Australian Institute of Criminology

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The purpose of this paper is to report the findings from the ACFT 2012 survey in order to provide an overall picture of the nature of consumer fraud in Australasia.

Australasian Consumer Fraud Taskforce

ACFT, chaired by the Australian Competition & Consumer Commission (ACCC), was formed in March 2005 and is comprised of 22 Australian and New Zealand governmental regulatory agencies and departments that have responsibility for consumer protection regarding frauds and scams, including consumer protection and policing agencies at the state and federal levels. ACFT also has a range of partners from the community, non-government and private sector that have an interest in increasing the level of scam awareness in the community. The aim of ACFT is to apply a coordinated approach to reduce the number of incidents and the impact of consumer frauds and scams. In order to meet this aim, ACFT coordinates a week-long information campaign each year, timed to coincide with global consumer fraud prevention activities.

The AIC has conducted an annual survey to assess consumer fraud experiences since 2006. See Smith (2007) for the results of the pilot study conducted in 2006, Smith and Akman (2008) for the 2007 survey results, Budd and Anderson (2011) for the results of the 2008 and 2009 surveys, and Hutchings and Lindley (2012) for the 2010 and 2011 survey results. The survey reported in this paper ran for three months between January and March 2012, which included the annual Fraud Week conducted by the Taskforce.

Defining scams

According to the Australian Bureau of Statistics, scams are defined as ‘fraudulent invitation, request, notification or offer, designed to obtain someone’s personal information or money or otherwise to obtain a financial benefit by deceptive means’ (ABS 2008: 5).

While the terms ‘fraud’ and ‘scam’ are often used interchangeably, scams are generally considered to be a fraud category, with fraud referring to matters involving dishonesty and deception. There are a range of consumer fraud activities that may be classified as scams. Eight common types of consumer frauds were explored in the 2012 ACFT survey, namely advance fee fraud, dating scams, financial advice scams, inheritance scams, lottery scams, phishing, work from home scams and computer support scams. Definitions for these scam types are provided in Table 1. Consumer scams target individuals and consumers, rather than businesses or governments (Budd & Anderson 2011).

Table 1 Common scams and their definitions
Advance fee fraud/Nigerian 419 scams Advance fee frauds or Nigerian 419 scams have existed throughout history and have adapted to advances in technology. Generally, these scams are communicated by email or letter and seek assistance to transfer a large amount of money overseas. These are the most commonly complained about scams in Australia according to the ACCC
Dating/social networking scams Dating and social networking scams may exist through illegitimate or legitimate dating or social networking websites and may require payment for each email sent and received by a potential match. Alternatively, scammers may hook victims by claiming to have an unwell relative or severe financial trouble and seek assistance. Due to the trust already established, victims may be more easily duped and in disbelief when scammers no longer remain in communication after money has been sent
Financial advice scams Financial advice scams involve cold calls by scammers operating from overseas who offer ‘advice’ on shares, mortgage or real estate ‘investments’, ‘high-return’ schemes, option trading or foreign currency trading. The advice generally does not involve a legitimate investment nor lead to increased wealth
Inheritance scams Inheritance scams are usually sent by a lawyer or bank purporting to act for a deceased estate and may falsely claim that a distant relative has died and through some means has left the potential victim a large inheritance
Lottery scams A lottery scam may be delivered by email, text message or pop-up screen falsely claiming you have won a prize or competition
Phishing Phishing refers to emails that trick people into giving out their personal details and banking information; they are increasingly also sent by SMS
Work from home scams (money laundering) Work from home scams are often promoted through spam emails or advertisements on noticeboards, however, are generally not advertising real jobs. Work from home scams are generally fronts for illegal money-laundering activities or pyramid schemes
Computer support centre scams Computer support centre scams occur when recipients receive mainly telephone calls from scammers claiming they are from well-known computer manufacturers or businesses that can fix problems with the recipients’ computers. Scammers may ask for money, personal details or passwords or seek to sell worthless products to fix computers

Source: ACCC 2012a, 2011; AIC ACFT Survey 2012