SWINDLES, SCAMS AND STINGS Col Fry , Australian High Tech Crime Centre

1. SWINDLES, SCAMS AND STINGS Col Fry, Australian High Tech Crime Centre Russell Smith, Australian Institute of Criminology Delia Rickard, Australian Securities & Investment Commission Chaired by Louise Sylvan (ACCC)

3. 2007 National Consumer Congress Col Fry Coordinator Australian High Tech Crime Centre 14 March 2007

4. 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

5. 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

6. 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

7. Limitations Transnational nature of crime type Technical counter-measures designed to disrupt law enforcement activities Level of cooperation between jurisdictions / organisations Legislative limitations

8. 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

10. National Consumer CongressSwindles, scams and stings – what do we know? Recorded Australian Fraud Offences 1953 - 2006 Rate / 100,000 pop. Year

11. What are swindles, scams and stings?

12. 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

13. 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% Losing money to scams Aust (Scamwatch callers) – 16% Aust (Sensis online fraud) – 4% UK (plastic card fraud) – 3% Hong Kong (cybercrime) – 13% 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%

14. Current avenues for reporting

15. How do consumers respond to scams? 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 bank / card issuer Aust (online scams) – 26% Aust (offline fraud) – 72% Canada (marketing fraud) – 6% 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 other agencies Aust (Scamwatch callers) – 13% Aust (online scams) – 21% Aust (offline fraud) – 8% Aust (online auctions) – 2% Canada (marketing fraud) – 1%

16. 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

17. Swindles Scams & Stingsan ASICPerspective Delia Rickard 2007 National Consumer Congress

18. 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.

19. 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.

20. 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.

21. 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?

22. 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.