Scams and cybercrime are booming in the wake of the COVID-19 pandemic, leaving thousands of people out of pocket. Investment scams in particular have surged, costing victims more than $26,000 on average. So who is falling victim and how can you avoid being scammed?
Australians lost a record $851 million to scams in 2020, as criminals took advantage of the pandemic to con unsuspecting people out of their savings.
Especially worrying was a sharp rise in ‘investment scams’, which surged to $328 million in losses; more than double the previous year’s losses of $126 million.
A further $131 million was lost to romance scams, while more than $62 million was lost in shopping scams.
The ACCC says scammers were quick to take advantage of the bushfires and the pandemic to con people out of their personal information and money.
“Unfortunately scammers continue to become more sophisticated and last year used the COVID-19 pandemic to scam and take advantage of people from all walks of life during this crisis,” ACCC deputy chair Delia Rickard says.
What is an investment scam and why are they booming?
An investment scam involves being conned into parting with money on the promise of a good financial return.
With more people than ever interacting online due to the pandemic, whole new sections of the community have become a target for scammers.
The ACCC says it appears to be increasingly difficult for people to identify legitimate investment opportunities from scams.
“Scammers no longer just rely on professional looking websites. They now have the ability to contact people through phone, apps, social media and other means.”
In the past, people aged 45 to 64 were most likely to fall victim, with men targeted at twice the rate of women. However, scammers are now using new methods to target younger people, as well as minority groups and people with disabilities.
So far in 2021, the highest number of reports has come from those aged 25 to 44, while those aged over 65 years have lost the most money.
What is ‘romance baiting’?
The ACCC says ‘romance baiting’ is a new form of scam that emerged last year targeting sections of the community who haven’t typically fallen victim to investment scams.
In a romance baiting scam, victims are “contacted on a dating app, typically moved off the app and then lured into an investment scam, often involving cryptocurrency.”
Unlike traditional dating and romance scams, which tend to target older Australians, people aged 25 to 34 lost the most money ($7.3 million) to this new type of scam last year.