Scams are now costing Australians more than $3 billion a year

Australians lost a record $3.1 billion to financial scammers in 2022. However, the Australian Competition and Consumer Commission (ACCC) suggests the real figure is likely much higher, with an estimated 30% of scams going unreported.

The findings come from the watchdog’s Targeting Scams report, which combines data from Scamwatch, ReportCyber, the Australian Financial Crimes Exchange (AFCX), IDCARE and other government agencies.

Who is getting scammed and how?

The report shows that investment scams were the highest loss category ($1.5 billion), followed by remote access scams ($229 million) and payment redirection scams ($224 million). Small business owners are also in the line of fire, with the number of businesses falling prey to scammers almost doubling in 2022.

According to Scamwatch, small and micro businesses have lost $13.7 million to scams in 2022, a 95 per cent increase compared to the previous year. The biggest contributor to these losses was payment redirection scams, also known as business email compromise (BEC).

“Australians lost more money to scams than ever before in 2022, but the true cost of scams is much more than a dollar figure as they also cause emotional distress to victims, their families and businesses,” ACCC Deputy Chair Catriona Lowe said.

“As scammers become increasingly sophisticated in their tactics, it is clear a coordinated response across government, law enforcement and the private sector is essential to combat scams more effectively.”

Banks called on to do more to limit scams

With more than 1.5 billion lost to personal investment scams, the ACCC is also calling on the nation’s banks to take more preventative measures. The watchdog is lobbying for uniform rules to be introduced like the UK’s Confirmation of Payee system, to help prevent these thefts. Confirmation of Payee was introduced in 2019 across the UK to assist people in identifying scams by matching account numbers to the intended recipient across all banks. The ACCC believes introducing a similar scheme would save millions of Aussie dollars going into the hands of scammers.

“Traditional bank transfers remain one of the most commonly reported payment methods to scammers. While some banks have made recent positive steps to protect their customers, we would welcome uniform measures across the sector, similar to the UK’s Confirmation of Payee, which matches an account number to the intended recipient across all banks,” Lowe said.

“That’s why we continue to lend our expertise and support to prepare for the establishment of the Government’s National Anti-Scam Centre, with the ultimate aim of making Australia the hardest target for scammers,” Lowe added.

Scammers becoming more sophisticated

Financial losses reported to Scamwatch in 2022 totalled more than $569 million in 2022, a 76 per cent increase on the previous year. Lowe said despite fewer reports to Scamwatch, losses experienced by each victim rose by more than 50 per cent to an average of $20,000. This is due, in part, to scammers using new technology to lure and deceive victims.

Lowe says scams evolve quickly and, unfortunately, many Australians are losing their life savings to these opportunistic grifters.

“We have seen alarming new tactics emerge which make scams incredibly difficult to detect. This includes everything from impersonating official phone numbers, email addresses and websites of legitimate organisations to scam texts that appear in the same conversation thread as genuine messages. This means now more than ever, anyone can fall victim to a scam,” Lowe explained.

Cyber breaches increase vulnerability to scams

Over the past year several high-profile data breaches including, Optus, Uber, Telstra and Medibank, have leaked Aussies’ personal information, increasing Aussies’ vulnerability to scams. Lowe says in the weeks following these data breaches 100s of incidents were reported to Scamwatch.

“Scammers are the most opportunistic of all criminals. Unfortunately, the more information a scammer has about you, the more convincing they can be. In the weeks after the data breaches, there were hundreds of reports to Scamwatch, including reports of scammers impersonating government departments and businesses to carry out identity theft and remote access scams,” Lowe said.

Calls for tougher security and collaborative measures

While recent data breaches have seen many organisations tighten their security, Lowe says more work needs to be done to ensure customer data is safeguarded.

“Unfortunately, there are still significant gaps between and within the key sectors – banks, telcos and digital platforms; and between regulators that scammers exploit to steal money from customers. So we would like to see initiatives that apply across the sectors, knowing that scammers will target the weakest link,” Lowe said.

The ACCC deputy chair said effectively tackling scammers requires a three-pronged approach.

“First, we need to stop scammers reaching consumers by disrupting phone calls, SMS, email, social media messaging or other ways scammers contact would-be victims. Secondly, we need to make sure consumers are supported with up-to-date information so they have the best chance of spotting a scammer when contacted. Finally, we need effective measures in place to prevent funds being transferred to scammers,” Lowe said.