Tag: ACCC

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Australia Investing Regulation Scams

Australians Lost Almost $100 Million in 2021 to Crypto Investment Scams

Aussies lost more than A$2 billion to scams in 2021, including losses of A$84 million due to scammers seeking payment with cryptocurrency, according to an Australian Competition and Consumer Commission (ACCC) report.

The ACCC’s annual report on scams published on July 4 found that investment scams increased by 135 percent in 2021 and caused the most financial harm, resulting in A$701 million lost by Australians. 

This spike was driven specifically by crypto investment scams, which led to Aussie investors reporting losses of A$99 million – 270 percent higher than the previous year. 

The report tallies losses based on consumer reports shared with Scamwatch, ReportCyber, and 12 financial institutions and government agencies.

Common Types of Crypto Scams Aussies Fall For

Some of the most common ways scammers exploited Aussies’ interest in crypto to steal their hard-earned money include:

  • fake investment and crypto trading platforms, which sometimes mimic legitimate, well-known websites;
  • sales of fake crypto wallets;
  • tricking people into revealing their seed phrase for an existing wallet; and
  • offers to “help” people get set up on a crypto platform by remotely accessing their computer. 

Scammers typically contacted victims by phone, or through social media and websites. Crypto investment scams affected all age groups but people aged 65 years and over lost the most money (A$26.5 million). 

Combating Crypto Scams Requires ‘Urgent Work’

In her foreword to the report, ACCC deputy chair Delia Rickard suggests urgent work is needed to combat crypto investment scams:

The popularity and hype of cryptocurrency has led to a surge in losses to investment scams with combined losses of $701 million. At the same time, it is also becoming the preferred method of payment across all types of scams.

Delia Rickard, deputy chair, ACCC

While bank transfers remained the most common way scammers requested payment from victims in 2021, requests for cryptocurrency increased dramatically – up 216 percent. Earlier this year, the ACCC revealed crypto had surpassed bank transfers as scammers’ preferred payment method. 

Rickard also expressed her hope that government efforts towards licensing digital currency exchanges and custody requirements for crypto assets would slow the growth of crypto scams. Consumer groups have also called for Australia’s new Labor government to protect crypto investors through more stringent regulation.

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Australia Regulation Scams

Aussie Consumers have Already Lost $200 Million to Investment Scams in 2022

The Australian Competition and Consumer Commission’s Scamwatch site has found that Aussies lost over A$205 million to investment scams between January and May of 2022.

This represents a 314 percent increase compared to the first four months of 2021, with more than A$80 million of this year’s losses (between January 1 and May 1) from crypto scams alone.

https://www.australianmining.com.au/news/accc-tackle-large-companies-pressuring-small-contractors/
The ACCC warns of a significant increase in investment scams.

ACCC On Edge Over Losses

With more than half of the year still ahead, these daunting figures have the ACCC on edge. Its deputy chair, Delia Rickard, has noted that consumers who lack familiarity with crypto and its intricacies are most likely to accidentally engage with scam tactics.

https://itwire.com/it-industry-news/telecoms-and-nbn/accc-has-a-$300,000-court-win-against-superfone.html

We are seeing more money lost to investment scams and so are urging all Australians not to trust investment opportunities that seem too good to be true.

Delia Rickard, deputy chair, ACCC

While the number of investment scams has increased compared to the same period last year, the true amount of funds lost to investment scams could be far higher, the ACCC believes. This is because only about 13 percent of people report their losses. In 2022, the number of reports is down despite losses increasing, suggesting investors are sustaining higher individual losses on average and are reticent to disclose them.

The ACCC also believes that crypto scams are likely to have increased due to a heightened awareness of crypto introducing many naive investors to the game.

Louder Calls for Regulation

In August 2021, the ACCC began issuing warnings regarding scammers swindling Aussies via fake crypto platforms. These “creative” ploys had seen unscrupulous operators impersonating crypto exchanges and targeting victims via chat channels such as Telegram.

The new federal Labor government is being urged by consumer advocates to protect Aussies from these crypto scams. CHOICE, Australia’s largest consumer advocacy group, is calling for increased regulation of the industry – with the addition of a “single definition for crypto assets”.

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Australia Crime Cryptocurrency Law Facebook Scams Social media

Australian Consumer Watchdog Sues Meta Over Crypto Scam Ads

The Australian Competition and Consumer Commission (ACCC) has announced it will be suing Meta over the company’s failure to block crypto scam advertisements involving Australian public figures that are in breach of Australian consumer law.

person holding silver iphone 6 https://unsplash.com/photos/iurEAyYyU_c
ACCC takes action against Meta, the owner of Facebook and Instagram. Source: ABC

False Endorsements of Crypto Investments

Dick Smith, David Koch and Andrew Forrest are some of the prominent Australian personalities unwittingly involved in a series of crypto scam ads circulating on Facebook. The ads claim that the featured celebrities have hugely benefited from cryptocurrency investments, then direct users to scam websites on the strength of these false endorsements.

The consumer watchdog believes that Meta is not doing enough to prevent the circulation of these ads on both Facebook and Instagram. The personalities in the ads have not given any permission for their names and faces to be used in the money-making schemes, and users who have engaged with this material have reportedly been the victims of intense pressure tactics, including phone calls asking for funds.

Rod Sims, the ACCC’s chair, outlined his disappointment with Meta’s lack of action and solutions in a March 18 media release:

https://www.accc.gov.au/media/image-library

Meta should have been doing more to detect and then remove false or misleading ads on Facebook, to prevent consumers from falling victim to ruthless scammers.

ACCC chair Rod Sims

Sims stated that in one circumstance an individual consumer lost A$650,000 to one of these scams. The ACCC will be seeking injunctions, penalties, declarations, costs, and other orders from Meta to ensure the practice does not continue.

Australia Cracks Down on Crypto Scams

News of the ACCC’s legal action against Meta follows an investigation into how Australians lost over A$70 million in 2021 through investment scams alone.

Scamwatch reported in July last year that investment scams involving cryptocurrency and other digital assets were on the rise. Other prominent fraud-related practices have included romance scams, personal identity theft and illegal crypto mining.