Australian Institute of Criminology

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Executive summary

Research background and methodology

The Australasian Consumer Fraud Taskforce (ACFT) includes 22 government regulatory agencies and departments in Australia and New Zealand that work alongside private sector, community and non-government partners to prevent fraud. The ACFT has conducted a range of fraud prevention and awareness-raising activities since 2006. One key activity of the ACFT is to hold an annual consumer fraud survey to obtain a snapshot of the public’s exposure to consumer scams, to assess their impact, to determine how victims respond and to identify emerging typologies and issues. As the survey participants were not randomly sampled, the survey findings are not representative of the general population.

The Australian Institute of Criminology (AIC) is a member of the ACFT and chair of the research subgroup. This report presents the results of the 2010 and 2011 surveys, which each ran for three months commencing from 1 January and encompassed National Fraud Prevention week that coincides with global awareness-raising activities. The theme of the 2010 campaign was Online Offensive—Fighting Fraud Online, which focused on the increased prevalence of online fraud. In 2011, the campaign Scams—It’s Personal aimed to increase awareness about personalised and targeted frauds and scams. Both surveys explored scams where respondents had been contacted by phone, SMS, email, letter, via the internet and/or in person by someone that they did not know in relation to:

  • having won a lottery or some other prize (lottery scams);
  • a request for assistance to transfer money out of another country (such as Nigeria; advance fee frauds);
  • a notification of an inheritance (inheritance scams);
  • a request from a business to confirm personal details or passwords (phishing scams);
  • a request to supply financial advice (financial advice scams);
  • an opportunity to work from home (a front for money laundering; work from home scams);
  • pursuing a personal relationship that turned out to be false (dating scams); and
  • other fraud types.

The surveys were available to complete on the AIC’s website. Participants who did not reside in Australia or New Zealand were excluded from the survey and invalid responses were not counted. In 2010, 246 participants completed the survey; the number of respondents increased in 2011, with 1,145 respondents. The larger sample size in 2011 may be partly due to the increased coverage of the survey in the media. Outliers, typically very large loss figures from respondents who appeared to have misunderstood the question, were removed from the analysis.

The 2010 and 2011 surveys suffer from a number of limitations that make it difficult to generalise their findings to the greater Australasian population. These limitations include:

  • The small sample size, particularly for the 2010 survey, for which only 246 valid responses were received. It is likely that the small response rate for 2010 can be attributed to the lack of media coverage surrounding the survey.
  • The self-selection bias of the survey design. This means that those who participated in the survey may be different from the general population, making the findings difficult to generalise.
  • The survey is limited to those who have computer and internet access.
  • Differences between the 2010 and 2011 surveys made comparison difficult. For example, in the 2010 survey, participants were asked about ‘unsolicited contacts’, however, the wording in 2011 changed to ‘scams’. Because of these differences, the surveys have been analysed separately in this report, however conclusions are drawn across the two years, where possible.

Delivery of scams

The 2010 and 2011 surveys asked respondents about the types of scams they had been sent, as well as how they had been delivered. Results indicated that:

  • 89 percent of respondents in 2010 and 94 percent in 2011 reported having received at least one scam invitation in the 12 months preceding the survey.
  • The most common type of scams reported to have been received in 2010 were lottery scams (received by 56% of the total sample), advance fee frauds (51%) and phishing scams (50%). In 2011, lottery scams remained the most common type of scam received (by 57% of the total sample). While advance fee frauds and phishing scams were also common (received by 41% of the sample each), their prevalence was exceeded by the proportion of work from home scams reported (by 41% of the total sample).
  • The least common type of scams received in 2010 and 2011 were dating or romance scams, reported by 19 percent of the total sample in 2010 and by 11 percent of respondents in 2011.
  • Email was the most common scam delivery method, with 76 percent of the sample receiving a scam this way in 2010 and 67 percent in 2011. However, the use of telecommunications to deliver scam invitations increased in 2011, with 39 percent of the sample receiving scams by telephone (either landline or mobile) and 15 percent receiving scams by short message service (SMS).

