Scams Awareness Week, an initiative led by the Australian Competition and Consumer Commission’s (ACCC) Scamwatch, shines a spotlight on damaging and costly scam activity in Australia to raise awareness and protect Australians from falling victim to scams.
The theme of Scams Awareness Week 2021, which ran from 8-12 November, encouraged us to “Stop scams. Speak up”. auDA was pleased to lend its voice to the cause as a Scams Awareness Week partner. To do our bit to speak up on scams, we invited Delia Rickard, Deputy Chair of the ACCC, and David Lacey, Founder and Managing Director of IDCARE, to join a webinar hosted by auDA CEO Rosemary Sinclair AM to discuss scams and identity theft.
A growing problem
Delia set the scene for the conversation by sharing recent statistics from Scamwatch, demonstrating that scam activity is worse than ever.
She told us that this year alone the ACCC has received more than 250,000 reports of scams, accounting for more than $250 million of losses. “By scams, I'm not talking about the big cyber security attacks, I’m talking losses from regular people and small businesses to scams,” she said.
These figures correspond to a staggering 46 percent increase in the number of reports and an 88 percent increase in losses compared to last year – already passing the total losses for 2020. But according to research undertaken by Roy Morgan for the ACCC, only around 12 percent of scam victims report to the ACCC, so in reality the losses will be much higher. “My informed estimate is that Australians could lose over $2 billion to scams this year,” she said.
The psychology of scams
IDCARE, the organisation that David leads, is a not-for-profit that assists people impacted by scams, cybercrime and identity theft by providing one-on-one case management by qualified social workers, counsellors and psychologists. He and his team regularly speak with people who are in disbelief that they have fallen victim to a scam.
“A lot of people that come to us are the ones that say, ‘I was always saying I was never going to fall victim to a scam. I knew I could pick scams. I knew what a scam was’,” he said.
The IDCARE team noticed a trend of people with a high level of scams awareness being scammed. In response, they undertook a piece of research analysing more than 100,000 victim reports to better understand the psychology of scamming.
The research showed that scammers rely on fear to engage the non-rational part of people’s brains - the part that is more likely to miss important cues that something may not be right. The research also found that tunnel vision or ‘task fixation’ can elevate a person’s risk of being scammed.
As David put it, “Scammers try to instil that in you, that your computer is hacked and you need to do something about that. So, you're focused on fixing the hack, or you're focused on resolving the tax debt, making you more likely to further fall into the scam.”
Thankfully, having a friend, colleague or family member nearby during a scam can reduce your risk of engaging with the scammer and losing money or valuable personal details. “One thing scammers hate the most is bystanders, because their subconscious is not the one engaged and they're the ones that can help,” he said.
This increased understanding of how scams work at a psychological level has allowed IDCARE to tailor their education programs, which now also focus on raising awareness of how people can help combat scams by being effective bystanders.
Cryptocurrency scams on the rise
When asked about the types of scams impacting Australians, Delia noted that the most money lost by Australians is to investment scams, with $129 million in losses reported to ACCC so far this year. Of that, around $70 million can be attributed to cryptocurrency related investment scams.
David’s experiences back this up. He explained that most investment-fraud victims IDCARE talks with have invested in what they believed to be a cryptocurrency-related investment.
While many online scams target older people who may be less comfortable with digital technology, cryptocurrency scams victims tend to be younger. “Scammers are sensational emotional manipulators. They will let you put in a bit of money, you don't put in that much at the beginning because you've heard about scams, you want to make sure it's the real thing. A month or so goes by, it looks like your money's going up. So you think, ‘I'm on this fabulous thing’ and then you tell your family and friends and everybody gets cleaned out and it's terrible,” Delia said, explaining how young, clever folk are being tricked by sophisticated scammers.
Delia also warned of the new crossover between romance and investment scams, alerting everyone to be suspicious of any romantic connections that you meet online who encourage specific investment opportunities.
The importance of reporting scams
Delia highlighted the importance of reporting scams. She told us that the ACCC uses the data it receives from reports to scamwatch.gov.au to help prevent further scams and financial losses by providing scam education and getting timely warnings out to the community.
David reinforced her point, stating, “ultimately the only reason people fall for a scam is they don't know what the scam is, so the more that we can communicate about that, the more resilient we'll be as a country”.
The ACCC also uses its data to disrupt scams before they reach people. “Our approach has been to try and stop the scammers connecting with people in the first place. That means working with the telcos to block scam calls. It means working with social media to do better about identifying and getting rid of scammers on their sites,” Delia said.
Stop scams, speak up
The webinar wrapped up with a reminder from Delia and David to help stop scams by speaking up. David emphasised the importance of “raising awareness with people around the value of their personal information and identity credentials” and “being protective about those things”.
In closing, Delia urged everyone to “talk to your family, especially your older relatives or younger, about scams, around how to identify them and how to avoid them.”
For more information about identifying and reporting scams, visit www.scamwatch.gov.au and to access support if you or someone you know has fallen victim to a scam, visit www.idcare.org. You can also read more about the Psychology of Scamming on the IDCARE website.