Due to a significant rise in fraudulent activities that have already resulted in significant financial losses for individuals, authorities have urged Australians to exercise extra caution when reviewing invoices.
A significant increase in payment redirection scams has advised Australians to exercise caution and thoroughly review their invoices. These fraudulent activities have resulted in a staggering loss of over $16 million for citizens in the past year. The issue is escalating in Australia, according to the Scamwatch service of the Australian Competition and Consumer Commission (ACCC). A couple fell victim to a sophisticated scam, losing an astounding $800,000.
Fraudsters mimic legitimate companies that the target has previously engaged with and send an invoice for a service provided. They operate by targeting a large number of recipients, relying on the hope that a small fraction of them will be gullible enough to trust the unidentified number or email address requesting payment.
Fraudulent invoices are occasionally transmitted through compromised email accounts of the company or through deceptive emails that closely mimic the legitimate business’s email. Many individuals only become aware of being scammed when the business in question contacts them regarding an outstanding invoice.
Industries that deal with high-value transactions, like real estate and construction, are often the focus of attention due to the significant amounts of money involved. Travel companies and car dealerships have also been recent subjects of investigation. However, there are also scammers who operate on a smaller scale, often pretending to be road services and requesting payment for unpaid tolls.
“Scammers are sophisticated criminals and are becoming more targeted in how they exploit Australian consumers and businesses,” ACCC Deputy Chair Catriona Lowe said.
“These criminals are posing as genuine businesses that a consumer has recently dealt with, sending fake invoices with altered payment details so that the money ends up with the scammer.”
A couple lost more than $800,000 after falling victim to a scammer who posed as their solicitor and provided them with a fraudulent bank account. While they were trying to secure a property, the scam occurred. Yet another unfortunate victim fell prey to scammers who hacked into the email account of a car dealership, deceiving him with a fraudulent invoice even after he had already made a safe deposit.
It is crucial to exercise caution and thoroughly vet the individuals or entities you are transacting with prior to making substantial payments, as recommended by the ACCC. If you have concerns or believe you may have made an error in a financial transaction, it is important to promptly reach out to your bank and report the incident to Scamwatch.
“After paying the deposit securely through the dealership’s official website, he received an email with an invoice for the remaining amount owed which he paid thinking it was genuine,” the ACCC said.
“When he went to pick up his new car, he found out that the invoice was a scam and the dealership had only received his deposit.”
Elderly individuals are increasingly vulnerable to becoming targets of scammers in the digital realm. The latest data from ScamWatch indicates a significant surge in the amount of money Australians lost to social media scams in 2023. The reported losses reached a staggering $95 million, marking a substantial 249 percent increase compared to the previous year.
Particularly impacted were those 65 and older, who accounted for nearly one-third of all reported social media scam losses between October and December 2023. The significant increase of 57 percent from the previous quarter is cause for concern, especially for older Australians who are vulnerable to scams related to investments and romance.
“Over 16,000 people who reported losing money (in 2023) said it started on a social media platform or an online forum with an ad, a post, or a message,” Scamwatch said.
“Many people reported placing an order, usually after seeing an ad, but never received their goods. Some described advertisements that impersonated real, online retailers.”
Despite a decline in losses during the last quarter of 2023, Australians still fell victim to scams, resulting in a staggering $477 million in total losses. Various sectors, such as cryptocurrency and banking, experienced a decrease in fraudulent activities.
Over the course of three months, Australians experienced a significant decrease in scam-related losses, with a total of $82 million lost. This represents a 26% decline from the previous quarter and a 43% decrease compared to the same period last year. In 2023, there was a significant decrease in losses from cryptocurrency scams, with a 74% reduction compared to the previous year. Similarly, losses from bank transfer and investment scams also saw a notable decline, dropping by approximately one-third.
During the October–December 2023 period, the reported losses to scams amounted to $1224, with a significant portion originating from high-cost investment scams. In late 2023, phishing scams took the lead as the most reported online scams, with a staggering number of 67,000 cases.