Australians lost a record-breaking $3.1 billion to scams last year – an 80% increase. Their lives are being ruined.

According to Scamwatch, Sarah from Sydney knows the devastation firsthand. She lost her life savings in a romance scam. The true cost of scams extends far beyond the financial toll – they shatter trust, devastate families, and can even lead to tragedy.

As scammers relentlessly target Australians with increasingly sophisticated tactics, we need to urgently coordinate our efforts to stop them.  The National Anti-Scam Centre has been set up to do just that, coordinating government, law enforcement, and the private sector to combat scams. It builds on the vital work of the ACCC’s Scamwatch service.

The National Anti-Scam Centre actively helps people spot and avoid scams.  They share up-to-date information across government and the private sector to disrupt scammers and provide ways for people to protect themselves. Their first fusion cell is relentlessly combating the growing problem of investment scams, which cost Australians more than $1 billion a year.

The National Anti-Scam Centre quarterly update provides insights into the most significant scams impacting Australians and highlights the key initiatives put in action to disrupt and prevent scams.

Based on the latest Scamwatch data the ACCC is optimistic that the accelerating increase in losses to scams is beginning to turn.

Australians reported $82.1 million in losses to Scamwatch in the October to December 2023 quarter, which is down by 43% from the same quarter in 2022, and down by 26% from the July to September 2023 quarter.

Comparing data with the same quarter in 2022, the National Anti-Scam Centre has seen significant falls, including:

  • 38% decrease in investment scam losses to $52.4 million
  • 74% decrease in losses by cryptocurrency to $12.4 million
  • 31% decrease in losses by bank transfer to $40.2 million
  • 22% decrease in losses where social networking is the contact method to $15.9 million.

The ACCC has also allowed the banks to collaborate on development of industry standards to combat scams. They can do this together with the telecoms companies. This collaboration started immediately after they received the permission and in various combinations have already put in place new levels of protection. The Australian Government has not gone that far to actually force the banks to compensate customers for scams as is the case in the UK (see below). This of course, then motivates the financial sector to put better systems in place to combat scams in order to avoid having to compensate victims of a scam.

Global Collaboration is Essential

Of course, this is an international problem and more global collaboration is needed. In February, the British government launched a major fraud-fighting initiative called the “Stop! Think Fraud” campaign. Backed by leading counter-fraud experts, it provides clear and consistent advice to the public and aims to reach 95% of British adults.

Britain has taken bold steps, declaring fraud a national security threat, launching a National Fraud Squad with about 400 investigators, and deploying its intelligence services to relentlessly pursue fraudsters wherever they are in the world. Their goal is to move from reactive law enforcement to proactive “intelligence-led disruption” of organised crime.

They also passed a law requiring financial companies to fully compensate victims of a scam – basically put the monkey on their financial sectors’ back, which of course then motivates the financial sector to work with and motivate government agencies to get “left of boom” to avoid having to compensate victims of a scam.

The British government is also working closely with the private sector, including tech, telecoms and financial institutions. In an “Online Fraud Charter” announced in November, large tech companies volunteered to take significant steps to reduce fraud on their platforms. If Britain can partner with Google, Microsoft, Facebook, and Amazon to fight scams, so can Washington.

The British government reports that its fraud strategy is working, with fraud declining during the past year.

A Growing Crisis in the USA

There are similar calls in the USA for a national strategy and whole-of-government approach, including clear authorities, broader information collection and sharing, and sufficient resources.

According to a poll conducted by Gallup and the nonprofit Stop Scams Alliance, 8% of U.S. adults — roughly 21 million Americans — were scammed in the past year. In other words, more than 57,000 people are being scammed each day.

Fraud losses reported to the FBI alone increased nearly 15-fold between 2014 and 2023, from roughly $800 million to $12.5 billion. The average loss for those over 60 is $35,101, but some lose far more, including their homes.  A recent Federal Trade Commission report estimates that total U.S. fraud losses — including unreported losses — might now be as high as $137.4 billion annually.

Scams are a public health problem in addition to a financial crime. Victims often experience severe emotional and health issues in the aftermath. The FBI reports that at least 20 victims of sextortion scams, primarily children, have died by suicide in recent years.

Much of this criminal activity fuels organised crime syndicates worldwide, funding further scams, slavery, human trafficking, drug trafficking, and even terrorist activity. FBI Director Christopher A. Wray recently warned that criminals are exploiting AI, which will only turbocharge fraud.

Call to Action: Learn how to protect yourself. Visit Scamwatch today.

Paul Budde

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