Online romance and investment scams evolve faster than authorities can keep up: expert says

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Cyber fraud is under-reported and evolving faster than authorities can keep up, a criminologist has said.

Australians lost $300 million to scams and fraud in 2016 according to the Australian Competition and Consumer Commission’s annual report, with about 58 per cent reported to ACCC as online scams.

More than half of all scams reported to the Australian Competition and Consumer Commission in 2016 were online scams. More than half of all scams reported to the Australian Competition and Consumer Commission in 2016 were online scams. Photo: Bloomberg

Dr Cassandra Cross of the Queensland University of Technology’s School of Justice said the percentage was a conservative figure.

“That is likely to be the tip of a giant iceberg based on actual losses and all the non-financial harms as well,” she said.

“We know that fraud is one of the least-reported crimes across all crime types and that online fraud is reported even less.

“Part of that is the victims don’t know they have been victimised as such … there is also issues around the shame and stigma with being a victim of fraud in that no one really wants to come forward and say: ‘I was a victim, this happened to me.’ “

Dr Cross said recent cyber scams, including a Latvian couple’s online scam and a cold calling scam that milked $30 million out of its victims, highlighted the diversity and far-reaching capabilities of cybercrime.

“Fraud has always existed, for hundreds if not thousands of years, but the internet and technology has opened up the possibility for offenders to target victims,” she said.

QUT's School of Justice Dr Cassandra Cross. QUT’s School of Justice Dr Cassandra Cross. Photo: Nicholas Sterkenburg

The storylines and selling points of online crimes, including romance, dating or investment scams, were “white noise” that needed to be ignored when it came to building prevention messages and creating awareness, Dr Cross said.

“We focus on the different plot lines, the different ways we can be approached, whether it is through investment fraud, romance fraud … but for me it needs to come back to the central premise,” Dr Cross said.

“Across all victims that I have spoken to … at one point they have all been asked to transfer money.

“My main message is that if you are asked to send money, it doesn’t matter who it is from or the reason … if you do send that money, you have to be comfortable you are going to lose it for good.”

Not a lot is known about the offenders behind cybercrime, Dr Cross said, which has made shutting down online scams difficult.

“We can say they are highly skilled, tech savvy, have all the resources available to them … they know how to talk to people, manipulate people and coerce people to send money and comply with their request,” she said.

“From the little that we do know, they are organised groups in other countries that work together.

“We know there is a lot of money going offshore, not just to West African countries that we have traditionally associated this with but with a number of Asian countries: it is really going all over the world which is a challenge for law enforcement, prevention messages.”

Dr Cross said more needed to be done to support the victims of cybercrime.

“There still is a lot of blaming … there still is not accurate understandings of the impact this has,” she said.

“It can lead to relationship breakdowns, unemployment and homelessness, and in some cases victims will contemplate or take their own life.”

Better education with regards to cybercrime responses by police and organisations like banks, financial institutions and companies that own the platforms where these crimes took place was also needed, Dr Cross said.

“I think there is this thought that because it is cyber it is too hard or should be passed to a specialist police unit and in many cases that is not true,” she said.

“Just because something has been mentioned online doesn’t necessarily mean police can’t use their traditional investigation techniques and (do) what they would normally to respond to victims.”

Agencies such as ACCC and the Australian Cybercrime Online Reporting Network were often left behind when it came to raising awareness on active online scams, Dr Cross said.

“The problem is when victims are approached with investment opportunities, a lot of people will Google things and the sad part is that by the time organisations such as ACORN and the ACCC perhaps come to learn that this is a fraudulent operation and put some notice out there, it is too late – people have already invested and lost their money,” she said.

“It is difficult to be proactive and identify companies as they are emerging because they will just keep popping up with different names using the same approach.”

Dr Cross is the co-author of Cyber Frauds, Scams and their Victims, which was published this week.

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