Fraud and corporate crime
Australasian Consumer Fraud Taskforce
The AIC is a member of the Australasian Consumer Fraud Taskforce (ACFT). The ACFT was formed in 2005 and comprises 19 government regulatory agencies and departments with responsibility for consumer protection regarding frauds and scams. The ACFT also has a range of community, non-government and private sector organisations as partners in the effort to increase the level of scam awareness in the community. For more information about the ACFT and its activities, visit the SCAMwatch website.
Consumer fraud
Consumer scams are crimes of dishonesty such as forgery, counterfeiting, on-line deception, and theft that are targeted at people who seek to purchase goods and services. Potential victims can be those who use computers and the Internet, older people, those who use professional advisers, and young people who use mobile phones. Often individuals suffer financial loss, although banks and companies also suffer financially where they lose business or are required to compensate people who have lost money.
Extent of consumer fraud in Australia
In Australia, most research into fraud has looked at fraud against businesses and large companies, rather than consumers. Police and court statistics also don't identify consumer scams specifically. Although estimates have been made of the total cost of fraud and also identity-related fraud, we simply do not know how many consumers are victimised through scams and how much money they have lost. Many consumers also don't report their experiences to the police, which makes calculations based on official crime statistics even less reliable.
In one recent case that occurred between 2001 and 2003, the Federal Trade Commission in the United States prosecuted the Skybiz pyramid scam and obtained a settlement for consumers affected worldwide. Australian consumers purchased 156,324 Skybiz "webpacks" - at a cost of A$125 each - amounting to nearly A$20 million - the third highest figure in the world despite the size of our population."
Australians have also lost considerable sums to advance fee scams, such as letters and emails purporting to come from Nigeria. One Sydney victim lost more than A$700,000 while an Adelaide businessman lost more than A$2.3 million to such scams. In another case, a Japanese businessman is said to have lost US$5 million.
The results of a large scale survey of over 7,000 Australian households concerning their experiences of online and off-line fraud will be published shortly.
Consumer fraud in the USA
The 2004 survey of consumer fraud by the Federal Trade Commission in the USA estimated that in the year prior to the survey 24.5 million adults in the United States - 11.2 percent of USA adults - were victims of one or more of the types of fraud studied.
There were 35.5 million incidents of these scams during the year. The most common scams - affecting 4.6 million consumers and occurring 6.6 million times - was the advance payment of money for a promised or guaranteed loan or credit card which the consumer never received.
From January-September 2005, the National Fraud Information Centre in the USA reported that consumer victims of Internet scams lost an average of US$2,033, an increase of US$1,138 over the figure for 2004, with online auction scams accounting for the largest percentage (42%) of all complaints.
The Internet Fraud Complaint Centre in the United States gathers data on Internet fraud complaints made each year. In 2002 it found that Australia was ranked third highest country from which Internet fraud complaints were made, behind the United States and Canada. In 2001, Australia was ranked seventh on the list of countries from which Internet fraud perpetrators operated.
Phishing
Phishing refers to e-mails that appear to come from banks or other trusted businesses and are used to induce recipients to verify their accounts by typing personal details, such as credit card information, into a Web site disguised to appear legitimate.
The Anti-Phishing Working Group identified 16,882 new unique phishing emails in November 2005, a dramatic increase from the 107 emails reported in December 2003. In November 2005, 93 brands were targeted, with 90.3% of phishing attacks targeting financial services companies. Overall, there were 4,630 separate phishing sites reported in November 2005.