SWINDLES, SCAMS AND STINGS

Col Fry, Australian High Tech Crime CentreRussell Smith, Australian Institute of Criminology

Delia Rickard, Australian Securities & Investment Commission

Chaired by Louise Sylvan (ACCC)

2007 National Consumer Congress

Col Fry

Coordinator

Australian High Tech Crime Centre

14 March 2007

Role of the AHTCC

Centre of knowledge and expertise

assist Australian policing jurisdictions in building high tech crime capacity

Coordinated national approach

serious, complex and/or multi-jurisdictional nature

generally beyond the capability of any one Australian policing jurisdiction

Key Partners

State / Territory Police Services

International Law Enforcement Agencies

Internet Service Providers (ISPs)

Commonwealth Government agencies

Australian Communication and Media Authority (ACMA)

Australian Financial Institutions

Anti Virus Vendors

Key Investigation Tools

Data supplied by ISPs

Telephone / Data Intercepts

Search Warrants

Technical analysis of compromised computers

Information sharing with International law enforcement agencies

IP / Domain redirection

Data from victim organisations

Limitations

Transnational nature of crime type

Technical counter-measures designed to disrupt law enforcement activities

Level of cooperation between jurisdictions / organisations

Legislative limitations

Effectiveness

IP Blocking effected within hours of site identification

Deregistration of illegitimate sites

2 – 4 days dependent on action by site registrar

?? % of sites removed from internet

Australian Government

Australian Institute of Criminology

Australian Government

Australian Institute of Criminology

0

100

200

300

400

500

600

700

800

900

1953 57 61 67 71 75 79 83 87 91 95 99 2003

National Consumer CongressSwindles, scams and stings – what do we know?

Recorded Australian Fraud Offences 1953 - 2006

Rate / 100,000

pop.

Year

What are swindles, scams and stings?

Categories Sub-categories

Advance fee schemes Pyramid schemes, Ponzi schemes, chain letters, ‘Nigerian’ emails, business opportunities, prizes and lotteries

Non-delivery and defective products and services

Online auctions, internet services, computer products, sexual services, credit and loan scams, health scams, educational qualifications

Unsolicited and unwanted goods and services

Spam, securities and investment fraud, bait advertising, inertia selling

Identity fraud Phishing, plastic card fraud, card skimming, un-authorised transactions, online banking fraud

What are the main types of scams? Most prevalent current types of scams

Lottery advance fee scams Pyramid / chain letter scams Employment / money mule / work from home scams Other advance fee / Nigerian scams Investment / get-rich-quick scams

Developing types of scams Phishing scams Online auction scams Mobile and wireless scams Email threats and extortion scams

The path to being scammed‘Experiencing’ scams

Aust (online scams) – 25% NZ (consumer scams) – 48%

USA (consumer fraud) – 36%

Responding to scams

NZ (Nigerian scams) – 1% NZ (ID theft) – 1% NZ (investment scams) 0.5%

Phishing (NZ) – 4% (USA) – 8%

Being victimised by scams

Aust (14-64) – 9% (>65) – 4% UK (adults scammed) – 6.5%

ID fraud (Can)–20% (USA)–4% Online fraud

(USA) – 40%

Losing money to scams

Aust (Scamwatch callers) – 16% Aust (Sensis online fraud) – 4%

UK (plastic card fraud) – 3% Hong Kong (cybercrime) –

13%

Current avenues for reporting

Consumer Affairs / OFTs

Independent Commissions Against Corruption

Professional Boards

Civil Courts

Health Complaints’ Commissioners

SCAM VICTIMS

Audit Offices

Private Sectore.g. banks, companies

Aust Crime Commission

Identity Document Issuers e.g. Passports, RTAs

Aust Federal Police

Aust Competition & Consumer Commission

Aust Securities & Investments Commission

Registries e.g. BD&MOmbudsman

Police Fraud Squads

ACMA - Spam

Aust High Tech Crime Centre

Internet Industry & ADNR

DCITA - Phones

How do consumers respond to scams?

Make no report

Aust (Scamwatch callers) – 69% Aust (online scams) – 50%

Aust (offline fraud) – 12% Aust (online

auctions) – 19% USA (consumer fraud) – 29% USA (ID fraud) – 21% Canada (marketing

fraud) – 44% Canada (ID theft) – 17%

Report to police

Aust (Scamwatch callers) – 7% Aust (online scams) – 3% Aust (offline fraud) 24%

Aust (online auctions) – 6% USA (ID fraud) – 34% Canada (marketing

fraud) – 6%Report to other agencies

Aust (Scamwatch callers) – 13% Aust (online scams) – 21% Aust (offline fraud) – 8%

Aust (online auctions) – 2% Canada (marketing fraud) – 1%

Report to bank / card issuer

Aust (online scams) – 26% Aust (offline fraud) –

72% Canada (marketing fraud) – 6%

Improving our knowledge of consumer fraud

ACFT / AIC survey of callers in March 2007 Survey of those who call ACFT agencies throughout March 2007 go to www.aic.gov.au/surveys/acft/

ACFT / ABS household survey of consumers in 2007 Scam victimisation questions in the ABS national household survey

Coordinated data collection by ACFT member agencies Consultation between ACFT agencies to improve data holdings

Encouraging reporting by consumers Publicity to improve scam reporting rates by the public

Swindles Scams & Stings

an ASIC

Perspective

Delia Rickard

2007 National Consumer Congress

What we will cover

The scams, victims & some solutions re

• Illegal investment schemes

• Early release of super scams

• Cold Calling; and

• Online banking & wrong number scams.

Illegal Investment Schemes

• Often structured as managed investments.

• 2 categories:– Inadvertently illegal– Deliberately illegal

• Often marketed through affinity groups• Techniques to tackle include, proactive

ad monitoring, better use of intelligence, research, enforcement and consumer information campaigns.

Early release of super schemes

• Early release only possible in very limited circumstances.

• Schemes target people on low incomes or in financial difficulty

• Consequences tragic – often lose all your super plus expose yourself to heavy tax liability.

• ASIC, the ATO & industry working together to tackle.

• Compliance checking, enforcement and education.

Cold Calling Scams

• Top scam complaint to ASIC• Numbers growing• Broad range of potential victims.• International cooperation re enforcement but

won’t get all.• Education essential:

– Key message – just hang up– Check ASIC’s free databases:

• are they licensed• does the company exist• have they been banned• are they on our illegal cold caller list?

Online banking & wrong number scams

• Phishing, skimming, unauthorised transactions

• Organised crime.• Review of the EFT Code

• Wrong number scam

Bottom line:• If it sounds to good to be true it probably isn’t;

and• Even if it doesn’t, do your checking before

ANY investing.