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Conclusion and policy implications

Findings and discussion

As in previous years, scams were received by a large proportion of the survey respondents, with 97 percent of participants receiving a scam invitation in the 12 months prior to the survey. The most commonly received scam invitations were lottery scams, computer support centre scams and phishing scams. Despite some changes to the 2013 survey methodology, the most common scam invitation types were consistent with findings from previous surveys.

Thirty-four percent of respondents disclosed that they had responded to a scam invitation in the 12 months prior to the survey. Responding could involve sending money or personal details or seeking further information. Six percent stated that they sent personal information as a result of a scam invitation and four percent sent money, with seven percent of the sample disclosing they had sent personal details and experienced a financial loss. The proportion of respondents experiencing both a financial loss and sending personal details has increased since the 2012 survey findings (Jorna & Hutchings 2013).

Of those scams reported to the ACCC in 2012, more people advised that they had received an unsolicited telephone call as the scam delivery method (ACCC 2013) than in previous years. While email remained the most common method by which scams were reported to be delivered in the ACFT survey, the 2013 findings continue to show high levels of scams delivered by telephone and SMS.

Figure 4 Median reported financial loss by year ($)

Figure 04

Source: ACFT Consumer Fraud Surveys 2013, 2012, 2011, 2010, 2009, 2008 [AIC data files]

As shown in Figure 4, the median financial loss reported each year had been steadily declining since 2010; however, the median financial loss of $2,150 reported in 2013 is the highest reported figure in the AIC’s annual consumer fraud survey thus far and is three times higher than the median loss amount from the amount reported in 2012 survey.

It has previously been noted that the rate of reporting of scams to law enforcement and regulatory agencies is generally quite low (Hutchings & Lindley 2012). This continued to be evident in the 2013 findings, with only 27 percent of victims reporting the scam to police and 17 percent reporting the scam to the ACCC. It was concerning to note that the most common reason for not reporting a scam invitation was that respondents were unsure of which agency to contact regarding the scam. This could indicate that further publicity about the role of SCAMwatch is necessary. There are important reasons for people to report scam attempts or victimisation. For example, a low reporting rate affects resources that may be allocated to combat scams. Non-reporting of scams can also impact the overall knowledge and understanding that agencies hold when developing awareness and education campaigns around scam victimisation.

It has been demonstrated consistently by this survey’s results over the years that it is not the most commonly received scams, such as lottery scams, that cause the most frequent victimisation—it is scams that are new to the public, such as the computer support centre scams or those that have changed or adapted from previous years, such as dating or social networking scams. While reporting rates remain low, when respondents did report a scam invitation, the most frequent reasons for doing so were to prevent others from becoming a victim of the scam and because they knew it was the right thing to do. Those reasons may demonstrate an understanding that education is a key requirement to lessen the impact of scams.

Included in the 2013 survey was the new scam category of ‘boiler-room scams’. A boiler-room scam was defined as a ‘request to buy, sell or retain securities or other investments (including superannuation investments) that are usually offered through cold-calling by scammers who seek to sell worthless shares or investments to recipients’. This category was included in the 2013 survey after the release of the joint Australian Crime Commission and AIC publication Serious and Organised Investment Fraud in Australia. It was believed that the existing category of ‘investment scam’ might not be capturing the types of fraud outlined in the publication. In the 2013 survey findings, ‘boiler-room scams’ were the scam invitation category that was received the least by participants, with only 115 participants receiving a scam invitation of that nature. Of the 115 participants who had received an invitation of that nature, five participants identified as victims of a boiler room scam and three victims advised they had lost a total of $23,750.

Dating and social networking consumer frauds

Consistent with previous ACFT survey findings (Hutchings & Lindley 2012; Jorna & Hutchings 2013), dating scams resulted in the highest amount of money sent of all scam types. Victims of dating scams reported losses exceeding $520,000. This finding remains consistent with scam complaints made to the ACCC (2013) and findings from other Australian investigations. For example, Project Sunbird found that since August 2012, Western Australians sent over $6m to West African countries as a result of relationship frauds (WA Scamnet 2013).

When responding to dating or social networking scams, participants reported sending a combination of money and personal details at higher rates than money or personal details alone. Dating and social networking scams also had the most successful conversion rate, with 13.2 percent of scam invitations of that nature resulting in victimisation. Respondents who identified themselves as victims of a dating or social networking scam and were aged 45 to 54 years old sent the highest amount of money to scammers in response to an invitation of that nature. Although it was respondents aged 55–64 years who sent money the most frequently (33% of those who had sent money as a result of a dating scam).

Suggestions for future campaigns

Suggested themes for future education and awareness campaigns include a focus on:

  • Developing a greater understanding of the consequences of scams; not just the financial impact, but the psychological and social aspects associated with victimisation, and the lasting effects that falling victim to a scam may have. Research about victims of scams has found that it is not just the individual victims who are affected by scams, but rather their entire family may be impacted as a result of the scam (see Button, Lewis & Tapley 2014).
  • Changing public perceptions of victims of consumer fraud. Survey findings indicate that respondents may hold negative views about people who fall victim to scams. These beliefs may be heightened by media portrayals. Future campaigns could seek to educate the public about the harms of scams beyond the financial impact by highlighting the sophistication of some scams and the damage they cause, including the emotional impacts on victims and their families. Two respondents in the survey advised that they felt shame due to their victimisation and had not wanted to report the scam due to those feelings. Public perceptions and the way consumer fraud incidents are referred to as ‘scams’ may trivialise their significance; however, this is a theory that needs to be explored further.
  • Educating the public on what to do if they have been the victim of consumer fraud or if they are receiving a large amount of scam invitations. The survey has continually found that respondents are unaware of where they should report scams and if scams are even illegal. A campaign that seeks to clarify who to report scams to and to give greater understanding of what outcomes those reporting scams may expect would be beneficial for those respondents who received a lot of scam invitations and for those who fell victim to a scam.