security to access marketplaces is high – mainstream businesses could learn a lot from the approaches undertaken.

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