Responding to scam invitations

Responding to scam invitations included requesting further information, providing personal details or suffering a financial loss. Key findings included:

  • Twenty-nine percent of those surveyed in 2010 and 29 percent in 2011 responded in some way to a scam invitation in the 12 months preceding the survey:
    • eight percent in 2010 and 2011 sent their personal details;
    • two percent of 2010 respondents reported a financial loss, compared with five percent in 2011; and
    • nine percent in 2010 and seven percent in 2011 reported both sending their personal details and having experienced a financial loss.
  • Dating scams, although the least likely to be received, were the single category most likely to result in a financial loss or the disclosure of personal details by those who had been exposed to this scam type—as reported by respondents in both the 2010 and 2011 surveys.
  • The median amount lost to scams was $1,065 in 2010 and $700 in 2011. With outliers removed (in both years there were some very large loss figures from respondents who appeared to have misunderstood the question), a total financial loss of $135,874 was reported in 2010 and a total loss of $6,999,718 in 2011.
  • The top two reasons given for not responding to scam invitations was ‘something was not quite right with the offer or invitation’ (46% of the total sample in 2010 and 52% in 2011) and ‘had received similar offers before and thought they were scams’ (45% in 2010 and 49% in 2011).

Victim demographics

Victims were defined as respondents who had provided their personal details and/or suffered a financial loss as the result of replying to a scam invitation. Analysis of the demographic variables of scam victims indicated that:

  • Of those survey respondents who disclosed their gender (96% in 2010 and 99% in 2011), 21 percent of females reported victimisation in 2010 and 18 percent in 2011. For male respondents, 16 percent reported victimisation in 2010 and 21 percent in 2011.
  • In 2010, those in the 45 to 54 year old age group reported the highest percentage of victimisation (29% of total respondents within that age category). In 2011, those aged 65 years and over reported the highest levels of victimisation (23% of total respondents within that age category), closely followed by the 17 years and under category (23%).
  • In 2010, those respondents earning $20,000 to $40,000 per annum reported the highest percentage of victimisation (40% of total respondents within that income category). In 2011, those earning less than $20,000 had the highest percentage of victimisation (29% of total respondents within that income category).

Reporting scams

Respondents were asked whether they had reported scams to another person or organisation. Key findings included:

  • In 2010, 72 percent of the total sample reported a scam to at least one person or organisation compared with only 65 percent in 2011.
  • Family and friends were the most common recipients of scam complaints, with 42 percent of the total sample reporting to this category in 2010 and 36 percent in 2011.
  • The most common reasons provided for not reporting scams were ‘didn’t think anything would be done’ (29% of the total sample in 2010 and 27% in 2011), ‘unsure of which agency to contact’ (25% in 2010 and 39% in 2011) and ‘not worth the effort’ (22% in 2010 and 25% in 2011). The 2011 survey included a new response category ‘received too many to report’, which was selected by 25 percent of the total sample.
  • The 2011 survey included a new question about reasons for reporting scams. The top four responses selected were ‘wanted to prevent others from being scammed’ (41% of the total sample), ‘knew it was the right thing to do’ (30%), ‘to assist in the investigation of an offence’ (25%) and ‘desired the apprehension of offenders’ (25%).

Perceptions of scams

Respondents were asked whether they considered each scam type to be a crime, wrong but not a crime, or just something that happens. The results indicated that:

  • In 2010, the top three scam types to be considered a crime by respondents were advance fee fraud (74%), phishing (73%) and lottery scams (61%).
  • The top three scam types to be considered a crime by respondents to the 2011 survey were phishing (80%), advance fee fraud (77%) and work from home scams (66%).

Recommendations for future campaigns

The report findings were used to develop recommendations for future education and awareness campaigns. It was suggested that future campaigns should focus on:

  • increasing awareness about hidden fraud, where victims may not be aware that they have been scammed;
  • the use of new technologies that may be misused by scammers;
  • changing the culture where information is freely provided to third parties; and
  • how to recognise scams and who to report them to, coinciding with a message aimed at reducing the stigma associated with falling victim to a scam.